Lockheed Martin awarded $17M for KC-10 Engine Component Lifecycle Support, with delivery orders extending through July 2024

Contract Overview

Contract Amount: $17,009,082 ($17.0M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2023-01-01

End Date: 2024-07-31

Contract Duration: 577 days

Daily Burn Rate: $29.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: KC-10 ENGINE CLS

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76108

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $17.0 million to LOCKHEED MARTIN CORPORATION for work described as: KC-10 ENGINE CLS Key points: 1. Value for money assessed through firm-fixed-price contract type, aiming to control costs. 2. Competition dynamics indicate a full and open approach, potentially driving competitive pricing. 3. Risk indicators include contract duration and reliance on a single manufacturer for specialized parts. 4. Performance context is tied to sustaining critical KC-10 aircraft operational readiness. 5. Sector positioning within defense aerospace manufacturing, specifically aircraft parts.

Value Assessment

Rating: good

The contract value of $17.01 million for KC-10 engine component lifecycle support appears reasonable given the specialized nature of aerospace components and the firm-fixed-price structure. Benchmarking against similar sustainment contracts for large military aircraft suggests this is within expected ranges. The contract's duration and the specific components covered will be key factors in a more granular value assessment. However, the absence of detailed cost breakdowns makes a precise value-for-money determination challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The specific number of bidders is not provided, but this procurement method generally fosters a competitive environment, which can lead to better pricing and innovation. The agency's decision to use full and open competition implies confidence in the market's ability to provide the required services and parts.

Taxpayer Impact: Taxpayers benefit from a competitive process that is designed to secure the best possible pricing and terms for the government, maximizing the value of public funds allocated to defense sustainment.

Public Impact

The primary beneficiaries are the U.S. Air Force units operating the KC-10 Extender aircraft, ensuring their continued operational capability. Services delivered include lifecycle support for critical engine components, encompassing maintenance, repair, and potentially spare parts. The geographic impact is national, supporting a key strategic asset for global reach and aerial refueling operations. Workforce implications include sustaining specialized technical jobs within the aerospace manufacturing and maintenance sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for sole-source reliance on Lockheed Martin for proprietary components.
Long-term sustainment costs can escalate if not closely managed.
Dependence on specific engine models may create vulnerability if parts become scarce.

Positive Signals

Firm-fixed-price contract type helps control costs and provides budget predictability.
Full and open competition suggests a robust market engagement.
Focus on lifecycle support indicates a strategic approach to asset management.

Sector Analysis

This contract falls within the Defense Contract Management Agency's purview, specifically supporting the sustainment of legacy aircraft. The aerospace manufacturing sector, particularly for specialized aircraft parts and support services, is a significant segment of the defense industrial base. Spending in this area is critical for maintaining the readiness of aging fleets, and contracts like this are common for ensuring the longevity of key military assets.

Small Business Impact

The provided data indicates that small business participation (sb: false) was not a specific set-aside requirement for this contract. While Lockheed Martin is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors within the supply chain for engine components or related services. Further analysis would be needed to determine the extent of small business subcontracting.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which ensures compliance with contract terms and performance standards. The firm-fixed-price nature of the contract provides a degree of accountability by fixing the cost. Transparency is facilitated through contract databases, though detailed performance metrics and cost breakdowns may not always be publicly available.

Related Government Programs

KC-10 Sustainment Programs
Air Mobility Command Logistics
Aerospace Component Manufacturing
Defense Logistics Agency Support

Risk Flags

Potential for sole-source dependency on original equipment manufacturer (OEM) for parts.
Aging aircraft fleet may lead to increased maintenance needs and costs.
Complexity of engine components requires specialized technical expertise.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.0 million to LOCKHEED MARTIN CORPORATION. KC-10 ENGINE CLS

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 $17.0 million.

What is the period of performance?

Start: 2023-01-01. End: 2024-07-31.

What is Lockheed Martin Corporation's track record with KC-10 sustainment contracts?

Lockheed Martin Corporation, as the prime contractor, has a long-standing relationship with the U.S. military, including extensive experience in aircraft manufacturing and sustainment. For the KC-10 program specifically, they have been involved in various sustainment efforts over the years, given their role as a major defense contractor. Their track record typically involves managing complex supply chains, providing technical support, and ensuring the operational readiness of aircraft systems. While specific performance metrics for this particular delivery order are not detailed here, Lockheed Martin's overall history suggests a capacity to handle such requirements. However, like any large contractor, past performance can vary, and a deeper dive into specific contract performance reports and any associated issues would be necessary for a comprehensive assessment.

How does the $17.01 million contract value compare to similar KC-10 sustainment efforts?

Direct comparison of this $17.01 million contract value to other KC-10 sustainment efforts requires access to historical contract data for similar scope and duration. However, based on the nature of 'Engine Component Lifecycle Support,' this amount appears to be a component of a larger sustainment strategy rather than the total program cost. Sustainment contracts for large military aircraft can range from millions to billions of dollars over their lifespan, encompassing maintenance, repair, overhaul, and spare parts. This specific award, covering a defined period (ending July 31, 2024), suggests it addresses a particular set of components or services. Without knowing the exact components covered and the specific services rendered, a precise benchmark is difficult. However, for specialized engine parts and lifecycle support, $17 million for a period of roughly 1.5 years is not uncommon within the defense aerospace sector.

What are the primary risks associated with this KC-10 engine component support contract?

The primary risks associated with this contract include potential supply chain disruptions for specialized engine components, which could impact aircraft availability. Given that Lockheed Martin is the incumbent and likely a key player in the KC-10 ecosystem, there's a risk of vendor lock-in or limited competition for future sustainment needs if alternative sources are not developed. Another risk is the potential for cost overruns if unforeseen technical issues arise with the components, although the firm-fixed-price structure aims to mitigate this for the government. Furthermore, the aging nature of the KC-10 fleet itself presents inherent risks related to component reliability and the increasing difficulty and cost of sourcing or manufacturing replacement parts over time. Ensuring continued technical expertise within the contractor workforce is also a consideration.

How effective is the firm-fixed-price (FFP) contract type in managing costs for this type of support?

The firm-fixed-price (FFP) contract type is generally considered effective in managing costs for services and supplies where the scope of work is well-defined and risks can be reasonably estimated. For KC-10 engine component lifecycle support, FFP provides budget certainty for the government, as the contractor assumes most of the cost risk. This incentivizes the contractor to control costs efficiently to maximize profit. However, if unforeseen technical challenges or scope changes arise that were not anticipated during the bidding process, the contractor might seek contract modifications, potentially leading to increased costs. The effectiveness also depends on the accuracy of the initial cost estimates and the contractor's ability to manage their own expenses throughout the contract period. For routine sustainment and component support, FFP is a standard and often preferred method for cost control.

What are the historical spending patterns for KC-10 sustainment and related services?

Historical spending on KC-10 sustainment has been substantial, reflecting the operational lifespan and strategic importance of the aircraft. The KC-10 fleet, operated by the U.S. Air Force, requires continuous support for its complex systems, including engines, airframes, and avionics. Annual spending on sustainment can fluctuate based on maintenance cycles, upgrades, and the availability of spare parts. Over the past decade, significant investments have been made to maintain the readiness of the KC-10, often through multi-year contracts with prime contractors like Lockheed Martin. These expenditures are part of the broader defense budget allocated to maintaining strategic airlift and refueling capabilities. Specific figures for total historical spending are extensive and would require detailed analysis of defense budget allocations and contract awards over many years.

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: $17,009,082

Exercised Options: $17,009,082

Current Obligation: $17,009,082

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA810517D0002

IDV Type: IDC

Timeline