DoD awards $48M for KC-10 engines, with Lockheed Martin as prime contractor

Contract Overview

Contract Amount: $48,090,266 ($48.1M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2022-01-01

End Date: 2023-12-31

Contract Duration: 729 days

Daily Burn Rate: $66.0K/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 $48.1 million to LOCKHEED MARTIN CORPORATION for work described as: KC-10 ENGINES Key points: 1. Contract value represents a significant investment in maintaining aging aerial refueling capabilities. 2. Sole-source nature of the award warrants scrutiny of pricing and justification. 3. Performance period of two years suggests a focus on immediate operational needs. 4. The contract falls within the broader category of aircraft parts manufacturing. 5. Geographic location in Texas may indicate a concentration of relevant aerospace industry activity.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without specific performance metrics or comparable sole-source awards for KC-10 engines. The firm-fixed-price structure aims to control costs, but the absence of competition limits the ability to assess if the price reflects optimal market value. Further analysis would require understanding the specific engine model, its lifecycle costs, and any unique technological requirements that might justify a sole-source procurement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor, Lockheed Martin Corporation, was solicited. This approach is typically used when only one source is capable of meeting the agency's needs, often due to proprietary technology, unique capabilities, or urgent requirements. The lack of competition means that price discovery through market forces was bypassed, potentially leading to higher costs for the government compared to a competed contract.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive bidding, as the government could not leverage multiple offers to secure the best possible price.

Public Impact

The primary beneficiaries are the U.S. Air Force units operating the KC-10 Extender aircraft, ensuring continued operational readiness. The contract delivers essential engine components and related services critical for maintaining the KC-10 fleet's air refueling capabilities. The geographic impact is primarily centered in Texas, where the contractor is located, potentially supporting local aerospace jobs. Workforce implications include the need for specialized technicians and engineers at Lockheed Martin to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Aging KC-10 fleet may incur higher maintenance costs over time.
Dependence on a single contractor for critical engine components.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Contract supports a critical national defense asset (KC-10).

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft parts and maintenance. The market for specialized aircraft components, particularly for legacy platforms like the KC-10, can be concentrated among a few key manufacturers. Spending on such components is crucial for maintaining the operational readiness of military fleets, representing a significant portion of defense budgets. Comparable spending benchmarks would involve analyzing other engine procurement or maintenance contracts for similar military aircraft.

Small Business Impact

The contract data indicates that small business participation was not a primary consideration, as the award was sole-source and the prime contractor is a large corporation. There is no explicit mention of small business set-asides or subcontracting plans. This suggests that opportunities for small businesses within this specific procurement are likely limited, unless they are direct suppliers to Lockheed Martin.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor compliance with terms and conditions. Accountability measures are embedded in the firm-fixed-price structure, which obligates the contractor to deliver specified goods within the agreed-upon price. Transparency is limited due to the sole-source nature of the award, but contract award data is publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

KC-10 Extender Sustainment Programs
Air Mobility Command Aircraft Maintenance
Defense Logistics Agency Aviation Support

Risk Flags

Sole-source award may limit cost savings.
Aging aircraft platform may incur higher maintenance costs.
Dependence on a single supplier for critical components.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $48.1 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 $48.1 million.

What is the period of performance?

Start: 2022-01-01. End: 2023-12-31.

What is the specific engine model being procured for the KC-10, and what is its operational history?

The specific engine model for the KC-10 Extender is the General Electric CF6-50. These turbofan engines have powered the KC-10 fleet since its introduction in the early 1980s. The CF6-50 is a well-established and reliable engine, but as the KC-10 fleet ages, the demand for replacement parts and specialized maintenance increases. The operational history of the CF6-50 is extensive, with millions of flight hours accumulated across various military and civilian applications, underscoring its proven performance. However, the age of the platform necessitates ongoing investment in sustainment to ensure continued availability and mission capability.

Why was this contract awarded on a sole-source basis instead of through full and open competition?

The contract was awarded on a sole-source basis likely due to the specialized nature of KC-10 engine components and the limited number of entities capable of manufacturing or supplying them. Lockheed Martin Corporation, as the prime contractor, may possess unique technical data, proprietary manufacturing processes, or existing infrastructure directly related to the KC-10's specific engine requirements. In such cases, the government may determine that soliciting bids from multiple sources is not feasible or cost-effective, especially if only one contractor can meet the technical specifications or delivery timelines without significant delays or additional development costs. This justification is crucial for sole-source awards to ensure they are used appropriately.

How does the $48 million contract value compare to historical spending on KC-10 engines?

Comparing the $48 million contract value to historical spending on KC-10 engines requires a review of past contract awards for similar engine components and services. Annual spending on KC-10 sustainment can fluctuate significantly based on maintenance cycles, component failures, and inventory needs. While $48 million represents a substantial single award, it needs to be contextualized within the overall lifecycle costs of the KC-10 fleet, which spans decades. Historical data would reveal if this award is within the expected range for engine procurements or if it indicates a potential increase in costs due to factors like inflation, supply chain issues, or the increasing age of the aircraft and its components.

What are the key performance indicators (KPIs) associated with this contract, and how will performance be measured?

While the provided data does not explicitly list Key Performance Indicators (KPIs) for this specific contract, typical performance measures for aircraft engine component procurements include on-time delivery of parts, adherence to quality specifications, and compliance with technical requirements. The firm-fixed-price nature of the contract implies that the contractor is obligated to deliver the specified engine parts within the agreed-upon budget and timeframe. Performance monitoring would likely involve inspections, acceptance testing of delivered components, and tracking delivery schedules. The Defense Contract Management Agency (DCMA) would oversee these aspects to ensure the government receives the contracted goods as specified.

What is the expected lifespan of the KC-10 fleet, and how does this contract contribute to its continued operation?

The KC-10 Extender fleet has been in service since the 1980s, and its expected lifespan is a subject of ongoing planning within the U.S. Air Force. While specific retirement dates can shift based on budget allocations and the introduction of new capabilities, the fleet is generally expected to operate for several more years. This $48 million contract for engines directly contributes to the continued operation and sustainment of the KC-10 by ensuring the availability of critical propulsion components. By procuring these engines, the Air Force aims to maintain the airworthiness and operational readiness of the KC-10 fleet, allowing it to continue its vital aerial refueling mission.

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: $48,090,266

Exercised Options: $48,090,266

Current Obligation: $48,090,266

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA810517D0002

IDV Type: IDC

Timeline