Air Force Awards $43M Engineering Services Contract to Lockheed Martin, Not Competed
Contract Overview
Contract Amount: $42,990,137 ($43.0M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2016-10-14
End Date: 2025-10-31
Contract Duration: 3,304 days
Daily Burn Rate: $13.0K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Official Description: EPAF/USAF STUDIES AND OUT-OF-CYCLE INTEGRATION
Place of Performance
Location: FORT WORTH, TARRANT County, TEXAS, 76108
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $43.0 million to LOCKHEED MARTIN CORPORATION for work described as: EPAF/USAF STUDIES AND OUT-OF-CYCLE INTEGRATION Key points: 1. Significant contract value of $42.99 million. 2. Sole-source award to Lockheed Martin Corporation. 3. High risk due to lack of competition. 4. Engineering services sector, with potential for cost overruns.
Value Assessment
Rating: questionable
The contract type is Cost Plus Fixed Fee, which can lead to higher costs than fixed-price contracts if not managed carefully. Without competitive bidding, it's difficult to assess if the pricing is optimal.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there is no market pressure to offer the best price.
Taxpayer Impact: The lack of competition raises concerns about the efficient use of taxpayer funds, as a potentially lower price may have been achievable through a competitive process.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. Limited transparency in pricing and service delivery. Potential for scope creep and cost escalation under a Cost Plus Fixed Fee contract.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Long contract duration (3304 days)
Positive Signals
- Established contractor (Lockheed Martin)
- Specific engineering services required by the Air Force
Sector Analysis
This contract falls under Engineering Services (NAICS 541330), a sector that often involves complex technical requirements. Benchmarks for this sector vary widely based on the specific services and complexity, but competitive bidding is crucial for cost control.
Small Business Impact
This contract was awarded to Lockheed Martin Corporation and does not indicate any subcontracting opportunities for small businesses. The sole-source nature further reduces the likelihood of small business participation.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the contractor is delivering services efficiently and at a reasonable cost. Robust performance monitoring is essential.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competition
- Cost Plus Fixed Fee contract type
- Potential for cost escalation
- Limited transparency in pricing
- No clear small business participation
Tags
engineering-services, department-of-defense, tx, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $43.0 million to LOCKHEED MARTIN CORPORATION. EPAF/USAF STUDIES AND OUT-OF-CYCLE INTEGRATION
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 $43.0 million.
What is the period of performance?
Start: 2016-10-14. End: 2025-10-31.
What specific engineering services are being procured, and why was a sole-source award deemed necessary?
The contract is for EPAF/USAF studies and out-of-cycle integration. A sole-source award suggests that only Lockheed Martin Corporation was considered capable of performing these specific, potentially unique, or highly specialized engineering services. Justification for this approach typically involves factors like proprietary technology, existing system integration expertise, or urgent operational needs that preclude a lengthy competitive process.
What are the potential risks associated with a Cost Plus Fixed Fee contract awarded without competition?
The primary risks include cost overruns and a lack of incentive for the contractor to control expenses. Since the government pays costs plus a fixed fee, the contractor has less motivation to find cost savings. Without competition, there's no market benchmark to ensure the fixed fee is reasonable or that the overall cost is competitive.
How will the effectiveness and value for money of these engineering services be assessed given the lack of competition?
Effectiveness will be measured against defined performance metrics and deliverables outlined in the contract. Value for money is harder to ascertain without competition. The Air Force must implement rigorous oversight, track key performance indicators, and conduct thorough reviews of costs and outcomes to ensure taxpayer funds are used judiciously.
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
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp
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
Financial Breakdown
Contract Ceiling: $72,144,252
Exercised Options: $61,096,569
Current Obligation: $42,990,137
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: F4262001D0058
IDV Type: IDC
Timeline
Start Date: 2016-10-14
Current End Date: 2025-10-31
Potential End Date: 2025-10-31 00:00:00
Last Modified: 2025-07-29
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