Lockheed Martin awarded $27.6M for turret assemblies, raising questions about competition and value

Contract Overview

Contract Amount: $27,634,488 ($27.6M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2019-09-26

End Date: 2022-10-31

Contract Duration: 1,131 days

Daily Burn Rate: $24.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: TURRET ASSEMBLY,AIR

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32819

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $27.6 million to LOCKHEED MARTIN CORPORATION for work described as: TURRET ASSEMBLY,AIR Key points: 1. The contract was awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The duration of the contract (over 3 years) suggests a long-term need for these critical components. 3. The fixed-price nature of the contract shifts some risk to the contractor, but the lack of competition is a concern. 4. The specific part number (336413) indicates a specialized component within aircraft manufacturing. 5. The award to a single large contractor may limit opportunities for smaller, innovative suppliers. 6. The contract's value is significant, warranting close scrutiny of performance and pricing.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source contract is challenging due to the lack of competitive bids. The $27.6 million award for turret assemblies suggests a high unit cost, especially given the contract's duration. Without comparable contract data or market research, it's difficult to definitively assess if the government received a fair price. The absence of competition inherently raises concerns about whether the pricing reflects true market value or a premium due to the sole-source nature.

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. The justification for this approach is not provided in the data, but it typically implies that only one source possesses the necessary capabilities, technology, or proprietary rights. This lack of competition means that the government did not benefit from a bidding process that could have driven down prices and fostered innovation among multiple suppliers.

Taxpayer Impact: Taxpayers may have paid a premium for this contract due to the absence of competitive pressure. The government's ability to negotiate favorable terms is diminished when only one option is available.

Public Impact

The primary beneficiaries are likely military aviation programs requiring specialized turret assemblies. This contract ensures the continued availability of critical aircraft parts for defense operations. The contract's execution in Florida suggests potential impacts on the regional aerospace workforce and supply chain. Maintenance and operational readiness of specific aircraft platforms are supported by this procurement.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Lack of transparency in the sole-source justification hinders full value assessment.
Potential for contractor lock-in due to specialized nature of the component.
Long contract duration without clear performance metrics raises concerns about ongoing value.

Positive Signals

Award to a major defense contractor like Lockheed Martin suggests access to established expertise and quality.
Fixed-price contract structure provides some cost certainty for the government.
Contract ensures supply of critical components for national defense needs.
Geographic location in Florida may support regional economic activity and employment.

Sector Analysis

The aerospace and defense sector is characterized by high technological complexity, significant R&D investment, and long product lifecycles. Contracts for specialized components like turret assemblies are crucial for maintaining the operational readiness of military aircraft. The market is often dominated by a few large prime contractors, with specialized parts sourced through complex supply chains. Spending in this area is directly tied to defense budgets and strategic priorities, with limited direct market comparables outside of government procurement.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there an indication of significant subcontracting opportunities for small businesses based on the provided data. The award to a large prime contractor like Lockheed Martin suggests that the primary focus is on established capabilities rather than fostering small business participation. Further investigation into subcontracting plans would be needed to fully assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA) and potentially the Department of Defense Inspector General (IG). The fixed-price nature of the contract provides a degree of financial oversight by establishing a ceiling cost. However, the sole-source award necessitates robust performance monitoring to ensure the contractor is meeting all technical specifications and delivery schedules without the benefit of competitive pressure to drive efficiency.

Related Government Programs

Aircraft Parts Manufacturing
Defense Logistics Agency Procurement
Lockheed Martin Contracts
Sole-Source Defense Contracts
Military Aircraft Components

Risk Flags

Sole-source award
Lack of competitive justification
Potential for inflated pricing
Limited transparency on performance metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.6 million to LOCKHEED MARTIN CORPORATION. TURRET ASSEMBLY,AIR

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $27.6 million.

What is the period of performance?

Start: 2019-09-26. End: 2022-10-31.

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

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are justified when only one responsible source is available to meet the government's needs. This could be due to unique technical capabilities, proprietary technology, urgent and compelling circumstances, or the existence of a required source. Without the official justification document, it is impossible to definitively state why competition was precluded. This lack of transparency is a significant concern for assessing the fairness and value of the contract.

How does the unit cost of these turret assemblies compare to similar components or historical pricing?

Direct comparison of unit costs is not feasible with the provided data. The total award amount is $27,634,488 over a period of 1131 days (approximately 3.1 years). To determine a unit cost, the number of units procured would be necessary. Furthermore, without access to historical pricing data for the same or similar turret assemblies, or benchmark data from other competitive contracts, it is difficult to assess if the pricing is reasonable. The sole-source nature of this award further complicates value assessment, as competitive pressures that typically drive down prices are absent.

What are the key performance indicators (KPIs) and delivery schedules associated with this contract?

The provided data indicates a contract duration from September 26, 2019, to October 31, 2022, spanning 1131 days. It also specifies the contract type as Firm Fixed Price (FFP). However, specific Key Performance Indicators (KPIs) related to quality, reliability, or delivery timeliness beyond the overall end date are not detailed. For a sole-source contract of this magnitude, detailed delivery schedules for individual orders (as this is a delivery order) and stringent quality assurance metrics would be expected to ensure accountability and performance.

What is Lockheed Martin Corporation's track record with the Defense Logistics Agency (DLA) for similar components?

Lockheed Martin Corporation is a major defense contractor with extensive experience supplying various components to the Department of Defense, including the Defense Logistics Agency (DLA). While this specific data point doesn't detail their entire history with DLA, their status as a prime contractor suggests a significant existing relationship. Their track record generally involves complex systems and components for military platforms. However, a deeper dive into DLA's contract database would be needed to assess their specific performance, past issues, or successes related to turret assemblies or similar aircraft parts.

Are there any identified risks or potential issues associated with the long-term supply of these turret assemblies?

Potential risks include supply chain disruptions, obsolescence of technology over the contract's life, and the continued reliance on a single supplier (Lockheed Martin) which can lead to price increases in future procurements if competition is not re-established. Given the specialized nature of 'TURRET ASSEMBLY, AIR', ensuring long-term availability and maintainability is critical. Without competitive bidding, there's also a risk that cost efficiencies may not be fully realized. The lack of detailed performance data in the summary also makes it hard to assess current operational risks.

How does this contract fit into the broader context of DLA's spending on aircraft parts?

This $27.6 million contract for turret assemblies represents a specific, albeit significant, expenditure within the DLA's vast portfolio of aircraft parts procurement. The DLA manages a complex global supply chain to provide logistics support for the U.S. military. Contracts like this are essential for maintaining the readiness of aircraft fleets. While this single contract is substantial, it must be viewed in the context of the billions of dollars the DLA spends annually on a wide array of spare parts, maintenance, and repair services for various military platforms.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: SPRPA118RW711

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 5600 W SAND LAKE RD # MP-265, ORLANDO, FL, 32819

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $27,634,488

Exercised Options: $27,634,488

Current Obligation: $27,634,488

Subaward Activity

Number of Subawards: 30

Total Subaward Amount: $66,499,842

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: SPE4A115G0005

IDV Type: BOA

Timeline