DoD Awards $54M for Aircraft Parts to Lockheed Martin, Raising Value Concerns
Contract Overview
Contract Amount: $54,076,740 ($54.1M)
Contractor: Lockheed Martin Integrated Systems, LLC
Awarding Agency: Department of Defense
Start Date: 2003-12-18
End Date: 2012-05-11
Contract Duration: 3,067 days
Daily Burn Rate: $17.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 200403!000044!5700!GJ40 !WARNER ROBINS ALC/LUK !F0960301D0207 !A!N! !N!0059 ! !20031218!20061218!836196972!805258373!834951691!N!LOCKHEED MARTIN INTEGRATED SYS!6801 ROCKLEDGE DRIVE !BETHESDA !NJ!20817!74260!001!09!STRATFORD !FAIRFIELD !CONN !+000006457860!N!N!000000000000!1520!AIRCRAFT ROTARY WING !A1A!AIRFRAMES AND SPARES !000 !* !336413!E! !5!B!M! !C! !99990909!B! ! !A! !A!N!J!1!001!B! !A!Y!A! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !
Place of Performance
Location: WARNER ROBINS, HOUSTON County, GEORGIA, 31088
State: Georgia Government Spending
Plain-Language Summary
Department of Defense obligated $54.1 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC for work described as: 200403!000044!5700!GJ40 !WARNER ROBINS ALC/LUK !F0960301D0207 !A!N! !N!0059 ! !20031218!20061218!836196972!805258373!834951691!N!LOCKHEED MARTIN INTEGRATED SYS!6801 ROCKLEDGE DRIVE !BETHESDA !NJ!20817!74260!001!09!STRATFORD !FAIR… Key points: 1. The contract value of $54,076,739.74 appears high for aircraft parts, warranting scrutiny. 2. Lockheed Martin is a dominant player, potentially limiting competitive options. 3. The long duration (2003-2012) and firm fixed-price nature suggest potential for cost overruns if initial estimates were inaccurate. 4. Spending in the aircraft manufacturing sector is substantial, but this specific award needs context.
Value Assessment
Rating: questionable
The contract value of over $54 million for aircraft parts seems substantial. Benchmarking against similar contracts for airframes and spares is crucial to determine if this pricing is competitive or inflated.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
While advertised as full and open competition, the award to a single entity, Lockheed Martin, raises questions about the effectiveness of the competition process and whether the best possible price was achieved.
Taxpayer Impact: The significant value of this contract means taxpayers could be overpaying if the competition was not robust or if pricing was not adequately scrutinized.
Public Impact
Taxpayers may be footing a bill that could have been lower with more effective competition. The long contract period could mean sustained, potentially excessive, spending on aircraft components. Dependence on a single large contractor like Lockheed Martin can impact future pricing and innovation. The specific nature of the parts (rotary wing aircraft) suggests a critical role in military readiness.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for overpricing due to limited effective competition.
- Long contract duration may mask inefficiencies.
- Lack of transparency on specific part costs.
Positive Signals
- Firm fixed-price contract provides cost certainty for the government.
- Awarded to a known, experienced defense contractor.
Sector Analysis
This contract falls within the Defense sector, specifically aircraft manufacturing. Spending in this area is often high due to the complexity and critical nature of military aviation. Benchmarks for similar contracts are essential for evaluating value.
Small Business Impact
The data indicates the award went to Lockheed Martin, a large corporation. There is no immediate indication of small business participation in this specific contract, which is common for large prime contracts.
Oversight & Accountability
The contract was awarded by the Department of Defense via the Defense Contract Management Agency. Oversight would involve monitoring performance, delivery, and adherence to contract terms, but the effectiveness of price oversight is a concern.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- High contract value for aircraft spares.
- Potential for limited effective competition despite 'full and open' designation.
- Long contract duration (original award 2003, potential end 2012).
- Lack of transparency on specific part costs and unit pricing.
- Sole awardee raises questions about competitive pressure.
Tags
aircraft-manufacturing, department-of-defense, ga, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $54.1 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC. 200403!000044!5700!GJ40 !WARNER ROBINS ALC/LUK !F0960301D0207 !A!N! !N!0059 ! !20031218!20061218!836196972!805258373!834951691!N!LOCKHEED MARTIN INTEGRATED SYS!6801 ROCKLEDGE DRIVE !BETHESDA !NJ!20817!74260!001!09!STRATFORD !FAIRFIELD !CONN !+000006457860!N!N!000000000000!1520!AIRCRAFT ROTARY WING !A1A!AIRFRAMES AND SPARES !000 !* !336413!E! !5!B!M! !C! !999
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $54.1 million.
What is the period of performance?
Start: 2003-12-18. End: 2012-05-11.
What specific aircraft components were procured under this contract, and how do their unit costs compare to industry standards for similar parts?
