DoD's $773.8M Aircraft Manufacturing Contract with Lockheed Martin Raises Oversight Questions
Contract Overview
Contract Amount: $773,800,076 ($773.8M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2011-06-16
End Date: 2020-04-30
Contract Duration: 3,241 days
Daily Burn Rate: $238.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: TT&E
Place of Performance
Location: ORLANDO, ORANGE County, FLORIDA, 32819
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $773.8 million to LOCKHEED MARTIN CORPORATION for work described as: TT&E Key points: 1. Significant spending on aircraft manufacturing, with a large portion potentially uncompeted. 2. Lockheed Martin is the sole awardee, raising concerns about competition and pricing. 3. The contract spans nearly a decade, indicating long-term reliance and potential for cost escalation. 4. The 'Aircraft Manufacturing' sector is critical for defense, but transparency in this award is limited.
Value Assessment
Rating: questionable
The contract value of $773.8M is substantial. Without competitive bidding, it's difficult to assess if this price reflects fair market value compared to similar aircraft manufacturing contracts.
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 as there was no market pressure to offer the best price.
Taxpayer Impact: The lack of competition on this large contract likely results in a higher cost to taxpayers than if it had been competitively bid.
Public Impact
Taxpayers may be overpaying for aircraft due to the absence of competitive bidding. The long duration of the contract raises concerns about ongoing costs and potential for scope creep. Lack of transparency in the procurement process hinders public understanding of defense spending.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- High contract value
- Long contract duration
Positive Signals
- Firm Fixed Price contract type can offer cost certainty if negotiated well.
Sector Analysis
This contract falls within the critical Aircraft Manufacturing sector for the Department of Defense. Benchmarks for similar large-scale, sole-source aircraft manufacturing contracts are often opaque, making direct comparison difficult.
Small Business Impact
There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. This represents a missed opportunity for small business participation in a significant defense award.
Oversight & Accountability
The sole-source nature of this contract warrants increased oversight to ensure the government is receiving the best possible value and that the contractor is meeting all performance requirements.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Lack of competitive bidding
- Potential for inflated pricing
- Limited transparency
- Long contract duration
- No small business participation indicated
Tags
aircraft-manufacturing, department-of-defense, fl, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $773.8 million to LOCKHEED MARTIN CORPORATION. TT&E
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 $773.8 million.
What is the period of performance?
Start: 2011-06-16. End: 2020-04-30.
What specific justification was provided for awarding this contract on a sole-source basis, and how was the price determined to be fair and reasonable?
The justification for a sole-source award typically involves factors like unique capabilities, urgent need, or lack of viable alternatives. Without access to the contract's justification documentation, it's impossible to detail the specific reasons. Price reasonableness is usually assessed through cost analysis, market research, or comparison to previous contracts, but the effectiveness of this process is diminished without competition.
What are the potential risks associated with a decade-long, sole-source contract for aircraft manufacturing, particularly regarding technological obsolescence and cost overruns?
A long-term sole-source contract risks technological obsolescence if the awarded technology becomes outdated during the contract's life. Cost overruns are also a significant risk, as the lack of competition removes the incentive for the contractor to find efficiencies or offer lower prices. The government may be locked into paying inflated prices without recourse.
How effectively does the Department of Defense ensure value for money and accountability in large, non-competed contracts like this one?
Ensuring value and accountability in non-competed contracts relies heavily on robust internal oversight, stringent negotiation tactics, and detailed performance monitoring. Agencies must conduct thorough price and cost analyses, validate contractor claims, and maintain clear communication channels. However, the inherent lack of competitive pressure means these measures must be exceptionally rigorous to compensate.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: METALWORKING MACHINERY
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 W SAND LAKE RD # MP-265, ORLANDO, FL, 32819
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $813,313,663
Exercised Options: $773,800,076
Current Obligation: $773,800,076
Subaward Activity
Number of Subawards: 3
Total Subaward Amount: $136,880
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2011-06-16
Current End Date: 2020-04-30
Potential End Date: 2020-04-30 12:04:00
Last Modified: 2022-11-09
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