DoD Awards $40.4M for KC-10 Engine Contractor Logistics Support to Lockheed Martin
Contract Overview
Contract Amount: $40,416,040 ($40.4M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2019-04-01
End Date: 2021-12-28
Contract Duration: 1,002 days
Daily Burn Rate: $40.3K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: KC-10 ENGINE CONTRACTOR LOGISTICS SUPPORT
Place of Performance
Location: FORT WORTH, TARRANT County, TEXAS, 76108
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $40.4 million to LOCKHEED MARTIN CORPORATION for work described as: KC-10 ENGINE CONTRACTOR LOGISTICS SUPPORT Key points: 1. Significant contract value for specialized aircraft support. 2. Lockheed Martin is a major defense contractor, indicating potential market concentration. 3. Risk of sole-source reliance for unique aircraft parts. 4. Spending falls within the 'Other Aircraft Parts' manufacturing sector.
Value Assessment
Rating: good
The contract value of $40.4M over approximately 3 years appears reasonable for specialized contractor logistics support for a major aircraft platform like the KC-10. Benchmarking against similar long-term sustainment contracts for aging aircraft would provide further context.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process that should have driven price discovery. The award type is a delivery order against a larger contract vehicle.
Taxpayer Impact: Full and open competition generally leads to better value for taxpayers by fostering a competitive environment.
Public Impact
Ensures continued operational readiness of the KC-10 fleet. Supports critical logistics and maintenance for a vital military asset. Impacts the aerospace and defense manufacturing sector through sustained demand.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for future sole-source modifications if competition is not maintained.
- Dependence on a single contractor for critical parts could lead to price increases.
Positive Signals
- Awarded through full and open competition.
- Supports a critical national defense asset.
- Firm fixed price contract provides cost certainty.
Sector Analysis
This contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector. Spending in this area is crucial for maintaining aging military fleets and ensuring operational readiness. Benchmarks for similar sustainment contracts are often high due to specialized nature and limited competition.
Small Business Impact
The data indicates the awardee is Lockheed Martin Corporation, a large prime contractor. There is no specific information provided regarding small business participation in this particular delivery order, but prime contractors are often required to subcontract portions to small businesses.
Oversight & Accountability
The Department of the Air Force, under the Department of Defense, is responsible for overseeing this contract. Oversight would focus on ensuring timely delivery, adherence to specifications, and proper cost management throughout the contract period.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Potential for price creep on follow-on contracts.
- Dependence on specific technical expertise held by the contractor.
- Aging aircraft platform may require increasingly specialized and costly support.
- Limited visibility into contractor's internal cost structure.
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, tx, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $40.4 million to LOCKHEED MARTIN CORPORATION. KC-10 ENGINE CONTRACTOR LOGISTICS SUPPORT
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 Air Force).
What is the total obligated amount?
The obligated amount is $40.4 million.
What is the period of performance?
Start: 2019-04-01. End: 2021-12-28.
What is the total lifecycle cost of supporting the KC-10 fleet, and how does this contract contribute to it?
The total lifecycle cost for the KC-10 fleet's support is substantial, encompassing maintenance, spare parts, and contractor logistics. This $40.4M contract represents a significant portion of that cost for the specified period. Understanding the full lifecycle cost is crucial for long-term budget planning and identifying potential efficiencies or areas for cost reduction in future sustainment strategies.
What are the risks associated with relying on a single contractor for specialized aircraft parts and support?
Relying on a single contractor, even if initially awarded competitively, carries risks such as potential price escalation over time, reduced incentive for innovation, and vulnerability to supply chain disruptions if the contractor faces issues. It can also limit the government's ability to leverage alternative solutions or technologies that may emerge.
How effectively does the firm fixed price contract structure ensure value for taxpayer money in this context?
A firm fixed price contract is generally effective in ensuring value by shifting cost overrun risk to the contractor. For this KC-10 support, it provides budget certainty for the government. However, the contractor must accurately estimate costs upfront; if their estimates are too low, they may cut corners, impacting quality, or if too high, taxpayers may overpay.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: 1 LOCKHEED BLVD BLDG 10, FORT WORTH, TX, 76108
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $40,416,040
Exercised Options: $40,416,040
Current Obligation: $40,416,040
Actual Outlays: $77,514
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $-24,396
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA810517D0002
IDV Type: IDC
Timeline
Start Date: 2019-04-01
Current End Date: 2021-12-28
Potential End Date: 2021-12-28 00:00:00
Last Modified: 2021-03-22
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