DoD's $74M C-130 ATS contract awarded to Lockheed Martin without competition

Contract Overview

Contract Amount: $74,326,823 ($74.3M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2010-04-01

End Date: 2013-03-31

Contract Duration: 1,095 days

Daily Burn Rate: $67.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: C130 ATS INTERIM CONTRACT

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32825, UNITED STATES OF AMERICA

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $74.3 million to LOCKHEED MARTIN CORPORATION for work described as: C130 ATS INTERIM CONTRACT Key points: 1. Contract awarded on a firm-fixed-price basis, indicating clear cost expectations. 2. Sole-source award raises questions about potential overpayment and lack of market pressure. 3. Contract duration of 3 years suggests a need for sustained training services. 4. The contract falls under the 'Flight Training' NAICS code, a specialized service area. 5. Awarded by the Defense Contract Management Agency, suggesting a focus on contract execution oversight.

Value Assessment

Rating: questionable

The contract's value of $74.3 million for a 3-year flight training program for the C-130 ATS is difficult to benchmark without comparable sole-source awards. However, the absence of competition inherently limits the government's ability to secure the best possible price. The firm-fixed-price structure provides cost certainty, but the lack of competitive bidding means the government may not have benefited from market-driven cost reductions or innovative pricing strategies that a competitive process could have yielded. Further analysis would require comparing this to other sole-source flight training contracts or assessing the contractor's historical pricing for similar services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Lockheed Martin Corporation, was considered. The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of available alternatives. Without a competitive bidding process, it is impossible to determine the number of potential bidders or the range of pricing that might have emerged in a more open market. This limits the government's ability to leverage competition to drive down costs and ensure optimal value.

Taxpayer Impact: Sole-source awards mean taxpayers may not be receiving the most cost-effective solution, as the absence of competition can lead to higher prices than might be achieved through a competitive process.

Public Impact

The primary beneficiaries are the U.S. Air Force personnel who will receive C-130 Aircrew Training System (ATS) training. The services delivered include flight training, likely encompassing simulator training, classroom instruction, and potentially flight hours. The contract is based in Florida (ST: FL, SN: FLORIDA), indicating a specific geographic location for training operations. This contract supports the readiness and operational capability of C-130 aircrews within the Department of Defense.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings for taxpayers.
Lack of competition may reduce incentives for contractor innovation and efficiency.
Contract duration and value warrant scrutiny for potential cost overruns or inefficiencies over time.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Award to a known incumbent contractor (Lockheed Martin) may ensure continuity of essential training services.
Focus on flight training directly supports critical military operational readiness.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex technological requirements, and significant government procurement. Flight training services, particularly for specialized platforms like the C-130, represent a niche within this sector. Lockheed Martin is a major defense contractor with extensive experience in aircraft manufacturing and support. Comparable spending benchmarks for flight training contracts can vary widely based on platform, duration, and scope, but sole-source awards often command a premium compared to competitively bid contracts.

Small Business Impact

This contract does not appear to have a small business set-aside (SB: false). As a sole-source award to a large prime contractor, there is no direct indication of subcontracting opportunities for small businesses within this specific contract's structure. However, large prime contractors are often required to meet overall small business subcontracting goals across their portfolio, so some portion of the work may indirectly flow down to small businesses.

Oversight & Accountability

The Defense Contract Management Agency (DCMA) is responsible for overseeing contract administration and ensuring compliance with contract terms. Oversight mechanisms would include monitoring performance, reviewing invoices, and ensuring adherence to the firm-fixed-price agreement. Transparency is generally maintained through contract databases like FPDS, though the specifics of sole-source justifications may have limited public disclosure. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

C-130 Hercules Aircraft Sustainment
Military Flight Training Services
Aerospace Defense Contractor Support
Aircrew Training Systems

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Interim contract status

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $74.3 million to LOCKHEED MARTIN CORPORATION. C130 ATS INTERIM CONTRACT

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 $74.3 million.

What is the period of performance?

Start: 2010-04-01. End: 2013-03-31.

What is Lockheed Martin's track record with similar C-130 training contracts?

Lockheed Martin, as the original equipment manufacturer (OEM) for many C-130 variants and a major defense contractor, has a long-standing history of providing support and training services for the C-130 platform. This includes involvement in various training systems, upgrades, and sustainment programs. While specific details on prior interim contracts for the C-130 ATS are not readily available in this dataset, their extensive experience with the C-130 family suggests a deep understanding of the aircraft's operational requirements and training needs. Their track record generally involves large-scale, complex defense programs, often characterized by long-term relationships with the Department of Defense. Evaluating their performance on this specific contract would require examining delivery schedules, training effectiveness metrics, and any reported issues or successes during the contract period.

How does the value of this contract compare to other C-130 training programs?

Direct comparison of this $74.3 million, 3-year C-130 ATS interim contract to other C-130 training programs is challenging due to the sole-source nature of this award and the 'interim' designation, suggesting it might cover a transitional period. Competitive contracts for comprehensive C-130 training systems, which often include initial development, hardware, software, and long-term sustainment, can range from tens to hundreds of millions of dollars over many years. The per-year cost of this contract is approximately $24.8 million. Without knowing the exact scope (e.g., number of trainees, types of simulators, specific curriculum), it's difficult to establish a precise per-unit cost benchmark. However, sole-source awards are generally expected to be higher than competitively procured contracts for similar services due to the lack of price pressure from market competition.

What are the primary risks associated with this sole-source contract?

The primary risk associated with this sole-source contract is the potential for inflated pricing due to the absence of competition. Without competing bids, the government lacks a market-driven benchmark to ensure it is receiving the best value for its money. This can lead to overpayment compared to what might have been achieved in a competitive environment. Another risk is a potential lack of incentive for the contractor, Lockheed Martin, to innovate or optimize costs, as there is no direct competitive pressure to do so. Furthermore, if the 'interim' nature of the contract implies a stop-gap measure, there's a risk of prolonged reliance on this sole-source arrangement if a more permanent, competitive solution is delayed, potentially locking the government into suboptimal terms.

How effective is the C-130 ATS program in meeting its training objectives?

The effectiveness of the C-130 Aircrew Training System (ATS) program, supported by this interim contract, is crucial for maintaining the operational readiness of C-130 aircrews. While this specific contract data doesn't provide direct measures of training effectiveness (e.g., pass rates, mission success metrics, pilot proficiency levels), the program's success is generally evaluated based on its ability to prepare aircrews for real-world missions. Key performance indicators would likely include simulator fidelity, curriculum relevance, instructor quality, and the overall ability of graduates to perform their duties safely and effectively. The Department of Defense and the Defense Contract Management Agency would typically monitor these aspects through performance reports and operational feedback from the using commands.

What are the historical spending patterns for C-130 training by the Department of Defense?

Historical spending patterns for C-130 training by the Department of Defense are substantial, reflecting the C-130's long service life and its role as a workhorse transport aircraft across multiple military branches. Over the decades, the DoD has invested heavily in various iterations of C-130 training systems, including initial acquisition of simulators, curriculum development, contractor-operated training services, and ongoing sustainment and upgrades. Spending has often involved both competitively awarded contracts for major training system developments and sole-source contracts for specialized support or interim solutions, like the one analyzed here. Total spending fluctuates based on modernization programs, fleet size, operational tempo, and the lifecycle stage of the aircraft and its associated training infrastructure. Analyzing historical data would reveal trends in contract types, average award values, and the prevalence of sole-source versus competitive procurements for C-130 training.

Industry Classification

NAICS: Educational Services › Technical and Trade Schools › Flight Training

Product/Service Code: EDUCATION AND TRAINING › EDUCATION AND TRAINING SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 12506 LAKE UNDERHILL RD, ORLANDO, FL, 32825

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $114,610,247

Exercised Options: $89,190,601

Current Obligation: $74,326,823

Contract Characteristics

Cost or Pricing Data: YES

Timeline