DoD Awards $1.92 Billion Aircraft Manufacturing Contract to Lockheed Martin
Contract Overview
Contract Amount: $1,924,919,562 ($1.9B)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 1999-12-30
End Date: 2010-03-09
Contract Duration: 3,722 days
Daily Burn Rate: $517.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Place of Performance
Location: FORT WORTH, TARRANT County, TEXAS, 76108
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $1.92 billion to LOCKHEED MARTIN CORP for work described as: Key points: 1. Significant contract value highlights major defense spending. 2. Sole-source award raises questions about competition and potential cost savings. 3. Long contract duration (1999-2010) suggests a substantial, ongoing program. 4. Firm Fixed Price contract type aims to control costs, but initial award method is key.
Value Assessment
Rating: questionable
The contract value of $1.92 billion is substantial. Without comparable contracts or detailed cost breakdowns, assessing its value is difficult. The firm fixed price structure is a positive cost control measure, but the lack of competition at award is a significant concern.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive process. The rationale for sole-sourcing is not provided.
Taxpayer Impact: The lack of competition likely resulted in a higher price than could have been achieved through a competitive bidding process, impacting taxpayer funds.
Public Impact
Taxpayers may have overpaid due to the absence of competitive bidding. The long-term nature of the contract suggests a critical, ongoing need for these aircraft. The specific aircraft type and its role in national defense are not detailed, limiting public understanding.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- High contract value
- Long contract duration
- Sole-source award
Positive Signals
- Firm Fixed Price contract type
Sector Analysis
This contract falls within the Defense sector, specifically aircraft manufacturing. Defense spending on major platforms like aircraft can represent a significant portion of the federal budget, with benchmarks varying based on geopolitical factors and technological advancements.
Small Business Impact
There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. The focus appears to be on a large, established defense contractor.
Oversight & Accountability
The contract's long duration and sole-source nature warrant close oversight to ensure continued value and prevent cost overruns. Transparency regarding the justification for sole-sourcing and performance metrics would enhance accountability.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competitive bidding may have led to inflated costs.
- Sole-source award raises concerns about market competition and innovation.
- Extended contract duration increases the risk of cost escalation or scope creep.
- Absence of small business participation limits broader economic impact.
Tags
aircraft-manufacturing, department-of-defense, tx, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.92 billion to LOCKHEED MARTIN CORP. See the official description on USAspending.
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 $1.92 billion.
What is the period of performance?
Start: 1999-12-30. End: 2010-03-09.
What was the specific justification for awarding this contract on a sole-source basis, and what analysis was performed to ensure fair and reasonable pricing?
The justification for a sole-source award is critical for understanding the value proposition. Typically, sole-sourcing is reserved for situations where only one responsible source can provide the required supplies or services. Without this justification, it's difficult to assess if the government received the best possible price and terms, or if taxpayer funds were used efficiently.
How did the firm fixed price structure mitigate risks associated with a sole-source award over the contract's extended duration?
A firm fixed price (FFP) contract is designed to provide price certainty for both the government and the contractor. In this sole-source scenario, the FFP structure aimed to cap the government's financial liability, shifting most of the cost risk to Lockheed Martin. However, the initial price negotiated under sole-source conditions remains a key factor in overall value.
What performance metrics and delivery schedules were established to ensure the effectiveness and timely delivery of the aircraft under this long-term contract?
Effective oversight of long-term, sole-source contracts requires robust performance metrics and strict adherence to delivery schedules. These measures ensure the contractor meets quality standards and fulfills its obligations. Regular reviews and audits would be necessary to track progress and address any deviations promptly, safeguarding the investment.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
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
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 1999-12-30
Current End Date: 2010-03-09
Potential End Date: 2010-03-09 00:00:00
Last Modified: 2022-08-24
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