Lockheed Martin awarded $196M for missile aircraft accessories and components, with a significant portion for sustainment

Contract Overview

Contract Amount: $1,297,523,639 ($1.3B)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2006-06-01

End Date: 2017-05-31

Contract Duration: 4,017 days

Daily Burn Rate: $323.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200608!003456!2100!W58RGZ!USA AVIATION AND MISSILE COMMAND!W58RGZ06C0169 !A!N! !N! ! !20060601!20101231!196189385!196189385!834951691!N!LOCKHEED MARTIN CORPORATION !5600 WEST SAND LAKE ROAD !ORLANDO !FL!32819!53000!095!12!ORLANDO !ORANGE !FLORIDA !+000070731444!Y!N!000000000000!1680!MSL AIRCRAFT ACCESSORIES AND COMPONENTS !A1A!AIRFRAMES AND SPARES !000 !NOT DISCERNABLE !336411!E! !1! ! ! ! ! !99990909!B! ! !A! !D!N!J!1!001!N!1A!Z!Y!F! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32819

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $1.30 billion to LOCKHEED MARTIN CORPORATION for work described as: 200608!003456!2100!W58RGZ!USA AVIATION AND MISSILE COMMAND!W58RGZ06C0169 !A!N! !N! ! !20060601!20101231!196189385!196189385!834951691!N!LOCKHEED MARTIN CORPORATION !5600 WEST SAND LAKE ROAD !ORLANDO !FL!32819!53000!095!12!ORLANDO !ORAN… Key points: 1. Contract awarded for sustainment of critical missile aircraft components. 2. Long-term contract indicates a need for ongoing support and maintenance. 3. Sole-source award raises questions about competition and potential cost savings. 4. Contract duration of over 10 years suggests a strategic, long-term partnership. 5. Focus on airframes and spares highlights the importance of readiness for aviation assets.

Value Assessment

Rating: fair

The total value of this contract is $196,189,385. Without specific benchmarks for missile aircraft accessories and components, it's difficult to definitively assess value for money. However, the long duration and sole-source nature suggest potential for higher costs than a competitively bid contract. Further analysis would require comparison with similar sustainment contracts for comparable platforms.

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 a specific capability or product is only available from a single source, or in cases of urgent need. The lack of competition means there was no opportunity for price discovery through a bidding process, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without multiple offers, the government could not leverage market forces to secure the best possible price for these essential aircraft components.

Public Impact

The U.S. Army benefits from the continued availability and maintenance of critical missile aircraft accessories and components. This contract ensures the operational readiness of aviation assets vital for national defense. The services delivered are essential for the sustainment of complex military hardware. The primary geographic impact is within the Department of Defense's aviation maintenance and operational infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
Long contract duration may not reflect evolving market prices.
Lack of transparency in sole-source justification requires scrutiny.

Positive Signals

Contract ensures sustainment of critical defense assets.
Long-term award provides stability for essential component support.
Lockheed Martin is a known entity with established expertise in this area.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft manufacturing and component sustainment. The market for such specialized components is often dominated by a few large prime contractors due to the high barriers to entry, including intellectual property, specialized manufacturing capabilities, and extensive testing requirements. Spending in this area is critical for maintaining the readiness of military aviation fleets.

Small Business Impact

There is no indication of a small business set-aside for this contract. Given the sole-source nature and the specialized components involved, it is unlikely that significant subcontracting opportunities for small businesses would be mandated or readily available, unless specified by the prime contractor. This contract does not appear to directly support the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army and the Department of Defense. Accountability measures would be tied to contract performance clauses and delivery schedules. Transparency is limited due to the sole-source award, but contract modifications and payment reports would likely be subject to standard government auditing and oversight processes, potentially including Inspector General reviews.

Related Government Programs

Missile Systems
Aircraft Components
Aviation Sustainment
Defense Logistics
Aerospace Manufacturing

Risk Flags

Sole-source award limits price competition.
Long contract duration may not reflect evolving market prices.
Lack of transparency in sole-source justification requires scrutiny.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $1.30 billion to LOCKHEED MARTIN CORPORATION. 200608!003456!2100!W58RGZ!USA AVIATION AND MISSILE COMMAND!W58RGZ06C0169 !A!N! !N! ! !20060601!20101231!196189385!196189385!834951691!N!LOCKHEED MARTIN CORPORATION !5600 WEST SAND LAKE ROAD !ORLANDO !FL!32819!53000!095!12!ORLANDO !ORANGE !FLORIDA !+000070731444!Y!N!000000000000!1680!MSL AIRCRAFT ACCESSORIES AND COMPONENTS !A1A!AIRFRAMES AND SPARES !000 !NOT DISCERNABLE !336411!E! !1! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $1.30 billion.

What is the period of performance?

Start: 2006-06-01. End: 2017-05-31.

What is the historical spending trend for missile aircraft accessories and components by the Department of the Army?

Analyzing historical spending trends for missile aircraft accessories and components by the Department of the Army requires access to comprehensive historical contract data. While this specific contract is for $196 million over approximately 11 years, broader trends would involve aggregating data across multiple contracts, fiscal years, and potentially different service branches. Factors influencing these trends include modernization programs, operational tempo, geopolitical events, and budget allocations. Without a broader dataset, it's challenging to establish a definitive trend, but sustained spending in this category typically reflects the ongoing need to maintain and upgrade aging aviation fleets and ensure the readiness of critical defense systems.

What specific missile aircraft accessories and components are covered under this contract?

The contract specifies the Product Service Code (PSC) as '1680', which corresponds to 'MSL AIRCRAFT ACCESSORIES AND COMPONENTS'. The North American Industry Classification System (NAICS) code is '336411' for 'Aircraft Manufacturing'. While the contract title indicates 'Missile Aircraft Accessories and Components', the specific list of parts, their quantities, and technical specifications are typically detailed in the contract's Statement of Work (SOW) or Performance Work Statement (PWS). These documents, often considered proprietary or sensitive, would outline the exact nature of the components, which could range from structural parts and engine accessories to specialized electronic or guidance system components integral to missile-equipped aircraft.

What is Lockheed Martin's track record with similar sole-source contracts for defense components?

Lockheed Martin Corporation, as a major defense contractor, has a long history of securing both competitive and sole-source contracts across various defense platforms. Their track record with sole-source awards is extensive, often stemming from their role as the original equipment manufacturer (OEM) or having unique capabilities for specific systems. While this provides a level of assurance regarding their technical expertise and production capacity, sole-source awards inherently lack the price competition found in open bidding. Government oversight bodies and the Department of Defense often scrutinize sole-source justifications to ensure they are appropriate and that pricing remains fair and reasonable, even without direct competition. Lockheed Martin's performance on such contracts is generally evaluated based on delivery, quality, and adherence to contract terms.

How does the duration of this contract (over 10 years) impact its value proposition?

The extended duration of this contract, spanning from June 1, 2006, to May 31, 2017 (approximately 11 years), suggests a long-term sustainment requirement for critical missile aircraft accessories and components. For the government, such long-term agreements can offer stability in supply and potentially lock in pricing, although the absence of competition in this sole-source award means the 'locked-in' price might not be the most advantageous. From a contractor's perspective, it provides a predictable revenue stream and allows for long-term planning of resources and production. However, the value proposition is diminished by the lack of competitive pressure, which typically drives down costs over time. A more frequent review or competitive re-bidding process might yield better value for taxpayers.

Are there any performance risks associated with this sole-source contract for aircraft components?

Performance risks for this sole-source contract are primarily related to the contractor's ability to consistently deliver high-quality components on time and within budget, as well as the government's ability to effectively manage the contract. Since it's a sole-source award, the government has less leverage to drive down costs if performance issues arise or if pricing escalates beyond initial expectations. Key risks include potential production delays, quality control failures, obsolescence of components over the long contract term, and the contractor potentially prioritizing more competitive contracts. Effective government oversight, including rigorous quality assurance and performance monitoring, is crucial to mitigate these risks.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft 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: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 5600 WEST SAND LAKE ROAD, ORLANDO, FL, 32819

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline