Lockheed Martin awarded $18.7M for aircraft fixed-wing services, raising value-for-money questions

Contract Overview

Contract Amount: $18,681,593 ($18.7M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2004-02-06

End Date: 2006-04-28

Contract Duration: 812 days

Daily Burn Rate: $23.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Defense

Official Description: 200405!000059!5700!GU82 !ASC/YPK !F4262001D0058 !A!N! !N!SC39 ! !20040206!20041231!008016958!008016958!834951691!N!LOCKHEED MARTIN CORPORATION !LOCKHEED BLVD !FORT WORTH !TX!76101!27000!439!48!FORT WORTH !TARRANT !TEXAS !+000002107025!N!N!000000000000!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !000 !* !336411!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!000!A!C!N! ! ! !Y! ! !0001! !

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76108

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $18.7 million to LOCKHEED MARTIN CORPORATION for work described as: 200405!000059!5700!GU82 !ASC/YPK !F4262001D0058 !A!N! !N!SC39 ! !20040206!20041231!008016958!008016958!834951691!N!LOCKHEED MARTIN CORPORATION !LOCKHEED BLVD !FORT WORTH !TX!76101!27000!439!48!FORT WORTH !TARR… Key points: 1. Contract awarded on a sole-source basis, limiting price competition and potentially increasing costs. 2. Significant contract value suggests a critical need for specialized aircraft services. 3. Performance period spans over two years, indicating a long-term requirement. 4. The 'Time and Materials' pricing structure can lead to cost overruns if not closely managed. 5. Geographic concentration in Texas may indicate a specific operational base or facility focus. 6. Lack of competition raises concerns about achieving optimal value for taxpayer funds.

Value Assessment

Rating: questionable

The contract's value of $18.7 million for aircraft fixed-wing services appears substantial. However, without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar contracts. The 'Time and Materials' pricing model, while flexible, carries inherent risks of cost escalation. Further analysis would be needed to determine if this represents a fair and reasonable price given the lack of competition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Lockheed Martin Corporation, was solicited. This approach bypasses the standard competitive procurement process, which typically involves multiple bidders vying for the contract. The absence of competition means there was no direct price comparison or incentive for vendors to offer their best pricing.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as there is no market pressure to drive down prices. This limits the government's ability to secure the most cost-effective solution.

Public Impact

The primary beneficiary is Lockheed Martin Corporation, a major defense contractor. Services likely involve maintenance, repair, or modification of fixed-wing aircraft. The geographic impact is concentrated in Texas, potentially supporting a specific military installation or operational hub. Workforce implications include employment for skilled technicians and engineers at Lockheed Martin facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and value for money.
Time and Materials contract type poses a risk of cost overruns.
Lack of transparency in the procurement process due to sole-source nature.

Positive Signals

Award to a known, established contractor with likely relevant expertise.
Contract duration suggests a sustained and important requirement.
Specific service category (Aircraft Fixed Wing) indicates a focused and critical need.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft maintenance and support. The market for such services is dominated by large, established defense contractors like Lockheed Martin. Spending in this area is often driven by military readiness requirements and the lifecycle management of complex aircraft systems. Benchmarking would typically involve comparing pricing structures and overhead rates of similar sole-source or competitively awarded contracts for aircraft support.

Small Business Impact

This contract does not appear to have a small business set-aside. As a sole-source award to a large prime contractor, there is no direct indication of subcontracting opportunities for small businesses within this specific award document. The overall impact on the small business ecosystem would depend on Lockheed Martin's subcontracting practices for this contract, which are not detailed here.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management systems. Accountability measures would be tied to the performance requirements outlined in the contract and the 'Time and Materials' billing. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Maintenance and Repair Services
Defense Logistics Agency Contracts
Air Force Sustainment Contracts
Fixed-Wing Aircraft Procurement
Defense Contractor Services

Risk Flags

Sole-source award
Time and Materials pricing
Lack of competitive bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.7 million to LOCKHEED MARTIN CORPORATION. 200405!000059!5700!GU82 !ASC/YPK !F4262001D0058 !A!N! !N!SC39 ! !20040206!20041231!008016958!008016958!834951691!N!LOCKHEED MARTIN CORPORATION !LOCKHEED BLVD !FORT WORTH !TX!76101!27000!439!48!FORT WORTH !TARRANT !TEXAS !+000002107025!N!N!000000000000!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !000 !* !336411!E! !5!B!S! ! ! !999

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 $18.7 million.

What is the period of performance?

Start: 2004-02-06. End: 2006-04-28.

What is Lockheed Martin Corporation's track record with similar sole-source contracts for aircraft services?

Lockheed Martin Corporation, as a major defense contractor, has a long history of securing sole-source contracts, particularly for specialized systems and services where they possess unique capabilities or are the sole manufacturer. Analyzing their past performance on similar sole-source awards would involve reviewing contract histories for on-time delivery, adherence to budget (where applicable for fixed-price components), and quality of service. Publicly available data may not always detail the specifics of sole-source justifications or performance metrics, making a comprehensive assessment challenging without deeper access to government contract databases or Inspector General reports. However, their status as a prime contractor suggests a generally established capability to perform such work, though the absence of competition remains a key factor in evaluating value.

How does the 'Time and Materials' pricing structure compare to fixed-price contracts for aircraft maintenance?

Time and Materials (T&M) contracts are best suited for situations where the scope of work is uncertain or likely to change, allowing for flexibility. In aircraft maintenance, this could apply to unexpected repairs or evolving service needs. However, T&M contracts shift the cost risk to the government, as the final price is determined by the actual labor hours and material costs incurred. This contrasts with fixed-price contracts, where the contractor assumes the risk of cost overruns, theoretically leading to better price certainty for the government. For routine or well-defined maintenance tasks, fixed-price contracts often provide better value and predictability. The T&M structure here necessitates robust government oversight to manage labor hours and material markups effectively to prevent excessive spending.

What are the potential risks associated with a sole-source award of this magnitude?

The primary risk of a sole-source award of this magnitude ($18.7 million) is the lack of competitive pressure, which can lead to inflated pricing and reduced value for taxpayer money. Without competing bids, the government cannot be assured it is receiving the most cost-effective solution available in the market. There's also a risk of complacency from the awarded contractor, as they face no immediate threat of losing future business to competitors for this specific requirement. Furthermore, sole-source awards can sometimes mask inefficiencies or a lack of innovation if the contractor is not incentivized to improve processes or explore more economical approaches. Ensuring fair pricing and diligent performance monitoring becomes even more critical in such scenarios.

What specific aircraft fixed-wing services are typically covered under such contracts?

Contracts for 'Aircraft Fixed Wing' services, especially those awarded to major manufacturers like Lockheed Martin, can encompass a wide range of activities. This typically includes scheduled and unscheduled maintenance, depot-level repairs, component overhauls, modifications, upgrades, and technical support. It may also involve the supply of spare parts and associated logistics. The specific nature of the services would be detailed in the contract's Statement of Work (SOW). Given the 'Time and Materials' structure, it suggests that the exact scope might not have been fully defined at the time of award, potentially covering emergent needs or evolving support requirements for a fleet of fixed-wing aircraft.

What historical spending patterns exist for aircraft fixed-wing services within the Department of Defense?

The Department of Defense (DoD) consistently allocates significant portions of its budget to aircraft sustainment, maintenance, and repair, including fixed-wing services. Historical spending patterns reveal a substantial and ongoing requirement for these services due to the large and aging fleets of military aircraft. Spending fluctuates based on operational tempo, modernization programs, and the lifecycle of different aircraft platforms. Major defense contractors like Lockheed Martin are perennial recipients of such contracts. Analyzing historical data would show a trend of multi-billion dollar annual expenditures across the DoD for aircraft support, with a notable portion directed towards fixed-wing platforms, often through complex, long-term sustainment agreements, some of which may be sole-sourced due to specialized requirements.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

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: YES

Parent Contract

Parent Award PIID: F4262001D0058

IDV Type: IDC

Timeline