Lockheed Martin awarded $41.6M for rotary wing aircraft parts, a sole-source contract with a 2194-day duration

Contract Overview

Contract Amount: $41,585,569 ($41.6M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2006-03-28

End Date: 2012-03-30

Contract Duration: 2,194 days

Daily Burn Rate: $19.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200606!002403!2100!W58RGZ!USA AVIATION AND MISSILE COMMAND!W58RGZ06C0113 !A!N! !N! ! !20060328!20080630!002232973!002232973!834951691!N!LOCKHEED MARTIN CORPORATION !1801 STATE ROUTE 17C !OWEGO !NY!13827!55882!107!36!OWEGO !TIOGA !NEW YORK !+000013313160!Y!N!000000000000!1520!AIRCRAFT ROTARY WING !A1A!AIRFRAMES AND SPARES !000 !NOT DISCERNABLE !336413!E! !3! ! ! ! ! !99990909!B! ! !N!B!D!N!J!1!001!N!1A!Z!Y!F! ! !N!C!N! ! ! !A!A!A!A!000!A!D!N! ! ! ! ! ! !0001! !

Place of Performance

Location: OWEGO, TIOGA County, NEW YORK, 13827

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $41.6 million to LOCKHEED MARTIN CORPORATION for work described as: 200606!002403!2100!W58RGZ!USA AVIATION AND MISSILE COMMAND!W58RGZ06C0113 !A!N! !N! ! !20060328!20080630!002232973!002232973!834951691!N!LOCKHEED MARTIN CORPORATION !1801 STATE ROUTE 17C !OWEGO !NY!13827!55882!107!36!OWEGO !TIOG… Key points: 1. Contract awarded to a single supplier, raising questions about price competitiveness. 2. Long contract duration suggests a sustained need for these specific aircraft components. 3. The contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code. 4. This award represents a significant portion of the contractor's potential revenue for this period. 5. The absence of competition may limit opportunities for other suppliers to enter the market. 6. The contract's value is substantial, requiring careful oversight to ensure taxpayer value.

Value Assessment

Rating: fair

The contract value of $41.6 million over approximately six years for aircraft parts is substantial. Without competitive bidding, it is difficult to benchmark the pricing against market rates or similar contracts. The lack of competition means there's less assurance that the government is receiving the best possible price. Further analysis would be needed to determine if the pricing is reasonable given the specific nature of the parts and the sole-source award.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This typically occurs when only one vendor can provide the required goods or services, or in cases of urgent need. The lack of competition means that the government did not solicit bids from multiple suppliers, potentially leading to higher prices than if a competitive process had been used. The absence of bidders limits the government's ability to negotiate favorable terms.

Taxpayer Impact: Taxpayers may be paying a premium due to the lack of competitive pressure. Without multiple bids, there is less transparency into whether the price reflects true market value, potentially leading to inefficient use of public funds.

Public Impact

The U.S. Army benefits from the continued supply of essential rotary wing aircraft parts. This contract ensures the operational readiness of critical aviation assets. The contract supports jobs at Lockheed Martin's Owego, NY facility. The services delivered are crucial for maintaining the U.S. military's aviation capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices.
Long contract duration could mask inefficiencies or changing needs.
Sole-source awards reduce transparency and accountability in pricing.
Potential for vendor lock-in due to specialized nature of parts.

Positive Signals

Ensures critical supply chain for essential military aircraft.
Long-term award provides stability for contractor and government planning.
Contract awarded to a major defense contractor with established capabilities.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft parts manufacturing. The market for specialized aviation components is often characterized by high barriers to entry due to technical expertise and regulatory requirements. Comparable spending benchmarks are difficult to establish without knowing the exact nature of the parts, but large sole-source awards for critical components are not uncommon in this sector, though they warrant scrutiny.

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 notice. The impact on the small business ecosystem is therefore indirect, potentially limiting opportunities for smaller firms that might otherwise compete for such a contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army and potentially the Department of Defense's Inspector General. Accountability measures are inherent in the contract terms, but the lack of competition reduces the effectiveness of price-based accountability. Transparency is limited due to the sole-source nature, making external oversight crucial for ensuring value for money.

Related Government Programs

Aircraft Parts and Auxiliary Equipment Manufacturing
Rotary Wing Aircraft
Defense Logistics Agency
Department of the Army Aviation Programs

Risk Flags

Sole-source award
Long contract duration
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.6 million to LOCKHEED MARTIN CORPORATION. 200606!002403!2100!W58RGZ!USA AVIATION AND MISSILE COMMAND!W58RGZ06C0113 !A!N! !N! ! !20060328!20080630!002232973!002232973!834951691!N!LOCKHEED MARTIN CORPORATION !1801 STATE ROUTE 17C !OWEGO !NY!13827!55882!107!36!OWEGO !TIOGA !NEW YORK !+000013313160!Y!N!000000000000!1520!AIRCRAFT ROTARY WING !A1A!AIRFRAMES AND SPARES !000 !NOT DISCERNABLE !336413!E! !3! ! ! ! ! !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 Army).

What is the total obligated amount?

The obligated amount is $41.6 million.

What is the period of performance?

Start: 2006-03-28. End: 2012-03-30.

What is the specific nature of the 'Other Aircraft Parts and Auxiliary Equipment' being procured under this contract?

The provided data indicates the Product Service Code (PSC) is 'A1A' and the NationalНаименование (NAICS) is '336413', which corresponds to 'Other Aircraft Parts and Auxiliary Equipment Manufacturing'. While the specific parts are not detailed in the provided data snippet, this classification suggests components, sub-assemblies, or repair parts for rotary wing aircraft. These could range from structural elements and engine components to avionic systems or specialized hardware. The long duration and significant value imply these are critical, likely non-commercial, parts essential for the sustained operation and maintenance of specific Army aviation platforms.

How does the $41.6 million contract value compare to historical spending on similar rotary wing aircraft parts by the Department of the Army?

Without access to a broader historical spending database or more specific contract details (like the exact aircraft model or part numbers), a direct comparison is challenging. However, $41.6 million over approximately six years (2194 days) represents an average annual spend of roughly $7 million. This is a substantial amount, indicating a significant and ongoing requirement for these parts. The Department of the Army procures a vast array of aviation components, and while this figure might be typical for a sole-source award of critical, long-lifecycle parts, it warrants scrutiny against other competitive procurements for similar systems to ensure value.

What are the primary risks associated with a sole-source contract of this magnitude and duration?

The primary risks associated with this sole-source contract include potential price inflation due to the lack of competition, leading to inefficient use of taxpayer funds. There's also a risk of vendor lock-in, where the government becomes overly reliant on a single supplier, potentially limiting future flexibility and negotiation power. Furthermore, the long duration (over six years) increases the risk that the technology or the government's needs might evolve, making the contracted items obsolete or less suitable, yet the government remains committed to the original terms. Ensuring robust oversight and performance management is critical to mitigate these risks.

What performance metrics or oversight mechanisms are likely in place for this contract?

Given the nature of defense procurement, this contract likely includes performance standards related to delivery schedules, quality control, and technical specifications. Oversight would typically involve contract officers, quality assurance representatives, and potentially program managers within the Army. While the data doesn't specify, common mechanisms include regular progress reports, site inspections, acceptance testing of delivered parts, and defined remedies for non-performance. The long duration necessitates active contract management to ensure ongoing compliance and address any emerging issues.

What is Lockheed Martin Corporation's track record with the U.S. Army for aviation components?

Lockheed Martin Corporation, including its legacy Sikorsky division (which historically produced many rotary wing aircraft), has a long and extensive track record of supplying aviation components and platforms to the U.S. Army. They are a major defense contractor involved in numerous large-scale programs. Their experience encompasses design, manufacturing, and support for a wide range of military aircraft. While this specific contract is sole-source, Lockheed Martin's established presence and capabilities in the defense aviation sector suggest a history of fulfilling complex requirements for the Army, though performance on individual contracts can vary.

How does this contract fit into the broader landscape of U.S. Army aviation sustainment and modernization efforts?

This contract for rotary wing aircraft parts directly supports the sustainment of the existing U.S. Army aviation fleet. Ensuring the availability of critical components is fundamental to maintaining operational readiness and extending the service life of aircraft. While modernization efforts focus on introducing new platforms and technologies, effective sustainment ensures that current assets remain viable and mission-capable. This contract likely addresses a specific need within that sustainment framework, ensuring that essential parts are available for maintenance, repair, and overhaul activities, thereby underpinning the Army's current operational capabilities.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 1801 STATE ROUTE 17C, OWEGO, NY, 13827

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline