DoD's $42.4M MESA Facility Contract Awarded to Lockheed Martin Raises Questions on Competition and Value
Contract Overview
Contract Amount: $42,365,239 ($42.4M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2006-12-21
End Date: 2012-02-28
Contract Duration: 1,895 days
Daily Burn Rate: $22.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: CY 07 MESA INDUCTION AND INTEGRATION SUPPORT FACILITY (MIISF) INDUCTION, REFURBISHMENT, MODIFICATION AND APPLICATION OF B-KIT LEGACY
Place of Performance
Location: ORLANDO, ORANGE County, FLORIDA, 32819
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $42.4 million to LOCKHEED MARTIN CORPORATION for work described as: CY 07 MESA INDUCTION AND INTEGRATION SUPPORT FACILITY (MIISF) INDUCTION, REFURBISHMENT, MODIFICATION AND APPLICATION OF B-KIT LEGACY Key points: 1. The contract awarded to Lockheed Martin for the MESA Induction and Integration Support Facility (MIISF) lacks competitive bidding, raising concerns about potential overpricing. 2. The $42.4 million contract is for induction, refurbishment, modification, and application of B-Kit legacy systems, a specialized area within defense manufacturing. 3. The absence of competition and the firm-fixed-price structure warrant scrutiny to ensure taxpayer funds are used efficiently. 4. The contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code, with a significant value for this sector.
Value Assessment
Rating: questionable
The $42.4 million contract value for refurbishment and modification services is substantial. Without competitive bidding, it's difficult to benchmark against similar contracts to assess if the pricing is fair and reasonable.
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 the government compared to a competitive process.
Taxpayer Impact: The lack of competition means taxpayers may be paying a premium for these services, as there was no market pressure to drive down costs.
Public Impact
Taxpayers may be overpaying for specialized aircraft support services due to the absence of competitive bidding. The Department of Defense is relying on a single contractor for critical facility support, potentially limiting future options and innovation. The long duration of the contract (over 5 years) amplifies the potential financial impact of a non-competitive award.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of Competition
- Potential for Overpricing
- Sole-Source Award
Positive Signals
- Specific facility support requirement met
- Contract awarded to established defense contractor
Sector Analysis
This contract falls within the Defense sector, specifically supporting aircraft parts and auxiliary equipment manufacturing. Spending benchmarks for specialized refurbishment and integration services can vary widely, but the lack of competition here is a key concern.
Small Business Impact
The contract was awarded to Lockheed Martin Corporation, a large prime contractor. There is no indication of subcontracting opportunities for small businesses within the provided data.
Oversight & Accountability
The Department of Defense, through the Defense Contract Management Agency, is responsible for overseeing this contract. However, the lack of competition suggests a potential gap in ensuring the best value was obtained.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competitive bidding
- Potential for inflated pricing
- Sole-source award limits market research
- Long contract duration amplifies risk
- No clear indication of small business participation
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, fl, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $42.4 million to LOCKHEED MARTIN CORPORATION. CY 07 MESA INDUCTION AND INTEGRATION SUPPORT FACILITY (MIISF) INDUCTION, REFURBISHMENT, MODIFICATION AND APPLICATION OF B-KIT LEGACY
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 $42.4 million.
What is the period of performance?
Start: 2006-12-21. End: 2012-02-28.
What justification was provided for the sole-source award of this $42.4 million contract?
The provided data indicates the contract was 'NOT COMPETED'. A formal justification for a sole-source award would typically detail specific circumstances, such as the unavailability of other sources, urgent needs, or unique capabilities possessed by the sole contractor. Without this justification, it's impossible to assess the validity of bypassing the competitive process.
How does the firm-fixed-price structure mitigate or exacerbate the risks associated with a sole-source award?
A firm-fixed-price contract aims to provide cost certainty for the government. However, in a sole-source situation, this structure can exacerbate risk if the initial price is not well-justified or benchmarked. While the contractor bears the risk of cost overruns, the government bears the risk of paying an inflated price from the outset due to the lack of competitive pressure.
What is the potential long-term impact on the government's ability to procure similar services competitively if this sole-source contract is extended or renewed?
Long-term sole-source awards can stifle competition by creating vendor lock-in and reducing the incentive for other companies to develop competing capabilities. If the government continues to rely on Lockheed Martin for these specific MIISF services without exploring alternatives, it may become increasingly difficult and costly to introduce competition in the future, potentially leading to sustained higher prices.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: MAINT/REPAIR SHOP EQPT
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: 5600 W SAND LAKE RD MP125, ORLANDO, FL, 90
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $43,143,432
Exercised Options: $43,143,432
Current Obligation: $42,365,239
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2006-12-21
Current End Date: 2012-02-28
Potential End Date: 2012-02-28 00:00:00
Last Modified: 2014-03-11
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