DoD awards $40M+ for aircraft parts, with Lockheed Martin as sole provider

Contract Overview

Contract Amount: $40,005,940 ($40.0M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2012-11-20

End Date: 2019-09-30

Contract Duration: 2,505 days

Daily Burn Rate: $16.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::OT::IGF DEFINITIZATION OF CONTRACT

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32819

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $40.0 million to LOCKHEED MARTIN CORPORATION for work described as: IGF::OT::IGF DEFINITIZATION OF CONTRACT Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Long contract duration of over 2500 days suggests a sustained need. 3. Firm Fixed Price contract type shifts risk to the contractor. 4. Geographic concentration in Florida for contract performance. 5. No small business set-aside indicates potential for large prime contractor focus.

Value Assessment

Rating: questionable

The contract value of over $40 million for aircraft parts, awarded to Lockheed Martin, requires further scrutiny due to the sole-source nature. Without competitive bidding, it is difficult to benchmark the pricing against market rates or similar contracts. The firm fixed-price structure is generally favorable for cost control, but the absence of competition raises concerns about whether the government secured the best possible value. A detailed cost analysis would be necessary to assess the reasonableness of 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. This approach bypasses the standard competitive procurement process, which typically involves soliciting offers from multiple vendors. The lack of competition means there was no opportunity for price discovery through bidding, potentially leading to higher costs for the government compared to a competed contract.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure to lower prices. The government did not benefit from the potential cost savings that can arise from multiple companies vying for the contract.

Public Impact

The Department of the Army benefits from the supply of essential aircraft parts. This contract supports the maintenance and operational readiness of military aircraft. Performance is concentrated in Florida, potentially impacting the local economy and workforce. The contract likely supports specialized manufacturing and technical expertise within Lockheed Martin.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and value for money.
Lack of transparency in pricing due to no competitive bidding.
Long contract duration may mask potential inefficiencies or cost overruns.

Positive Signals

Firm Fixed Price contract shifts cost risk to the contractor.
Award to a known entity (Lockheed Martin) suggests established capabilities.
Contract supports critical defense needs for aircraft parts.

Sector Analysis

This contract falls within the "Other Aircraft Parts and Auxiliary Equipment Manufacturing" sector, a critical component of the aerospace and defense industry. This sector is characterized by high technological barriers to entry and often involves specialized manufacturing processes. Spending in this area is directly tied to military readiness and the operational lifespan of aircraft fleets. Comparable spending benchmarks would typically be found within other sole-source or limited-competition contracts for similar specialized aircraft components.

Small Business Impact

The contract was not set aside for small businesses, and the data indicates no subcontracting goals were specified (sb: false). This suggests that the prime contractor, Lockheed Martin, is expected to fulfill the requirements directly or through its own supply chain. Consequently, there is no direct benefit or impact on the small business ecosystem through this specific contract's set-aside provisions. Opportunities for small businesses would likely arise indirectly through Lockheed Martin's broader procurement activities.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and financial management regulations. As a definitive contract, it is subject to standard audit and review processes. The Inspector General's office within the DoD would have jurisdiction to investigate any potential fraud, waste, or abuse. Transparency is limited due to the sole-source nature, but contract award data is publicly available.

Related Government Programs

Department of Defense Aircraft Procurement
Military Aircraft Maintenance and Repair
Aerospace Manufacturing Contracts
Lockheed Martin Defense Contracts

Risk Flags

Sole-source award raises concerns about price competition.
Lack of transparency in pricing mechanisms.
Potential for higher costs due to lack of competitive bidding.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.0 million to LOCKHEED MARTIN CORPORATION. IGF::OT::IGF DEFINITIZATION OF CONTRACT

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 $40.0 million.

What is the period of performance?

Start: 2012-11-20. End: 2019-09-30.

What is the historical spending pattern for this specific contract vehicle or similar aircraft parts with Lockheed Martin?

Analyzing historical spending for this specific contract (identified by its unique award ID, if available) or for similar aircraft parts procured from Lockheed Martin by the Department of the Army would provide crucial context. Without specific historical data for this contract number, we can infer that the $40 million+ awarded over its duration (2012-2019) represents a significant investment. If this contract was a continuation or replacement of previous agreements, examining prior award amounts, durations, and pricing trends would reveal whether spending has increased, decreased, or remained stable. This analysis is vital for understanding the long-term financial commitment and identifying any potential escalation in costs over time, especially given the sole-source nature of this award.

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

Determining the per-unit cost benchmark for these specific aircraft parts is challenging without detailed product specifications and quantities. However, given the sole-source nature of the award to Lockheed Martin, there's a heightened risk that the per-unit cost may be higher than if the contract had been competitively bid. To perform a robust comparison, one would need access to Lockheed Martin's pricing structure for these components and benchmark it against publicly available data for similar parts from other manufacturers or against historical data from previously competed contracts for comparable items. The absence of competition inherently limits the government's ability to negotiate the lowest possible per-unit price, making external benchmarking essential for value assessment.

What specific types of aircraft parts are covered under this contract, and what is their criticality to military operations?

The contract NAICS code 336413 indicates 'Other Aircraft Parts and Auxiliary Equipment Manufacturing.' This broad category encompasses a wide range of components, potentially including structural elements, engine parts, avionics, or specialized systems. The criticality of these parts to military operations would depend on their specific function. For instance, components for primary flight controls, engines, or life support systems would be considered highly critical, directly impacting aircraft safety and mission capability. Parts for less critical auxiliary systems might have more flexibility in terms of sourcing and replacement schedules. Understanding the specific parts procured is essential for assessing the risk associated with a sole-source award and the potential impact of supply chain disruptions.

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

Sole-source awards are typically justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required supplies or services, or when there is a compelling urgency. For a large defense contractor like Lockheed Martin providing aircraft parts, justifications often revolve around proprietary technology, unique manufacturing capabilities, or the need for commonality with existing platforms where switching suppliers would be prohibitively expensive or technically infeasible. The specific justification for this $40 million+ contract would be documented in the contract file and potentially in public award notices, detailing why competitive procedures were not utilized. Understanding this justification is key to evaluating the necessity of the sole-source approach.

What is Lockheed Martin's track record with the Department of Defense regarding performance and compliance on similar contracts?

Lockheed Martin is a major defense contractor with an extensive history of performance across numerous contracts with the Department of Defense. Their track record generally includes the delivery of complex systems and components, though like any large contractor, they may have faced performance issues or contract disputes on specific programs. For this particular contract, assessing their performance would involve reviewing contract performance reports, any past performance evaluations, and any documented instances of quality issues, delivery delays, or cost overruns. Given the firm fixed-price nature, the focus would be on timely delivery and adherence to specifications. A review of their overall relationship with the DoD and their compliance history provides a broader context for evaluating this specific award.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W58RGZ11R0268

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

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: $51,816,802

Exercised Options: $40,005,940

Current Obligation: $40,005,940

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline