DoD awards $2.48B F-22 Raptor airframe contract to Lockheed Martin, raising questions on competition and value

Contract Overview

Contract Amount: $2,479,351,307 ($2.5B)

Contractor: Lockheed Martin Corp

Awarding Agency: Department of Defense

Start Date: 2001-01-22

End Date: 2018-02-28

Contract Duration: 6,246 days

Daily Burn Rate: $396.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200104!000019!5700!GU75 !ASC/YFK !F3365700C0020 !A!N!*!N! !20010122!20010228!003268869!003268869!834951691!N!LOCKHEED MARTIN CORPORATION !86 SOUTH COBB DRIVE !MARIETTA !GA!30063!49756!067!13!MARIETTA !COBB !GEORGIA !+000040000000!N!N!000000000000!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !3AFB!F-22 RAPTOR !921190!*!*!1! ! ! !*!*!*!B!*!*!A! !D !N!J!1!001!N!1G!A!N!A! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001!

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76108

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $2.48 billion to LOCKHEED MARTIN CORP for work described as: 200104!000019!5700!GU75 !ASC/YFK !F3365700C0020 !A!N!*!N! !20010122!20010228!003268869!003268869!834951691!N!LOCKHEED MARTIN CORPORATION !86 SOUTH COBB DRIVE !MARIETTA !GA!30063!49756!067!13!MARIETTA !COBB !GEORGIA !+000040000000!N!N!000000000000!1510!AIRCRAFT FIXED WING !A1A!AIR… Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Significant contract value suggests a critical role in national defense, but lacks competitive benchmarking. 3. Long contract duration (over 17 years) may indicate evolving requirements or a lack of agile procurement. 4. Firm Fixed Price contract type offers cost certainty but may not incentivize contractor efficiency. 5. The F-22 Raptor program is a high-profile, technologically advanced defense asset. 6. Contractor's established relationship with the F-22 program suggests deep institutional knowledge.

Value Assessment

Rating: questionable

The total award amount of $2.48 billion for airframes and spares for the F-22 Raptor program is substantial. However, without a competitive bidding process, it is difficult to benchmark the value for money. The firm fixed-price contract type provides cost certainty to the government, but the lack of competition means there's no direct comparison to assess if this price is optimal. The long duration of the contract also makes it challenging to evaluate its cost-effectiveness over time without more granular performance data.

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 considered. This approach is typically used when only one responsible source can provide the required supplies or services. The lack of competition means there were no other companies vying for this contract, which can limit price negotiation leverage for the government and may result in higher costs than if multiple bids were solicited.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without competing offers, the government has less ability to negotiate the lowest possible price for these critical aircraft components.

Public Impact

The primary beneficiaries are the U.S. Air Force, which receives advanced fighter jet components, and Lockheed Martin Corporation, the sole contractor. The contract delivers essential airframes and spare parts for the F-22 Raptor, a key asset in U.S. air superiority. Geographic impact is primarily centered around Lockheed Martin's facilities in Marietta, Georgia, and potentially other subcontractors. Workforce implications include employment for skilled engineers, technicians, and manufacturing personnel at Lockheed Martin and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Long contract duration may not reflect current market conditions or technological advancements.
Lack of transparency in the sole-source justification process.
Potential for cost overruns if not closely managed due to lack of competitive pressure.
Dependence on a single contractor for critical defense components.

Positive Signals

Contract awarded to a known entity with extensive experience on the F-22 program.
Firm Fixed Price contract provides budget predictability.
Ensures continued supply of critical components for a strategic defense asset.
Potential for streamlined execution due to established contractor relationship.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on military aircraft manufacturing and sustainment. The market for advanced fighter jet components is highly specialized, with a limited number of prime contractors capable of producing such complex systems. Spending in this area is driven by national security requirements and technological superiority goals. Comparable spending benchmarks would typically involve other major defense aircraft programs, but direct comparisons are often difficult due to unique program specifications and sole-source awards.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions or subcontracting goals for this contract. As a sole-source award to a large prime contractor, the direct impact on small businesses is not immediately clear from this record. However, large defense contracts often involve extensive supply chains where small businesses may participate as subcontractors, though the extent of this participation is not detailed here.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contract management and oversight bodies, such as the Defense Contract Management Agency (DCMA). Accountability measures would be defined within the contract terms, including performance standards and reporting requirements. Transparency may be limited due to the sole-source nature of the award, but contract awards are generally reported in public databases. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

F-22 Raptor Sustainment Program
Advanced Tactical Fighter Programs
Department of Defense Aircraft Procurement
Aerospace Manufacturing Contracts
Lockheed Martin Defense Contracts

Risk Flags

Sole-source award
Lack of competitive benchmarking
Long contract duration
High contract value

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $2.48 billion to LOCKHEED MARTIN CORP. 200104!000019!5700!GU75 !ASC/YFK !F3365700C0020 !A!N!*!N! !20010122!20010228!003268869!003268869!834951691!N!LOCKHEED MARTIN CORPORATION !86 SOUTH COBB DRIVE !MARIETTA !GA!30063!49756!067!13!MARIETTA !COBB !GEORGIA !+000040000000!N!N!000000000000!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !3AFB!F-22 RAPTOR !921190!*!*!1! ! ! !*!*!*!B!*!*!A! !D !N!J!1!001!N!1G!A!N!A! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001!

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $2.48 billion.

What is the period of performance?

Start: 2001-01-22. End: 2018-02-28.

What is the historical spending trend for F-22 Raptor airframes and spares with Lockheed Martin?

Analyzing historical spending trends for F-22 Raptor airframes and spares with Lockheed Martin requires accessing detailed contract modification data and previous award histories beyond this single definitive contract. This specific award represents a significant portion of the program's lifecycle cost. Without access to a comprehensive database of all prior and subsequent contracts, including task orders and modifications, it's challenging to establish a precise trend. However, the substantial value of this contract suggests consistent, high-level investment in the F-22 program over an extended period. Future analysis would benefit from examining annual spending patterns, the number of units procured over time, and any fluctuations in per-unit costs to identify trends and potential cost efficiencies or escalations.

How does the per-unit cost of F-22 airframes compare to similar advanced fighter aircraft programs?

Directly comparing the per-unit cost of F-22 airframes to similar advanced fighter aircraft is complex due to several factors. The F-22 is a fifth-generation stealth fighter, representing a peak in technological sophistication and development cost. Its per-unit cost is inherently higher than less advanced aircraft. Furthermore, this contract is sole-sourced, meaning there's no direct competitive benchmark. Data on the per-unit cost of airframes for programs like the F-35, which has a more competitive international production base, or other advanced platforms, would be needed for a meaningful comparison. However, the F-22's unique capabilities and limited production run have historically placed its overall program cost per aircraft at the higher end of the spectrum.

What are the key performance indicators (KPIs) used to measure Lockheed Martin's performance on this contract?

Key performance indicators (KPIs) for a contract of this nature, particularly for aircraft airframes and spares, typically focus on delivery timeliness, quality control, and adherence to specifications. Specific KPIs might include on-time delivery rates for ordered components, defect rates identified during inspection or testing, compliance with technical data packages, and responsiveness to urgent spare part requests. For a sole-source contract, the government relies heavily on robust quality assurance surveillance plans (QASPs) to monitor performance. While the exact KPIs are defined within the contract's statement of work and performance clauses, they are designed to ensure the government receives high-quality, mission-capable components that meet stringent military standards.

What is the risk assessment associated with relying on a sole-source provider for critical F-22 components?

The primary risk associated with relying on a sole-source provider like Lockheed Martin for critical F-22 components is the lack of competitive pressure, which can lead to higher costs and potentially reduced incentives for innovation or efficiency. There's also a strategic risk: dependence on a single supplier can create vulnerabilities if that supplier faces financial difficulties, production issues, or geopolitical challenges. Furthermore, without competition, the government has less leverage to negotiate favorable terms or drive down prices over the long term. Mitigation strategies often involve strong government oversight, detailed performance metrics, and potentially exploring alternative sourcing options for non-critical components or future programs.

How has the total obligated amount for F-22 program contracts evolved over time?

The total obligated amount for the F-22 program has evolved significantly since its inception. Initial development and low-rate initial production phases incurred substantial costs. As production ramped up, contract values increased accordingly. This specific $2.48 billion contract represents a major award within the program's lifecycle, likely covering a significant block of airframes and spares over an extended period. To understand the full evolution, one would need to aggregate data from all contracts awarded for the F-22 program, including R&D, production, sustainment, and modifications, across different fiscal years. This would reveal a pattern of substantial, long-term investment driven by the strategic importance and complexity of the F-22.

Industry Classification

NAICS: Public Administration › Executive, Legislative, and Other General Government Support › Other General Government Support

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 86 SOUTH COBB DRIVE, MARIETTA, GA, 30063

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $34,287,975

Exercised Options: $34,287,975

Current Obligation: $2,479,351,307

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline