Lockheed Martin awarded $23.7M for Naval Aviation parts, with limited competition

Contract Overview

Contract Amount: $23,726,165 ($23.7M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2016-06-17

End Date: 2018-12-31

Contract Duration: 927 days

Daily Burn Rate: $25.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: NAVAL AVIATION

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32819

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $23.7 million to LOCKHEED MARTIN CORPORATION for work described as: NAVAL AVIATION Key points: 1. Contract value represents a significant investment in naval aviation sustainment. 2. Sole-source nature raises questions about potential price overruns and limited market leverage. 3. The contract duration of over 900 days suggests a long-term need for these parts. 4. Focus on aircraft parts indicates a critical role in maintaining fleet readiness. 5. The firm-fixed-price structure aims to control costs, but limited competition may undermine this. 6. Geographic concentration in Florida for delivery warrants attention to supply chain resilience.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to the lack of publicly available comparable sole-source awards for specific naval aviation parts. However, the $23.7 million award over approximately two years suggests a substantial per-unit cost, which warrants scrutiny. Without competitive bidding, it's difficult to ascertain if the pricing reflects fair market value or if it includes a premium due to the limited procurement approach. Further analysis would require access to detailed cost breakdowns and historical pricing data for similar components.

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 is typically justified when only one responsible source is available or when urgent and compelling reasons exist. The lack of competition means that potential alternative suppliers were not considered, which can limit price discovery and potentially lead to higher costs for the government. The government did not leverage the benefits of a competitive bidding process to secure the best possible pricing and terms.

Taxpayer Impact: The sole-source nature of this award means taxpayers may not have received the most cost-effective solution. Without competition, there is a reduced incentive for the contractor to offer the lowest possible price, potentially leading to higher overall expenditure for naval aviation parts.

Public Impact

Naval aviation operations benefit from the supply of critical aircraft parts, ensuring fleet readiness. The contract supports the maintenance and operational capabilities of U.S. Navy aircraft. Delivery is concentrated in Florida, potentially impacting regional aerospace and defense support industries. The contract sustains jobs within Lockheed Martin's supply chain and manufacturing operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Lack of transparency in pricing due to no competitive bidding.
Potential for cost creep over the contract duration without market checks.

Positive Signals

Firm-fixed-price contract type provides cost certainty for the government.
Award supports critical naval aviation sustainment needs.
Long-term award indicates a stable, ongoing requirement.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex supply chains, and significant government procurement. Naval aviation parts fall under the broader category of aircraft manufacturing and support services. This contract with Lockheed Martin, a major defense contractor, aligns with typical government spending patterns in this sector, where large, established firms often secure substantial awards for specialized components and systems. The market for such specialized parts is often limited due to proprietary technology, stringent quality requirements, and long qualification processes.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss' flag is also false, suggesting no specific small business subcontracting goals were explicitly mandated or reported in this data snippet. The award to a large prime contractor like Lockheed Martin means that opportunities for small businesses would primarily arise through subcontracting, the extent of which is not detailed here. Without specific set-aside provisions or clear subcontracting plans, the direct impact on the small business ecosystem for this particular award is likely minimal.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contract management agencies, such as the Defense Contract Management Agency (DCMA), which is listed as the 'sa'. They are responsible for ensuring contractor performance, compliance with contract terms, and quality assurance. Transparency is limited by the sole-source nature of the award; however, contract modifications, performance reports, and payment data are usually subject to internal government review and potentially audits by the Government Accountability Office (GAO) or the Inspector General. Specific Inspector General jurisdiction would depend on the nature of any potential issues arising.

Related Government Programs

Naval Air Systems Command (NAVAIR) Procurement
Defense Logistics Agency (DLA) Aviation
Aircraft Parts and Components
Aerospace Manufacturing and Repair

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for price inflation
Supply chain dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.7 million to LOCKHEED MARTIN CORPORATION. NAVAL AVIATION

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 Contract Management Agency).

What is the total obligated amount?

