DoD awards $175.7M contract to Lockheed Martin for aircraft manufacturing, with no competition

Contract Overview

Contract Amount: $175,693,449 ($175.7M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2016-01-01

End Date: 2020-04-30

Contract Duration: 1,581 days

Daily Burn Rate: $111.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::OT::IGF

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32819

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $175.7 million to LOCKHEED MARTIN CORPORATION for work described as: IGF::OT::IGF Key points: 1. Contract awarded on a firm-fixed-price basis, indicating predictable costs for the government. 2. Sole-source award raises questions about potential overpayment and lack of market-driven pricing. 3. Long contract duration of 1581 days suggests a significant, ongoing need for these services. 4. The contract falls under NAICS code 336411, indicating a focus on aircraft manufacturing. 5. Awarded by the Department of the Army, highlighting a specific military aviation requirement. 6. The absence of competition limits opportunities for other capable manufacturers to bid.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without competitive bids. The firm-fixed-price structure provides cost certainty, but the lack of competition means the government may not have secured the best possible price. Without comparable sole-source awards or market data for similar aircraft manufacturing services, it's difficult to definitively assess if the $175.7 million represents fair market value. Further analysis would require access to the contractor's cost breakdown and justification for the pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Lockheed Martin Corporation, was solicited. The justification for this approach is not provided in the data. Sole-source awards typically occur when a unique capability is required, or when only one responsible source exists. The lack of competition means the government did not benefit from price discovery through a bidding process, potentially leading to higher costs.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without multiple bids, there's less incentive for the contractor to offer the lowest possible price.

Public Impact

The primary beneficiary is the Department of the Army, which receives critical aircraft manufacturing services. This contract supports the production or sustainment of specific aircraft platforms vital for national defense. The geographic impact is concentrated in Florida, where the contract is being performed. Workforce implications include employment opportunities within Lockheed Martin and its supply chain in Florida.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in the sole-source justification hinders independent value assessment.
Long contract duration without competition could lead to complacency or reduced efficiency over time.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Award to a major defense contractor like Lockheed Martin suggests access to specialized expertise and established production capabilities.
Contract supports critical national defense needs for the U.S. Army.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically aircraft manufacturing (NAICS 336411). This is a highly specialized and capital-intensive industry dominated by a few large prime contractors. The market is characterized by significant R&D investments, long product development cycles, and substantial government procurement. Comparable spending benchmarks would involve analyzing other large-scale aircraft production or sustainment contracts awarded by the DoD, often in the hundreds of millions or billions of dollars.

Small Business Impact

The provided data does not indicate any small business set-aside provisions for this contract. As a sole-source award to a large prime contractor, it is unlikely to have direct subcontracting opportunities specifically targeted at small businesses through a set-aside mechanism. However, Lockheed Martin, like other large defense contractors, may have existing small business subcontracting plans that would apply to this contract, but this information is not detailed here.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. The Defense Contract Management Agency (DCMA) likely plays a role in monitoring performance and compliance. Inspector General (IG) jurisdiction would apply in cases of fraud, waste, or abuse. Transparency is limited by the sole-source nature of the award; however, contract award data is publicly available through federal procurement databases.

Related Government Programs

Department of Defense Aircraft Procurement
Lockheed Martin Defense Contracts
Army Aviation Programs
Firm Fixed Price Contracts
Sole Source Defense Contracts

Risk Flags

Sole-source award lacks competitive pricing.
Potential for cost overruns despite firm-fixed-price structure.
Lack of detailed performance metrics in summary data.
Long contract duration increases exposure to market changes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $175.7 million to LOCKHEED MARTIN CORPORATION. IGF::OT::IGF

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 Army).

What is the total obligated amount?

The obligated amount is $175.7 million.

What is the period of performance?

Start: 2016-01-01. End: 2020-04-30.

What is the specific type of aircraft or aircraft component being manufactured under this contract?

The provided data identifies the NAICS code as 336411 (Aircraft Manufacturing) and the contracting agency as the Department of the Army. However, it does not specify the exact type of aircraft or components. This level of detail is typically found in the contract's statement of work or technical exhibits, which are not included in the summary data. Understanding the specific platform is crucial for assessing the strategic importance and technical complexity of the contract.

What was the justification for awarding this contract on a sole-source basis?

The data indicates the contract was awarded as 'NOT COMPETED,' signifying a sole-source or limited competition scenario. The specific justification for this sole-source award is not provided in the data. Common justifications include the existence of only one responsible source, urgent and compelling needs, or specific technological requirements that only one contractor can meet. Without this justification, it is difficult to independently verify the necessity of bypassing the competitive bidding process and to assess potential risks to price and value.

How does the $175.7 million contract value compare to historical spending on similar aircraft manufacturing services by the Department of the Army?

Comparing this $175.7 million contract value to historical spending requires access to detailed historical procurement data for similar aircraft manufacturing services by the Department of the Army. The provided data does not include this historical context. A comprehensive analysis would involve identifying comparable contracts (e.g., for the same aircraft type, similar complexity, or sustainment services) awarded over previous fiscal years and analyzing their values, durations, and competition levels to establish a benchmark for assessing the current contract's value and cost-effectiveness.

What are the key performance metrics and deliverables outlined in the contract?

The provided data specifies the contract type as 'FIRM FIXED PRICE' and the duration (1581 days), but it does not detail the specific performance metrics or deliverables. These are typically found in the contract's Statement of Work (SOW) or Performance Work Statement (PWS). Key metrics would likely relate to production schedules, quality control standards, delivery timelines, and potentially technical performance specifications for the aircraft or components. Without these details, assessing the contractor's performance obligations and the government's ability to measure success is limited.

What is Lockheed Martin Corporation's track record with the Department of the Army for similar aircraft manufacturing contracts?

Lockheed Martin Corporation is a major defense contractor with a long history of supplying aircraft and related services to the Department of the Army. While this specific data does not detail their past performance on similar contracts, the company is known for producing various military aircraft platforms. Assessing their track record would involve reviewing past contract performance evaluations (e.g., CPARS reports), delivery history, and any documented issues or successes on previous Army aviation programs. Their established presence suggests significant experience, but also necessitates scrutiny regarding cost control and delivery.

Are there any identified risks associated with this specific contract, such as technical challenges, schedule delays, or cost overruns?

The provided data does not explicitly list risks associated with this contract. However, inherent risks in large sole-source defense contracts include potential cost overruns if the fixed price was not adequately negotiated, schedule delays due to production complexities or supply chain issues, and technical challenges in manufacturing advanced aircraft. The sole-source nature itself presents a risk of not achieving the best possible value. A thorough risk assessment would require reviewing the contract's SOW, technical specifications, and any associated program management documentation.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W52P1J15R0202

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: $175,693,449

Exercised Options: $175,693,449

Current Obligation: $175,693,449

Subaward Activity

Number of Subawards: 33

Total Subaward Amount: $2,758,293

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline