Broken Fleet: Lockheed Gets $1.3B No-Bid Contract for 30% Readiness Rate

On April 28, 2023, the Department of Defense (DOD) finalized contract N0001923C0003, a $1.3 billion agreement awarded to Lockheed Martin Corporation for F-35 sustainment services. This agreement was not the result of a competitive process. Instead, the Pentagon invoked Federal Acquisition Regulation (FAR) 6.302-1, a 'sole-source' justification claiming Lockheed Martin is the 'only responsible source' capable of fulfilling the requirements. This decision effectively hand-delivered $1.3 billion in taxpayer funds to a single corporation without requiring them to beat a competitor’s price or performance.

[Sole-Source Justification] is a legal exception in government contracting that allows the Department of Defense to skip the competitive bidding process when only one company can provide the required goods or services.

While the money flows freely, the hardware does not. According to report GAO-23-105341 from the Government Accountability Office, the F-35 fleet’s 'full mission-capable rate'—the ability to perform all assigned duties—was approximately 30% as of March 2023. This means that at any given moment, 7 out of every 10 F-35 aircraft are statistically grounded. Despite these performance metrics, the Joint Program Office (JPO) authorized the billion-dollar sustainment package to the very company responsible for the aircraft's maintenance.

[Mission-Capable Rate] is the percentage of time a military aircraft can perform at least one of its assigned missions, a primary metric for hardware effectiveness.

The logic behind the no-bid contract is a self-inflicted legal trap. During the early phases of the F-35 program, the DOD allowed Lockheed Martin to retain proprietary control over the technical data and software code required to repair the aircraft. Because the government does not own the 'blueprints' for the planes it purchased, it cannot legally hire a third-party contractor or even perform complex repairs itself. This has resulted in a permanent state of 'vendor lock.'

[Vendor Lock] is a situation where a buyer becomes dependent on a single provider for products and services because they cannot switch to another vendor without substantial costs or legal barriers.

The financial loop extends beyond the Pentagon to the halls of Congress. According to OpenSecrets data and FEC filings, Lockheed Martin’s Political Action Committee (PAC) and its employees have contributed a combined $12.4 million to the 50 members of the House Armed Services Committee (HASC) during the relevant election cycles. This committee is responsible for authorizing the Pentagon's annual budget and overseeing the F-35 program. When performance fails, the money trail suggests that political contributions provide a safety net that competition cannot.

Mainstream coverage frequently describes the F-35 as an 'indispensable asset' in the Pacific theater, often framing maintenance delays as temporary 'teething problems' of a high-tech platform. What these reports omit is the structural nature of the failure: the DOD is paying a premium for a fleet that is 70% non-functional because it legally signed away the right to seek a better deal. The total projected life-cycle cost for the F-35 has now reached $1.7 trillion, with $1.3 trillion of that dedicated solely to maintenance and operations.

For the average taxpayer, this represents a direct transfer of public wealth into a private monopoly with no accountability for performance. Every billion dollars spent on a non-competitive contract for grounded aircraft is a billion dollars unavailable for national infrastructure or debt relief. As the DOD continues to invoke FAR 6.302-1 to expedite end-of-year spending, the 'only responsible source' remains the one with the most lobbyists on the payroll.

To see how your representative voted on the latest defense authorization or to track Lockheed Martin's specific contributions to the House Armed Services Committee, explore the Gen Us Politician Tracker and our Corporate Influence database.