The obligated amount is $23.7 million.

What is the period of performance?

Start: 2016-06-17. End: 2018-12-31.

What is the historical spending trend for this specific type of Naval Aviation part from Lockheed Martin?

Analyzing historical spending trends for this specific type of Naval Aviation part from Lockheed Martin requires access to detailed procurement databases beyond the provided snippet. The data indicates a single award of $23.7 million with a start date of June 17, 2016, and an end date of December 31, 2018. To understand historical trends, one would need to query contract databases for previous awards to Lockheed Martin (or its predecessors/subsidiaries) for similar parts (NAICS code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing') under the Department of Defense, specifically for naval aviation applications. This would involve looking for patterns in award amounts, contract types, and durations over several fiscal years to identify any significant increases, decreases, or shifts in procurement strategy. Without this broader historical context, it's difficult to assess if this $23.7 million award is an anomaly or part of a consistent spending pattern.

How does the per-unit cost of these parts compare to industry benchmarks or similar government contracts?

Determining the per-unit cost and comparing it to industry benchmarks or similar government contracts is challenging with the provided data. The snippet does not specify the quantity of parts procured under the $23.7 million award, making a direct per-unit cost calculation impossible. Furthermore, the 'sole-source' nature of the award means there was no competitive bidding process to establish a market-driven price. To perform such a comparison, one would need the total quantity of items delivered, the specific part numbers or descriptions, and access to databases that track unit prices for comparable items procured competitively by the government or reported in industry cost studies. Without this granular information, any assessment of value for money based on unit cost remains speculative.

What are the specific risks associated with a sole-source award for critical naval aviation components?

Sole-source awards for critical naval aviation components carry several inherent risks. Firstly, the lack of competition can lead to inflated prices, as the government does not benefit from the cost-saving pressures that arise from multiple bidders vying for the contract. This can result in taxpayers paying more than necessary. Secondly, there's a reduced incentive for the sole contractor to innovate or improve efficiency, as they face no direct market threat. Thirdly, the government becomes heavily reliant on a single supplier, creating potential vulnerabilities in the supply chain. Disruptions at the contractor's facility, such as labor strikes, natural disasters, or production issues, could severely impact naval readiness. Finally, without competitive benchmarking, it's harder to ensure the quality and performance meet the highest standards over the long term.

What is Lockheed Martin's track record with the Department of Defense for similar aircraft parts contracts?

Lockheed Martin Corporation is a major defense contractor with an extensive history of supplying aircraft parts and systems to the Department of Defense (DoD). Their track record typically involves large, complex contracts across various military branches, including the Navy. For similar aircraft parts contracts, Lockheed Martin generally has a strong performance record, given their established manufacturing capabilities, technological expertise, and long-standing relationships with the DoD. However, like any large contractor, they may have faced past issues related to cost overruns, schedule delays, or quality control on specific programs. A comprehensive assessment would require reviewing specific contract performance data, past performance evaluations, and any reported disputes or corrective actions related to their numerous DoD contracts within the aerospace manufacturing and support sector.

What oversight mechanisms are in place to ensure the quality and timely delivery of these parts?

Oversight for this contract is primarily managed by the Department of Defense's contract administration components, such as the Defense Contract Management Agency (DCMA), which is listed as the 'sa'. DCMA personnel are responsible for monitoring contractor performance, conducting inspections, verifying quality control processes, and ensuring compliance with contract terms and specifications. The firm-fixed-price contract type itself provides a framework for cost control. Additionally, the Naval Aviation enterprise likely has its own internal quality assurance programs and technical representatives overseeing the performance and reliability of critical components. Any significant deviations from quality standards or delivery schedules could trigger formal corrective actions, contract disputes, or potential penalties, subject to the contract's terms and conditions.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: SPRPA116QX202

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

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: $23,726,165

Exercised Options: $23,726,165

Current Obligation: $23,726,165

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: SPE4A115G0005

IDV Type: BOA

Timeline