Air Force awards $33M+ to Lockheed Martin for C-5 aircraft logistics support

Contract Overview

Contract Amount: $32,964,756 ($33.0M)

Contractor: Lockheed Martin Corp

Awarding Agency: Department of Defense

Start Date: 2022-02-01

End Date: 2026-12-31

Contract Duration: 1,794 days

Daily Burn Rate: $18.4K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CONTRACTOR LOGISTICS SUPPORT (CLS) FOR THE C-5 AIRCRAFT.

Place of Performance

Location: MARIETTA, COBB County, GEORGIA, 30063

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $33.0 million to LOCKHEED MARTIN CORP for work described as: CONTRACTOR LOGISTICS SUPPORT (CLS) FOR THE C-5 AIRCRAFT. Key points: 1. Contract awarded on a sole-source basis, limiting competitive pricing benefits. 2. Long-term contract (2022-2026) suggests ongoing need for C-5 sustainment. 3. Firm Fixed Price contract type shifts cost risk to the contractor. 4. Focus on Contractor Logistics Support (CLS) indicates a reliance on external expertise for aircraft maintenance. 5. The contract value is substantial, reflecting the complexity of supporting a large strategic airlifter fleet.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without detailed cost breakdowns and comparisons to similar CLS contracts for other large aircraft. The firm fixed price structure is generally favorable for the government in controlling costs, but the sole-source nature raises questions about whether the best possible price was achieved. The duration of the contract suggests a stable, albeit potentially expensive, arrangement for sustainment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This typically occurs when a single contractor possesses unique capabilities or intellectual property necessary for the requirement. The lack of competition means the government did not benefit from a bidding process that could drive down prices through market forces.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the most competitive pricing available, as the government did not explore options from other potential providers.

Public Impact

The U.S. Air Force benefits from continued operational readiness of its C-5M Super Galaxy fleet. Services delivered include logistics support, maintenance, and sustainment for a critical strategic airlift aircraft. The primary geographic impact is at bases where C-5 aircraft are stationed and maintained, predominantly in Georgia. Workforce implications include the potential for Lockheed Martin employees to perform maintenance and support functions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
Long-term contract duration may not adapt to evolving market conditions.
Reliance on a single contractor for critical logistics support creates vendor lock-in.

Positive Signals

Firm Fixed Price contract shifts cost risk to the contractor.
Contractor is a known entity with established expertise in C-5 sustainment.
Long-term nature provides stability for aircraft readiness.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex supply chains, and significant government investment. Contractor Logistics Support (CLS) is a critical segment within this sector, focusing on maintaining the operational readiness of complex military platforms. Spending in this area is substantial, driven by the need to keep aging fleets viable. This contract fits within the broader ecosystem of aircraft manufacturing and sustainment services.

Small Business Impact

This contract does not appear to involve a small business set-aside. Given the sole-source nature and the prime contractor (Lockheed Martin), it is unlikely that significant subcontracting opportunities for small businesses are mandated within this specific award, though the prime contractor may engage small businesses independently.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Transparency is generally maintained through contract award databases, but detailed performance metrics and cost audits are typically internal. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

C-17 Globemaster III Logistics Support
Air Mobility Command Aircraft Maintenance
Defense Contract Management Agency Services
Aircraft Parts and Auxiliary Equipment Manufacturing

Risk Flags

Sole-source award
Lack of competitive pricing analysis
Potential for vendor lock-in

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.0 million to LOCKHEED MARTIN CORP. CONTRACTOR LOGISTICS SUPPORT (CLS) FOR THE C-5 AIRCRAFT.

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $33.0 million.

What is the period of performance?

Start: 2022-02-01. End: 2026-12-31.

What is Lockheed Martin's track record with C-5 aircraft sustainment?

Lockheed Martin is the original manufacturer of the C-5 Galaxy and has been the primary provider of sustainment and logistics support for the aircraft for decades. Their track record includes managing complex maintenance, upgrades, and ensuring the operational readiness of the C-5 fleet. This long-standing relationship suggests a deep understanding of the aircraft's systems and maintenance requirements. However, the sole-source nature of this specific contract means that while their historical performance is relevant, it doesn't inherently guarantee the best value compared to potential competitors if they existed.

How does the $33M+ contract value compare to historical spending on C-5 CLS?

Without access to specific historical contract data for C-5 CLS from the Air Force, a direct comparison of the $33M+ value is difficult. However, the C-5 is a large, strategic airlifter with a long service life, requiring extensive and continuous maintenance. Annual sustainment costs for such platforms can easily run into tens of millions of dollars, if not hundreds of millions over the life of the fleet. The current contract's duration (approximately 4.75 years) and value suggest an average annual spend of roughly $7M, which appears moderate for a platform of this scale, potentially indicating a focus on specific logistics support elements rather than full-spectrum maintenance.

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 lack of competition. Taxpayers may be paying more than necessary because alternative providers were not considered or able to bid. Another risk is vendor lock-in, where the Air Force becomes heavily reliant on Lockheed Martin for C-5 sustainment, making it difficult and costly to switch providers in the future. Performance risk also exists, although Lockheed Martin's long history with the C-5 mitigates this to some extent. The firm fixed price structure, while beneficial for cost control, could incentivize the contractor to cut corners on quality if not adequately monitored.

How effective is Contractor Logistics Support (CLS) for maintaining aging aircraft like the C-5?

CLS can be highly effective for maintaining aging aircraft like the C-5, provided the contract is well-structured and managed. CLS leverages the original equipment manufacturer's (OEM) or specialized third-party provider's expertise, potentially leading to more efficient maintenance, access to proprietary technical data, and streamlined parts procurement. For the C-5, which is a complex and aging platform, CLS allows the Air Force to focus on its core mission while outsourcing the intricate sustainment tasks. Effectiveness hinges on clear performance metrics, robust oversight, and competitive pricing, which is a concern in this sole-source award.

What is the typical competition level for large aircraft sustainment contracts?

The typical competition level for large aircraft sustainment contracts varies significantly. For newer platforms or those with proprietary technology, sole-source or limited competition awards to the OEM are common, especially in the initial years of service. As aircraft age and more third-party maintenance providers gain expertise, opportunities for open competition or multiple-award contracts can emerge. However, for highly specialized or legacy platforms like the C-5, where the OEM holds significant intellectual property and established support infrastructure, sole-source or limited competition remains prevalent, often driven by technical requirements and perceived risk reduction.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

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: $32,964,756

Exercised Options: $32,964,756

Current Obligation: $32,964,756

Subaward Activity

Number of Subawards: 127

Total Subaward Amount: $9,712,998

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA852521D0003

IDV Type: IDC

Timeline