DoD's $22.7M RFI for Taiwan aircraft manufacturing awarded to Lockheed Martin without competition

Contract Overview

Contract Amount: $22,732,060 ($22.7M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2009-10-23

End Date: 2017-09-30

Contract Duration: 2,899 days

Daily Burn Rate: $7.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: RFI PRODUCTION FOR TAIWAN

Place of Performance

Location: OWEGO, TIOGA County, NEW YORK, 13827

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $22.7 million to LOCKHEED MARTIN CORPORATION for work described as: RFI PRODUCTION FOR TAIWAN Key points: 1. The contract's value, while significant, needs context against broader defense procurements. 2. Sole-source awards warrant scrutiny for potential price inflation and lack of market pressure. 3. The duration of the contract (over 8 years) suggests a long-term strategic need. 4. The specific nature of 'RFI Production' for Taiwan indicates a specialized, potentially sensitive requirement. 5. Lack of competition raises questions about whether alternative solutions were explored. 6. The award to a major defense contractor like Lockheed Martin is typical for complex aerospace needs.

Value Assessment

Rating: questionable

Benchmarking the value of this RFI production contract is challenging without knowing the specific deliverables and market for such specialized services. However, the absence of competition suggests that taxpayers may not have benefited from the most competitive pricing. Comparing it to similar RFI production contracts is difficult due to the unique geopolitical context and the specific nature of aircraft manufacturing support for a foreign partner.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This typically occurs when a specific contractor possesses unique capabilities, intellectual property, or is the only source capable of meeting the requirement. The lack of multiple bidders means that price discovery through competitive bidding was not utilized, potentially leading to higher costs for the government.

Taxpayer Impact: Sole-source awards mean taxpayers did not benefit from competitive pricing, potentially resulting in a higher overall expenditure for this requirement.

Public Impact

The primary beneficiary is the government of Taiwan, which will receive critical RFI production services related to aircraft manufacturing. The services delivered are essential for supporting Taiwan's defense capabilities and potentially its aerospace industry. The geographic impact is primarily focused on Taiwan, with potential indirect impacts on the US aerospace supply chain. Workforce implications may include specialized roles within Lockheed Martin and its subcontractors involved in RFI production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source awards can reduce transparency in pricing.
The long contract duration could mask inefficiencies if not properly managed.
Geopolitical sensitivities surrounding Taiwan could introduce unforeseen risks.

Positive Signals

Award to a prime defense contractor suggests established expertise.
RFI production indicates a focus on critical intelligence and readiness.
The contract supports a key strategic partner (Taiwan).

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on aircraft manufacturing and related support services. The market for specialized RFI production for foreign military partners is niche, often dominated by large, established defense contractors like Lockheed Martin due to the technical expertise, security clearances, and established relationships required. Comparable spending benchmarks would likely be found within broader foreign military sales or defense article production categories.

Small Business Impact

This contract does not appear to have a small business set-aside component, as it was awarded sole-source to Lockheed Martin Corporation. There is no indication of subcontracting plans specifically targeting small businesses within the provided data. The impact on the small business ecosystem is likely minimal for this particular award, as it bypasses the typical competitive bidding processes where small businesses might participate.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. Accountability measures would be tied to the terms and conditions of the definitive contract, including performance milestones and delivery schedules. Transparency may be limited due to the sole-source nature of the award. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse.

Related Government Programs

Foreign Military Sales (FMS)
Aircraft Manufacturing Support
Defense Intelligence Production
Aerospace Technology Development

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Geopolitical risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.7 million to LOCKHEED MARTIN CORPORATION. RFI PRODUCTION FOR TAIWAN

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 $22.7 million.

What is the period of performance?

Start: 2009-10-23. End: 2017-09-30.

What specific 'RFI Production' services were contracted for Taiwan, and what is the strategic importance of these services?

The term 'RFI Production' in this context likely refers to the creation or generation of Radio Frequency Intelligence (RFI) data or related products crucial for electronic warfare, signals intelligence, and situational awareness. For Taiwan, a region with significant geopolitical tensions, such intelligence is vital for understanding adversary capabilities, maintaining air defense superiority, and informing strategic decision-making. The production of this data could involve sophisticated analysis of intercepted signals, simulation of electronic environments, or development of countermeasures. The strategic importance lies in enhancing Taiwan's ability to detect, identify, and respond to potential threats in its airspace and surrounding areas, thereby bolstering its defense posture and deterring aggression.

Why was this contract awarded on a sole-source basis to Lockheed Martin Corporation?

Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. For 'RFI Production for Taiwan' related to aircraft manufacturing, Lockheed Martin likely possesses unique, proprietary technology, specialized knowledge, or established relationships and security clearances essential for fulfilling this specific requirement. This could include access to classified intelligence, unique manufacturing processes for sensitive components, or existing integration with Taiwan's defense systems that no other contractor could replicate. The Department of Defense would have had to formally justify this sole-source determination, likely citing factors such as national security, unique technical capabilities, or the absence of viable alternatives that could meet the urgent or specialized needs of Taiwan's defense.

How does the $22.7 million contract value compare to typical spending on similar RFI production or aircraft manufacturing support contracts?

Directly comparing the $22.7 million value of this 'RFI Production for Taiwan' contract to typical spending is challenging due to its specialized nature and sole-source award. Standard aircraft manufacturing contracts can range from millions to billions, depending on the scale and complexity of the aircraft. However, RFI production, especially when tied to intelligence and foreign military support, often involves high-value, low-volume services. If this contract covers a significant period (as indicated by the 8-year duration) and involves advanced technological development or intelligence analysis, the $22.7 million might represent a reasonable investment for critical capabilities. Without more specific details on the deliverables, it's difficult to benchmark against broader categories, but it suggests a focused, high-priority requirement rather than mass production.

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

The primary risk with a sole-source contract, especially one valued at $22.7 million over nearly eight years, is the potential for inflated pricing due to the lack of competitive pressure. Taxpayers may end up paying more than if the contract had been competed. Another risk is complacency; the contractor may have less incentive to innovate or improve efficiency compared to a competitive environment. Furthermore, the long duration increases the risk of scope creep or the contract becoming misaligned with evolving technological needs or strategic priorities without the regular re-evaluation that competition might provide. There's also a reduced transparency in cost justification, making it harder for oversight bodies to ensure optimal value for money.

What is Lockheed Martin Corporation's track record in fulfilling defense contracts, particularly those involving international partners and specialized production?

Lockheed Martin Corporation has an extensive and well-established track record in fulfilling complex defense contracts for the U.S. Department of Defense and numerous international partners. They are a leading global security and aerospace company, known for producing advanced military aircraft (like the F-35, F-16, and F-22), missile systems, and defense electronics. Their experience includes significant involvement in foreign military sales and providing sophisticated support services. Given their deep expertise in aerospace manufacturing, advanced technologies, and navigating international defense agreements, Lockheed Martin is a logical choice for specialized production requirements like RFI generation for strategic allies such as Taiwan. Their history suggests a capability to handle large-scale, technologically demanding projects, though the specifics of RFI production would be a particular area of focus.

How does this contract fit into the broader context of U.S. defense spending and support for Taiwan?

This $22.7 million contract for RFI production for Taiwan fits within the broader U.S. strategy of supporting Taiwan's self-defense capabilities amidst regional security challenges. U.S. defense spending often includes provisions for foreign military sales, training, and technical assistance to key allies. Contracts like this, even if sole-source, represent a tangible investment in enhancing Taiwan's technological edge and intelligence-gathering capacity, which is crucial for maintaining stability in the Indo-Pacific region. It aligns with U.S. policy objectives aimed at deterring potential adversaries and ensuring Taiwan can effectively defend itself. The specific focus on RFI production highlights the increasing importance of electronic warfare and signals intelligence in modern defense strategies.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W58RGZ09R0425

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

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

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: $22,973,248

Exercised Options: $22,732,060

Current Obligation: $22,732,060

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline