DoD awards $25.1M for KC-10 engines, with Lockheed Martin securing the contract

Contract Overview

Contract Amount: $25,176,187 ($25.2M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2021-10-18

End Date: 2023-07-31

Contract Duration: 651 days

Daily Burn Rate: $38.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: KC-10 ENGINES

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76108

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $25.2 million to LOCKHEED MARTIN CORPORATION for work described as: KC-10 ENGINES Key points: 1. Value for money assessed against comparable engine maintenance contracts. 2. Competition dynamics indicate a robust bidding process for this critical aircraft component. 3. Risk indicators include potential supply chain disruptions for specialized engine parts. 4. Performance context tied to ensuring operational readiness of the KC-10 fleet. 5. Sector positioning within the broader aerospace and defense manufacturing industry.

Value Assessment

Rating: good

The contract value of $25.1 million for KC-10 engines appears reasonable when benchmarked against similar sustainment contracts for large military aircraft. While specific per-unit costs are not detailed, the firm-fixed-price structure suggests a degree of cost certainty for the government. Further analysis would involve comparing the scope of work and the specific engine models covered against other defense contracts for aircraft engine components to ensure optimal value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple qualified bidders had the opportunity to submit proposals. The presence of a competitive bidding process is generally favorable for price discovery and ensuring the government receives competitive pricing. The specific number of bidders is not provided, but the 'full and open' designation implies a market capable of supporting multiple interested parties for this type of defense procurement.

Taxpayer Impact: Full and open competition helps ensure taxpayer dollars are used efficiently by driving down prices through market forces. It provides assurance that the selected contractor offers the best value, rather than being the only option available.

Public Impact

The U.S. Air Force's KC-10 Extender fleet benefits from this contract, ensuring continued operational capability. Services delivered include the provision and maintenance of critical engine components for the aircraft. Geographic impact is national, supporting a key asset for global military logistics and refueling operations. Workforce implications include supporting skilled labor within the aerospace manufacturing and maintenance sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for extended lead times on specialized engine parts impacting delivery schedules.
Reliance on a single prime contractor for critical component sustainment could pose future risks.
Ensuring long-term availability of parts for an aging aircraft fleet.

Positive Signals

Firm-fixed-price contract provides cost predictability for the government.
Awarded through full and open competition, indicating a healthy market.
Contract supports the sustainment of a vital strategic asset for the U.S. Air Force.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts and auxiliary equipment. The market for military aircraft engine components is specialized, often dominated by original equipment manufacturers and their authorized service providers. Spending in this area is driven by the need to maintain the operational readiness of aging fleets, with significant government investment allocated to sustainment and modernization efforts.

Small Business Impact

While this contract was awarded to Lockheed Martin Corporation, a large prime contractor, the extent of small business participation through subcontracting is not detailed. Analysis of subcontracting plans would be necessary to determine the impact on the small business ecosystem. Typically, large defense contracts offer opportunities for small businesses to supply components or services, contributing to their growth and the overall defense industrial base.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The firm-fixed-price nature of the contract provides a degree of accountability for cost control. Transparency is generally maintained through contract award databases, though detailed performance metrics may not always be publicly available. Inspector General jurisdiction would apply in cases of fraud or significant mismanagement.

Related Government Programs

KC-10 Sustainment Programs
Military Aircraft Engine Maintenance
Aerospace Component Manufacturing
Defense Logistics Support Contracts

Risk Flags

Potential supply chain vulnerabilities for specialized components.
Aging aircraft fleet may require more frequent and costly maintenance.
Reliance on a limited number of suppliers for critical parts.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.2 million to LOCKHEED MARTIN CORPORATION. KC-10 ENGINES

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $25.2 million.

What is the period of performance?

Start: 2021-10-18. End: 2023-07-31.

What is the historical spending trend for KC-10 engine components over the last five years?

Historical spending data for KC-10 engine components reveals a consistent need for sustainment and part replacement, reflecting the aging nature of the fleet. While specific figures for this contract total $25.1 million, broader trends indicate annual expenditures that fluctuate based on maintenance cycles, part availability, and any unforeseen operational demands. For instance, spending might increase in years following major inspections or when specific component lifespans are nearing their end. Benchmarking this award against previous years' spending on similar engine parts would provide context on whether this represents an increase, decrease, or stable level of investment in KC-10 engine sustainment.

How does the pricing of these KC-10 engines compare to similar commercial aircraft engine contracts?

Direct comparison of KC-10 engine pricing to commercial aircraft engine contracts is challenging due to significant differences in operational environments, required performance specifications, and regulatory oversight. Military engines often operate under more extreme conditions and require higher reliability and durability, leading to potentially higher unit costs. Furthermore, the scale of commercial fleet operations can sometimes lead to economies of scale in parts and maintenance that are not mirrored in specialized military programs. However, a general benchmark suggests that military-grade components and services tend to be more expensive due to stringent quality control, specialized materials, and lower production volumes compared to their commercial counterparts.

What are the primary risks associated with the supply chain for these specific KC-10 engine parts?

The primary risks associated with the supply chain for KC-10 engine parts often stem from the specialized nature of the components and the limited number of manufacturers capable of producing them. Many parts may be sourced from sole- or single-source suppliers, increasing vulnerability to disruptions. The aging fleet also means that some parts may be out of production, requiring specialized remanufacturing or reliance on legacy inventory, which can be costly and subject to availability issues. Geopolitical factors, trade restrictions, and the financial stability of key suppliers can also pose significant risks. The Department of Defense actively monitors these risks through supply chain management initiatives and by encouraging diversification where feasible.

What is the track record of Lockheed Martin Corporation in fulfilling similar engine sustainment contracts for the DoD?

Lockheed Martin Corporation has a long-standing and extensive track record in supporting U.S. military aviation programs, including engine sustainment. As a major defense contractor, they have managed numerous complex contracts involving aircraft maintenance, component manufacturing, and integrated logistics support across various platforms. Their experience with the C-130, F-16, and other aircraft families provides a strong foundation for managing engine-related requirements. While specific performance metrics for every contract are not always public, Lockheed Martin is generally recognized for its capabilities in delivering on large-scale defense sustainment efforts, though like any large contractor, they may encounter specific challenges on individual programs.

How does the performance of the KC-10 fleet impact the need for these engine services?

The performance and operational tempo of the KC-10 fleet directly dictate the demand for engine services and parts. The KC-10 Extender is a critical asset for aerial refueling and strategic airlift, often deployed globally. High operational tempo, frequent deployments, and demanding mission profiles place significant stress on aircraft engines, leading to increased wear and tear. Consequently, the need for routine maintenance, component replacements, and engine overhauls is directly correlated with how heavily the fleet is utilized. Any degradation in engine performance or an increase in unscheduled maintenance events would necessitate more frequent and potentially costly interventions, underscoring the importance of robust sustainment contracts like this one.

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

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: $25,176,187

Exercised Options: $25,176,187

Current Obligation: $25,176,187

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA810517D0002

IDV Type: IDC

Timeline