DoD's $26.4M Lockheed Martin contract for F-16 systems engineering services awarded without competition

Contract Overview

Contract Amount: $26,407,870 ($26.4M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2002-08-12

End Date: 2003-08-12

Contract Duration: 365 days

Daily Burn Rate: $72.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Defense

Official Description: 200211!000117!5700!GU82 !ASC/YPK !F4262001D0058 !A!N! !Y!SC08 !20020812!20030812!008016958!008016958!834951691!N!LOCKHEED MARTIN CORPORATION !LOCKHEED BLVD !FORT WORTH !TX!76108!27000!439!48!FORT WORTH !TARRANT !TEXAS !+000004382500!Y!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A7 !ELECTRONICS AND COMMUNICATION !3AFH!F-16 FALCON !541330!E! !5!B!S! ! ! !99990909!B! ! !N!Z!D!N!Y!1!001!N!1A!Z!Y!Z! ! !N!C!N! ! ! !Z!Z!A!A!* !A!B!N! ! ! ! ! ! !0001!

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76108

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $26.4 million to LOCKHEED MARTIN CORPORATION for work described as: 200211!000117!5700!GU82 !ASC/YPK !F4262001D0058 !A!N! !Y!SC08 !20020812!20030812!008016958!008016958!834951691!N!LOCKHEED MARTIN CORPORATION !LOCKHEED BLVD !FORT WORTH !TX!76108!27000!439!48!FORT WORTH !TARRA… Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential for overpayment. 2. The contract value of $26.4 million for a one-year duration suggests a high per-diem rate for specialized engineering services. 3. Lack of competition limits opportunities for other contractors and may not reflect the best value for taxpayers. 4. The services provided are critical for the sustainment and upgrade of the F-16 fighter jet fleet. 5. The contract falls under engineering services, a broad category with varying market rates and competitive landscapes. 6. Oversight mechanisms for sole-source contracts are crucial to ensure fair pricing and effective service delivery.

Value Assessment

Rating: questionable

The contract value of $26.4 million for a one-year duration, with a reported base value of $27 million, appears high for engineering services, especially considering it was awarded without competition. Benchmarking against similar sole-source contracts for specialized aerospace engineering is difficult, but the absence of competitive bids suggests a potential lack of price pressure. Without comparative data or a more detailed breakdown of labor categories and hours, it's challenging to definitively assess value for money, but the lack of competition inherently introduces risk.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. The Department of Defense likely justified this approach by citing specific circumstances, such as the unique capabilities of Lockheed Martin in supporting the F-16 program or the need for urgent services. The lack of competition means there were no other bidders, and therefore no direct price comparison from multiple sources. This limits the government's ability to leverage market forces to achieve the lowest possible price.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government may not benefit from competitive pricing. It also limits opportunities for other businesses to compete for and win federal contracts.

Public Impact

The primary beneficiaries are the Department of Defense and the U.S. Air Force, ensuring the continued operational readiness and modernization of the F-16 fighter jet fleet. Services delivered include critical systems engineering support, likely encompassing design, integration, testing, and sustainment of complex avionics and software systems for the F-16. The geographic impact is centered around the F-16 operational bases and Lockheed Martin's facilities, primarily in Texas. Workforce implications include the employment of highly skilled engineers and technical personnel at Lockheed Martin, contributing to the aerospace and defense sector's specialized labor market.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and taxpayer value.
High contract value for a one-year duration warrants scrutiny of cost-effectiveness.
Lack of transparency in sole-source justification could mask inefficiencies.
Potential for vendor lock-in due to specialized knowledge of F-16 systems.

Positive Signals

Contract supports critical national defense asset (F-16 fighter jet).
Lockheed Martin is a proven prime contractor with extensive experience in the F-16 program.
Services are essential for maintaining aircraft readiness and technological relevance.
Contract duration provides stability for critical engineering support.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting aerospace and defense systems. The market for specialized engineering services for major defense platforms like the F-16 is often dominated by the original equipment manufacturers or highly specialized subcontractors due to proprietary knowledge and long-standing relationships. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of platform-specific engineering, but large-scale defense contracts for sustainment and upgrades can run into hundreds of millions or billions of dollars annually.

Small Business Impact

There is no indication of a small business set-aside for this contract. As a sole-source award to a large prime contractor, it is unlikely to involve significant subcontracting opportunities specifically designated for small businesses through set-asides. However, Lockheed Martin may engage small businesses as subcontractors for specific components or services, but this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices. Given it's a sole-source award, enhanced scrutiny from the Defense Contract Management Agency (DCMA) and potentially the Department of Defense Inspector General (DoDIG) would be expected to ensure compliance with contract terms, fair pricing, and effective performance. Transparency is limited due to the sole-source nature, but contract modifications and performance reports would be subject to internal review.

Related Government Programs

F-16 Fighting Falcon Sustainment Programs
Aerospace Engineering Services
Defense Contractor Support Services
Avionics Systems Engineering
Air Force Weapon System Modernization

Risk Flags

Sole-source award
High contract value
Potential for cost overruns
Aging platform sustainment
Cybersecurity risks

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.4 million to LOCKHEED MARTIN CORPORATION. 200211!000117!5700!GU82 !ASC/YPK !F4262001D0058 !A!N! !Y!SC08 !20020812!20030812!008016958!008016958!834951691!N!LOCKHEED MARTIN CORPORATION !LOCKHEED BLVD !FORT WORTH !TX!76108!27000!439!48!FORT WORTH !TARRANT !TEXAS !+000004382500!Y!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A7 !ELECTRONICS AND COMMUNICATION !3AFH!F-16 FALCON !541330!E! !5!B!S! ! ! !99990909!B

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $26.4 million.

What is the period of performance?

Start: 2002-08-12. End: 2003-08-12.

What is the specific justification for awarding this contract on a sole-source basis to Lockheed Martin?

The specific justification for a sole-source award typically stems from circumstances where only one responsible source is capable of providing the required service or supply. For complex defense systems like the F-16, this often relates to proprietary data, unique technical expertise, existing infrastructure, or the need for urgent support that only the original manufacturer or a highly specialized incumbent can provide. Without the official justification document (e.g., a Justification and Approval - J&A), it's presumed that the Department of the Air Force determined that Lockheed Martin possessed the unique capabilities, knowledge, and access to proprietary information essential for the F-16's systems engineering that could not be replicated by other contractors within the required timeframe or to the necessary standard.

How does the $26.4 million contract value compare to historical spending on F-16 systems engineering by the Air Force?

Historical spending on F-16 systems engineering by the Air Force can vary significantly year over year, influenced by upgrade cycles, sustainment needs, and fleet size. A $26.4 million contract for a single year represents a substantial investment, but placing it in historical context requires access to detailed spending data for the F-16 program over multiple fiscal years. For instance, if previous years saw similar annual expenditures for comparable engineering services, this contract might be considered consistent. However, if historical spending was considerably lower, it could indicate an escalation in costs or an expansion of the scope of work. Without access to that granular historical data, it's difficult to definitively benchmark this specific contract value against past expenditures.

What are the key performance indicators (KPIs) used to measure the success of this systems engineering contract?

Key Performance Indicators (KPIs) for a systems engineering contract like this typically focus on technical performance, schedule adherence, and cost control. Specific KPIs might include: 1. Technical Performance: Meeting specified technical requirements, successful integration of new systems or software, reduction in system failures or anomalies. 2. Schedule Performance: Completing engineering tasks and milestones on time, timely delivery of reports and documentation. 3. Cost Performance: Staying within the allocated budget, accurate forecasting of future costs. 4. Responsiveness: Timeliness and effectiveness in addressing engineering issues or requests from the Air Force. While not explicitly detailed in the contract data, these are standard metrics for evaluating the performance of such critical support services.

What is Lockheed Martin's track record with the F-16 program and similar defense contracts?

Lockheed Martin has an extensive and long-standing track record with the F-16 Fighting Falcon program, having been the prime contractor responsible for its development, production, and sustainment for decades. Their experience encompasses virtually all aspects of the aircraft's lifecycle, including complex systems engineering, avionics integration, software development, and ongoing support. They have managed numerous large-scale contracts for the F-16 with various international customers and the U.S. Air Force. This deep institutional knowledge and established relationship make them a logical, albeit sole-source, choice for critical engineering services. Their performance history on the F-16 is generally viewed as strong, given the platform's continued operational success and modernization efforts.

Are there any specific risks associated with this contract, such as technical obsolescence or cybersecurity vulnerabilities?

Yes, there are inherent risks associated with this contract. Technical obsolescence is a significant concern, as the F-16 is an older platform, and maintaining its systems requires managing the lifecycle of aging components and software. This necessitates continuous engineering effort to find replacements, upgrades, or workarounds. Cybersecurity vulnerabilities are also a major risk; as aircraft become more networked and reliant on software, they become more susceptible to cyber threats. Ensuring the security of the F-16's complex systems requires robust cybersecurity engineering practices throughout the design, integration, and sustainment phases. The sole-source nature of the contract could potentially exacerbate these risks if not managed with rigorous oversight, as there's less external pressure to innovate or adopt the most cutting-edge security protocols.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 1 LOCKHEED BLVD, FORT WORTH, TX, 76108

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Parent Contract

Parent Award PIID: F4262001D0058

IDV Type: IDC

Timeline