Lockheed Martin awarded $16.9M for C-130 wing durability testing, a sole-source engineering service contract

Contract Overview

Contract Amount: $16,911,748 ($16.9M)

Contractor: Lockheed Martin Corp

Awarding Agency: Department of Defense

Start Date: 2020-09-01

End Date: 2024-02-14

Contract Duration: 1,261 days

Daily Burn Rate: $13.4K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: C-130 FULL SCALE WING DURABILITY TEST - TASK III

Place of Performance

Location: MARIETTA, COBB County, GEORGIA, 30063

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $16.9 million to LOCKHEED MARTIN CORP for work described as: C-130 FULL SCALE WING DURABILITY TEST - TASK III Key points: 1. Contract awarded to a single, established prime contractor, raising questions about competitive pricing. 2. The contract type, Cost Plus Fixed Fee, can incentivize cost overruns if not closely monitored. 3. Performance period spans over four years, indicating a long-term need for these specialized engineering services. 4. The specific nature of the C-130 wing durability test suggests a critical component for aircraft sustainment. 5. This contract falls within the broader Defense sector, specifically supporting aircraft maintenance and upgrade programs.

Value Assessment

Rating: fair

Benchmarking the value of this specific C-130 wing durability test is challenging without comparable sole-source contracts. The $16.9 million price tag for over 1200 days of work suggests a significant investment in ensuring aircraft structural integrity. However, the absence of competition limits the ability to assess if this represents a fair market price or if alternative solutions could have been more cost-effective. The Cost Plus Fixed Fee structure requires diligent oversight to ensure costs remain reasonable.

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 Corp, was solicited. This approach is typically used when a unique capability or proprietary technology is required, or in situations where only one source is available. The lack of competition means that price discovery through a bidding process did not occur, potentially leading to a higher price than if multiple firms had competed.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without a competitive process, there is less assurance that the government secured the best possible price for these critical engineering services.

Public Impact

The primary beneficiaries are the Department of Defense, ensuring the continued airworthiness and safety of the C-130 fleet. Services delivered include specialized engineering analysis and testing critical for aircraft structural integrity. The geographic impact is primarily within the United States, where the C-130 aircraft are operated and maintained. Workforce implications include the employment of highly skilled engineers and technicians at Lockheed Martin.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
Cost Plus Fixed Fee contract type can lead to cost overruns without strict oversight.
Long performance period requires sustained monitoring for efficiency.

Positive Signals

Contract awarded to a prime contractor with established expertise in C-130 aircraft.
Focus on durability testing indicates a commitment to aircraft safety and longevity.
Engineering Services NAICS code suggests specialized technical capabilities.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), which is a significant part of the broader aerospace and defense industry. The aerospace industry is characterized by high R&D costs, long product development cycles, and substantial government procurement. Spending on specialized testing and analysis, like wing durability, is crucial for maintaining the safety and operational readiness of complex military platforms such as the C-130. Comparable spending benchmarks are difficult to establish for highly specific sole-source testing contracts.

Small Business Impact

This contract was awarded directly to Lockheed Martin Corporation and does not appear to have a small business set-aside component. There is no explicit information regarding subcontracting plans for small businesses. Given the specialized nature of the work and the prime contractor's capabilities, it is possible that any subcontracting would be for highly specific components or services, but this is not detailed in the provided data.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractors meet performance requirements and adhere to contract terms. The Cost Plus Fixed Fee structure necessitates rigorous financial oversight to scrutinize costs incurred and ensure they align with the fixed fee. Transparency is generally maintained through contract reporting mechanisms, though specific details of the testing and findings may be sensitive.

Related Government Programs

C-130 Hercules Sustainment Programs
Aerospace Engineering Services
Aircraft Structural Integrity Programs
Defense Logistics Agency (DLA) Support Contracts

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Long performance period

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.9 million to LOCKHEED MARTIN CORP. C-130 FULL SCALE WING DURABILITY TEST - TASK III

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $16.9 million.

