DoD's $565M Lockheed Martin CLS Contract: Aircraft Manufacturing Spending Under Scrutiny
Contract Overview
Contract Amount: $564,801,962 ($564.8M)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2014-09-01
End Date: 2018-09-30
Contract Duration: 1,490 days
Daily Burn Rate: $379.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 7
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: CONTRACTOR LOGISTICS SUPPORT (CLS)
Place of Performance
Location: WARNER ROBINS, HOUSTON County, GEORGIA, 31088
State: Georgia Government Spending
Plain-Language Summary
Department of Defense obligated $564.8 million to LOCKHEED MARTIN CORP for work described as: CONTRACTOR LOGISTICS SUPPORT (CLS) Key points: 1. Significant contract value of $564.8M for Contractor Logistics Support. 2. Lockheed Martin Corp, a major defense contractor, holds this award. 3. The contract falls under the Aircraft Manufacturing sector, indicating specialized services. 4. Full and open competition was utilized, suggesting a competitive bidding process.
Value Assessment
Rating: fair
The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. Benchmarking against similar CLS contracts is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which generally promotes competitive pricing. However, the Cost Plus Fixed Fee structure requires diligent oversight to ensure fair pricing and prevent excessive profit.
Taxpayer Impact: Taxpayer funds are being utilized for critical logistics support, with the effectiveness of the competitive process and cost controls determining the ultimate value for money.
Public Impact
Ensures continued operational readiness for critical aircraft platforms. Supports a major defense contractor and its supply chain. Potential for cost efficiencies through competitive bidding and fixed-fee structure. Requires robust oversight to manage costs and ensure performance.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee structure requires careful monitoring.
- Long duration of the contract (1490 days) increases risk of scope creep or changing requirements.
- Lack of specific performance metrics makes it hard to assess effectiveness.
Positive Signals
- Awarded under full and open competition.
- Contractor is a well-established entity in defense logistics.
- Supports critical national defense assets.
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, specifically for Contractor Logistics Support. Spending in this area is crucial for maintaining military readiness, but can be subject to high costs due to specialized requirements and limited competition for certain platforms.
Small Business Impact
The data does not indicate any specific subcontracting goals or participation from small businesses in this contract. Further investigation would be needed to determine the extent of small business involvement.
Oversight & Accountability
The contract's Cost Plus Fixed Fee nature necessitates strong government oversight to ensure costs are reasonable and performance is met. The number of delivery orders (7) suggests ongoing tasking and management.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Cost Plus Fixed Fee structure.
- Lack of specific performance metrics.
- Long contract duration.
- Potential for cost overruns without stringent oversight.
Tags
aircraft-manufacturing, department-of-defense, ga, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $564.8 million to LOCKHEED MARTIN CORP. CONTRACTOR LOGISTICS SUPPORT (CLS)
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORP.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $564.8 million.
What is the period of performance?
Start: 2014-09-01. End: 2018-09-30.
What is the breakdown of costs within the Cost Plus Fixed Fee structure, and how does it compare to industry standards for similar CLS contracts?
A detailed cost breakdown is essential to assess the value of this contract. The Cost Plus Fixed Fee (CPFF) structure allows the contractor to recover all allowable costs plus a predetermined fixed fee. Without specific line items for labor, materials, overhead, and profit, it's challenging to benchmark against industry standards. Variations in these components can significantly impact the overall cost-effectiveness for the government.
What are the key performance indicators (KPIs) for this contract, and how is Lockheed Martin's performance being measured against them?
Effective oversight requires clearly defined KPIs tied to aircraft availability, maintenance turnaround times, parts delivery, and overall mission readiness. The absence of this information in the provided data raises concerns about accountability. Regular performance reviews and adherence to these metrics are crucial for ensuring the contractor delivers on its obligations and justifies the significant expenditure.
How does the total contract value of $564.8M compare to the estimated cost of performing similar logistics support in-house or through alternative providers?
Benchmarking this contract's value against in-house capabilities or alternative providers is vital for assessing cost-effectiveness. While CLS contracts often offer specialized expertise and rapid response, their cost can be higher than organic support. A thorough cost-benefit analysis, considering factors like personnel, infrastructure, and specialized tooling, would illuminate whether this contract represents good value for taxpayer money.
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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 7
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 86 SOUTH COBB DR, MARIETTA, GA, 30063
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: $1,197,781,960
Exercised Options: $1,097,873,406
Current Obligation: $564,801,962
Subaward Activity
Number of Subawards: 8
Total Subaward Amount: $13,474,897
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA853008D0008
IDV Type: IDC
Timeline
Start Date: 2014-09-01
Current End Date: 2018-09-30
Potential End Date: 2018-09-30 00:00:00
Last Modified: 2025-04-24
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