The contract specifies 'AIRCRAFT ROTARY WING' components and 'AIRFRAMES AND SPARES'. Without a detailed breakdown of the specific parts and their quantities, a precise unit cost benchmark is difficult. However, the overall value of $54 million for spares over a period potentially extending to 2012 suggests significant investment. Further analysis would require access to the contract's line item details to compare against market rates for comparable rotary-wing airframe components.
Given the 'full and open competition' designation, what factors led to a single award to Lockheed Martin, and were alternative bids seriously considered?
While designated 'full and open competition,' the award to a single entity, Lockheed Martin, warrants investigation. Factors could include highly specialized requirements, existing platform integration, or potentially a flawed solicitation process. Understanding the bidding landscape, the number of proposals received, and the evaluation criteria used is crucial to determine if the competition was truly effective in driving down costs and ensuring the best value for the government.
How does the firm fixed-price (FFP) contract structure mitigate or exacerbate risks related to cost overruns for these aircraft parts?
A Firm Fixed Price (FFP) contract generally shifts the risk of cost overruns to the contractor, Lockheed Martin. This means the government pays a set price regardless of the contractor's actual costs. While this provides budget certainty, it also means that if Lockheed Martin underestimated costs, they absorb the loss. Conversely, if their costs are lower than anticipated, they realize a higher profit. The risk for the government lies in potentially paying a premium upfront to account for the contractor's risk.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
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: 645 TALLULAH TRAIL SUITE 101, WARNER ROBINS, GA, 31088
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $4,629,700
Exercised Options: $4,629,700
Current Obligation: $54,076,740
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: F0960301D0207
IDV Type: IDC
Timeline
Start Date: 2003-12-18
Current End Date: 2012-05-11
Potential End Date: 2012-05-11 00:00:00
Last Modified: 2018-05-22
More Contracts from Lockheed Martin Integrated Systems, LLC
- 200407!000098!5700!LA01 !11 Cons/Lgcw !FA701204C0003 !A!N! !N! ! !20031121!20130630!836196972!805258373!834951691!n!lockheed Martin Integrated SYS!6801 Rockledge Drive !bethesda !nj!20817!50000!001!11!washington !district of Columbia !D.C. !+000010350876!n!n!000530185344!d399!other Adp&telecommunication Services !S1 !services !000 !* !541690!A!B!3! ! ! ! ! !99990909!b!b!y!b! !a!n!l!2!007!b! !C!Y!F! ! !N!C!N! ! ! !b!z!a!a!000!a!b!n! ! ! !Y! ! !0001! ! — $679.5M (Department of Defense)
- 200611!007847!2100!w15p7t!usa Communications-Electronics !daab0703db009 !A!N! !Y!0243 ! !20060831!20110129!068514251!805258373!834951691!n!lockheed Martin Integrated SYS!1800 Route 34 !wall !nj!07719!76460!025!34!wall (township OF) !monmouth !NEW Jersey!+000077463827!n!n!000000000000!r414!systems Engineering Services !A7 !electronics and Communication Equip !000 !NOT Discernable !541330!E! !5!B!M! !A! !99990909!B! ! !A! !a!n!y!2!014!b! !C!N!Z! ! !N!C!N! ! ! !c!z!a!a!000!a!c!n! ! ! ! ! ! !0001! ! — $448.3M (Department of Defense)
- ISS Cargo Mission Contract (CMC) — $406.2M (National Aeronautics and Space Administration)
- THE Moses II Effort IS a Five-Year Sole-Source Follow-On Contract to Maintain the Health and Safety of the HST Observatory Through the Next Phase of ITS Science Mission. the Scope of This Follow-On Effort Includes Conducting ALL Elements of HST Operations Other Than Science Operations, and to Perform Systems Engineering Tasks Required to Properly Maintain HST Flight and Ground Systems.mission Operations Responsibilities Include Safe and Efficient Control and Utilization of the HST Observatory, Maintenance and Operation of Hst-Unique Facilities and Equipment, AS Well AS Creation, Maintenance, and Utilization of HST Operations Processes and Procedures. Critical Systems Engineering Responsibilities Consist of Optimizing Mission System Capabilities to Maximize HST Operations Effectiveness and Science Productivity. Essential Management Requirements Include Providing a Technical Staff Possessing In-Depth Knowledge of HST S Varied, Complex, and Unique Flight and Ground Systems, Ensuring Successful Accomplishment of the Diverse Tasks Necessary to Effectively Conduct HST Mission Operations and Systems Engineering AS Well AS to Manage and Report Contract Element Cost and Schedule Performance — $360.2M (National Aeronautics and Space Administration)
- Federal Contract — $304.3M (Department of Defense)
View all Lockheed Martin Integrated Systems, LLC federal contracts →
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)