What is the period of performance?

Start: 2020-09-01. End: 2024-02-14.

What is the track record of Lockheed Martin Corp in performing similar sole-source engineering services contracts for the Department of Defense?

Lockheed Martin Corporation is a major defense contractor with extensive experience in sole-source and competitively awarded contracts across various platforms, including the C-130. They have a long history of providing engineering, manufacturing, and sustainment services for military aircraft. While specific data on similar sole-source engineering services contracts for wing durability testing is not provided, their overall track record suggests a high level of capability. However, the absence of competition in sole-source awards means that performance metrics and pricing from past sole-source engagements are less indicative of overall value compared to competitive contracts.

How does the $16.9 million cost compare to similar C-130 wing durability testing contracts, if any?

Direct comparison of the $16.9 million cost for this specific C-130 wing durability test is difficult due to the sole-source nature of the award and the highly specialized requirements. Publicly available data rarely details the exact cost breakdown for such niche engineering services, especially when awarded without competition. Generally, sole-source contracts are more susceptible to higher pricing than competitively bid ones. Without access to internal DoD cost analyses or comparable sole-source contracts for similar testing on other aircraft platforms, it's challenging to definitively benchmark this price against market rates or alternative solutions.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for engineering services?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is that the contractor may have less incentive to control costs compared to fixed-price contracts, as costs are reimbursed. While the fixed fee provides a ceiling for the contractor's profit, the government bears the risk of cost overruns. This necessitates robust government oversight to monitor expenditures, ensure efficiency, and prevent unnecessary costs. For engineering services like durability testing, where the scope can sometimes evolve, effective management and clear communication are crucial to mitigate the risk of escalating expenses beyond the initial estimates.

What is the expected impact of this contract on the operational readiness and safety of the C-130 fleet?

This contract is expected to significantly enhance the operational readiness and safety of the C-130 fleet by ensuring the structural integrity of its wings. Durability testing identifies potential weaknesses, fatigue points, and predicts the lifespan of critical components under various operational stresses. By addressing these aspects proactively, the DoD can schedule necessary maintenance, repairs, or upgrades, thereby preventing in-flight failures, extending the service life of the aircraft, and ensuring that C-130s can reliably perform their missions, which often include cargo transport, troop deployment, and humanitarian aid.

How has federal spending on engineering services for aircraft sustainment evolved over the past five years?

Federal spending on engineering services for aircraft sustainment has generally remained robust, driven by the need to maintain aging fleets and adapt to evolving threats and technologies. While specific figures for C-130 wing durability testing are not readily available, the overall defense budget allocates substantial resources to sustainment, maintenance, repair, and overhaul (MRO) activities for major aircraft platforms. Factors influencing this spending include the age of the fleet, geopolitical demands, and technological advancements requiring upgrades. The trend often involves a mix of competitive bids for routine services and sole-source awards for specialized, proprietary, or urgent sustainment needs, reflecting a dynamic market influenced by both cost-efficiency and critical operational requirements.

What are the implications of awarding this contract solely to Lockheed Martin Corp for future competition in the C-130 sustainment market?

Awarding this specific contract solely to Lockheed Martin Corp, the original equipment manufacturer (OEM), has implications for future competition. As the OEM, Lockheed Martin possesses unique technical data and expertise related to the C-130's design and manufacturing. This can create a barrier to entry for other potential service providers, particularly for highly specialized tasks like structural durability testing. While it ensures continuity and leverages existing knowledge, it may limit opportunities for smaller or non-OEM companies to enter the market for certain sustainment services, potentially reducing overall market competition and innovation in the long run.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 86 SOUTH COBB DR, MARIETTA, GA, 30063

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: $16,911,748

Exercised Options: $16,911,748

Current Obligation: $16,911,748

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA850417D0004

IDV Type: IDC

Timeline