DoD's $32.6M APACHE VUIT-2 contract awarded to Lockheed Martin Corporation for aircraft parts

Contract Overview

Contract Amount: $32,577,639 ($32.6M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2007-09-07

End Date: 2011-06-30

Contract Duration: 1,392 days

Daily Burn Rate: $23.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: APACHE VUIT-2

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32819, UNITED STATES OF AMERICA

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $32.6 million to LOCKHEED MARTIN CORPORATION for work described as: APACHE VUIT-2 Key points: 1. Value for money is difficult to assess due to the lack of competition and limited public data. 2. Competition dynamics indicate a sole-source award, potentially limiting price discovery and increasing costs. 3. Risk indicators include the sole-source nature of the award and the extended duration of the contract. 4. Performance context is limited, with no specific details on the services delivered or their effectiveness. 5. Sector positioning places this contract within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' industry. 6. The contract's duration of nearly four years suggests a significant, ongoing need for these parts.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the absence of comparable contract data. The total award amount of $32.6 million over approximately 1392 days (nearly four years) does not provide sufficient detail to assess cost-effectiveness. Without competitive bidding or clear performance metrics, it's difficult to determine if the pricing is fair or if the government received optimal value. Further analysis would require access to detailed cost breakdowns and performance reports.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, or in cases of urgent need. The lack of competition means there was no opportunity for price negotiation or comparison against other potential suppliers, which can lead to higher costs for the government.

Taxpayer Impact: Taxpayers may have paid a premium for these aircraft parts due to the absence of competitive bidding. The government did not benefit from the price reductions that often result from a competitive procurement process.

Public Impact

The primary beneficiaries of this contract are the Department of Defense, specifically units utilizing Apache helicopters. The services delivered involve the provision of 'Other Aircraft Parts and Auxiliary Equipment' essential for the maintenance and operation of Apache aircraft. The geographic impact is primarily within Florida, where the contract was managed by the Defense Contract Management Agency. Workforce implications are likely related to manufacturing and supply chain jobs within the aerospace and defense sector, supporting Lockheed Martin Corporation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of detailed performance data makes it difficult to assess the effectiveness and value of the delivered parts.
The extended contract duration without clear performance benchmarks raises concerns about long-term cost efficiency.
Limited public information hinders a comprehensive understanding of the contract's specific requirements and outcomes.

Positive Signals

Awarded to a major defense contractor, Lockheed Martin Corporation, suggesting a capacity to meet complex requirements.
The contract addresses a specific need for aircraft parts, indicating support for critical military operations.
The contract was managed by the Defense Contract Management Agency, implying a level of oversight.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' category (NAICS 336413) encompasses a wide range of components necessary for aircraft operation and maintenance. The total federal spending in this sector can be substantial, driven by military modernization and operational needs. Comparable spending benchmarks would typically involve analyzing other contracts for similar aircraft parts or maintenance services, ideally those awarded through competitive processes.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no information provided regarding subcontracting plans or their impact on the small business ecosystem. Given the sole-source nature and the prime contractor being Lockheed Martin Corporation, it is possible that subcontracting opportunities for small businesses may exist, but this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract was likely managed by the Defense Contract Management Agency (DCMA), as indicated by 'sa'. Accountability measures would typically involve contract performance reviews, delivery schedules, and quality control. Transparency is limited due to the sole-source award and the proprietary nature of defense contracts. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Apache Helicopter Maintenance
Defense Aircraft Parts Procurement
Lockheed Martin Defense Contracts
Sole-Source Defense Awards
Department of Defense Aircraft Sustainment

Risk Flags

Sole-source award
Lack of competition
Cost-plus contract type requires robust oversight
Limited public performance data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.6 million to LOCKHEED MARTIN CORPORATION. APACHE VUIT-2

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 $32.6 million.

What is the period of performance?

Start: 2007-09-07. End: 2011-06-30.

What is the specific nature of the 'APACHE VUIT-2' parts being procured under this contract?

The provided data identifies the contract as 'APACHE VUIT-2' and categorizes the procurement under NAICS code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing.' While the specific part numbers or technical specifications are not detailed, this suggests the contract covers components essential for the operation, maintenance, or upgrade of Apache military helicopters. These could range from structural components, engine parts, avionics, or specialized systems integral to the aircraft's functionality. The 'VUIT-2' designation likely refers to a specific system or modification package relevant to the Apache platform.

How does the $32.6 million award amount compare to typical spending on similar aircraft parts for the Apache program?

Direct comparison of the $32.6 million award for 'APACHE VUIT-2' to typical spending on similar Apache parts is difficult without more granular data. This contract's total value over its duration (2007-2011) represents a significant investment. However, the sole-source nature of this award means it cannot be benchmarked against competitive bids for similar components. To provide a meaningful comparison, one would need to analyze historical spending on comparable Apache parts, ideally from competitively awarded contracts, and consider factors like inflation, technological advancements, and the specific criticality of the parts procured under this contract.

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

The primary risks associated with a sole-source contract of this magnitude ($32.6 million) and duration (nearly four years) include potential overpricing due to the lack of competition, reduced incentive for the contractor to innovate or improve efficiency, and a lack of transparency in the procurement process. Taxpayers may not be receiving the best possible value for their money. Furthermore, reliance on a single source can create supply chain vulnerabilities if the contractor faces production issues or financial instability. The government also has less leverage in negotiating terms and conditions compared to a competitive scenario.

What does the contract type 'COST PLUS FIXED FEE' imply about the government's oversight and the contractor's incentives?

The 'COST PLUS FIXED FEE' (CPFF) contract type means the government reimburses the contractor for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure incentivizes the contractor to complete the work but provides less incentive for cost control compared to fixed-price contracts, as the fee is fixed regardless of the final cost. For the government, this requires robust oversight to ensure costs are reasonable and allowable. It shifts some of the cost risk to the government, as the final price is not fixed upfront. This type of contract is often used when the scope of work is not precisely defined or involves significant uncertainty.

What is the historical spending pattern for 'APACHE VUIT-2' or similar components by the Department of Defense?

The provided data only details a single contract for 'APACHE VUIT-2' awarded in 2007. Without access to broader contract databases or specific program spending reports, it is challenging to establish a comprehensive historical spending pattern for these components. However, the fact that the Department of Defense procured these parts suggests a recurring need tied to the operational readiness and maintenance of the Apache helicopter fleet. Analyzing past and future contracts for similar parts, especially those awarded competitively, would be necessary to understand the long-term investment and trends in this area.

What is the track record of Lockheed Martin Corporation in fulfilling similar sole-source defense contracts?

Lockheed Martin Corporation is a major defense contractor with extensive experience in fulfilling a wide array of defense contracts, including those awarded on a sole-source basis. Their track record generally involves delivering complex systems and components for various military platforms. However, the specific performance and value derived from their sole-source contracts can vary. For this particular 'APACHE VUIT-2' contract, the limited public data makes a detailed assessment of Lockheed Martin's performance difficult. Generally, large sole-source contracts with major contractors are subject to significant oversight, but potential issues related to cost and efficiency can still arise.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 5600 W SAND LAKE RD MP125, ORLANDO, FL, 32819

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

Financial Breakdown

Contract Ceiling: $34,882,686

Exercised Options: $34,882,686

Current Obligation: $32,577,639

Contract Characteristics

Cost or Pricing Data: NO

Timeline