DoD awards $46.5M to Lockheed Martin for C-130J sustainment, raising concerns about competition
Contract Overview
Contract Amount: $46,495,495 ($46.5M)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2021-08-01
End Date: 2024-02-29
Contract Duration: 942 days
Daily Burn Rate: $49.4K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: C-130J WEAPON SYSTEM LONG TERM SUSTAINMENT
Place of Performance
Location: MARIETTA, COBB County, GEORGIA, 30063
State: Georgia Government Spending
Plain-Language Summary
Department of Defense obligated $46.5 million to LOCKHEED MARTIN CORP for work described as: C-130J WEAPON SYSTEM LONG TERM SUSTAINMENT Key points: 1. Significant contract value for long-term weapon system support. 2. Sole provider Lockheed Martin dominates C-130J sustainment. 3. Potential for cost overruns due to cost-plus contract type. 4. Defense sector relies heavily on established prime contractors.
Value Assessment
Rating: questionable
The $46.5 million award for C-130J sustainment is a substantial investment. Without competitive bidding, it's difficult to benchmark pricing against similar long-term sustainment contracts for other aircraft platforms.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Lockheed Martin. This lack of competition limits price discovery and potentially leads to higher costs for the government.
Taxpayer Impact: The absence of competition for a critical weapon system sustainment contract means taxpayers may be paying a premium without assurance of the best value.
Public Impact
Ensures continued operational readiness of the C-130J Super Hercules fleet. Supports critical airlift capabilities for military operations. Impacts the long-term operational costs for a key military asset.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of competition
Positive Signals
- Ensures critical system sustainment
- Long-term support agreement
Sector Analysis
This contract falls within the Defense sector, specifically focusing on aircraft weapon system sustainment. Spending benchmarks for such long-term support contracts are often high due to the specialized nature and criticality of the assets.
Small Business Impact
This contract does not appear to involve small businesses as prime contractors. The nature of long-term weapon system sustainment typically favors large, established aerospace companies.
Oversight & Accountability
The Department of Defense, through the Defense Contract Management Agency, oversees this contract. However, the sole-source nature limits the agency's ability to leverage competitive pressures for cost savings.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award limits competition and price discovery.
- Cost-plus contract type carries inherent risk of cost overruns.
- Lack of transparency in pricing without competitive benchmarks.
- Potential for long-term financial burden on taxpayers.
Tags
engineering-services, department-of-defense, ga, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $46.5 million to LOCKHEED MARTIN CORP. C-130J WEAPON SYSTEM LONG TERM SUSTAINMENT
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 $46.5 million.
What is the period of performance?
Start: 2021-08-01. End: 2024-02-29.
What is the historical cost performance of Lockheed Martin on similar C-130J sustainment contracts?
Historical cost performance data for Lockheed Martin on similar C-130J sustainment contracts would be crucial for assessing value. Without this, it's challenging to determine if the current cost-plus incentive fee structure is yielding efficient outcomes or if past performance indicates a trend towards cost overruns.
What are the specific risks associated with a sole-source sustainment contract for a critical platform like the C-130J?
The primary risks of a sole-source sustainment contract include inflated pricing due to lack of competition, potential for vendor lock-in, and reduced incentive for the contractor to innovate or improve efficiency. This can lead to higher long-term costs and potentially impact the availability of parts or support if the sole provider faces financial or operational issues.
How does the cost-plus incentive fee structure impact the effectiveness of this sustainment contract?
The cost-plus incentive fee (CPIF) structure aims to incentivize the contractor to control costs by sharing savings or overruns with the government. However, its effectiveness hinges on well-defined performance metrics and realistic cost targets. If targets are too lenient or metrics are poorly defined, the incentive may not drive significant cost savings, and the government still bears the risk of cost increases.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: COST PLUS INCENTIVE FEE (V)
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: $52,220,848
Exercised Options: $52,220,848
Current Obligation: $46,495,495
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA850416D0001
IDV Type: IDC
Timeline
Start Date: 2021-08-01
Current End Date: 2024-02-29
Potential End Date: 2027-08-31 00:00:00
Last Modified: 2026-02-11
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