DoD Awards $96M for C-130J MATS/TSSC to Lockheed Martin, High Per-Unit Cost
Contract Overview
Contract Amount: $95,945,058 ($95.9M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2018-07-01
End Date: 2021-12-31
Contract Duration: 1,279 days
Daily Burn Rate: $75.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: C-130J MATS, TSSC
Place of Performance
Location: ORLANDO, ORANGE County, FLORIDA, 32825
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $95.9 million to LOCKHEED MARTIN CORPORATION for work described as: C-130J MATS, TSSC Key points: 1. Contract awarded to sole incumbent, raising competition concerns. 2. High per-unit cost suggests potential for overspending. 3. Limited transparency on pricing benchmarks. 4. Sector: Defense - Aircraft Parts Manufacturing.
Value Assessment
Rating: questionable
The per-unit cost of $75,016 appears high compared to similar aircraft parts contracts. Further analysis is needed to determine if this reflects unique specifications or inflated pricing.
Cost Per Unit: $75,016
Competition Analysis
Competition Level: full-and-open
Although advertised as full and open, the award went to the incumbent, suggesting potential barriers to entry for competitors. The fixed-price contract type provides some cost certainty.
Taxpayer Impact: Taxpayer funds are being spent on aircraft parts with a potentially high per-unit cost, warranting scrutiny for value for money.
Public Impact
Impacts military readiness and operational efficiency of C-130J aircraft. Potential for increased defense spending without clear justification. Raises questions about the effectiveness of competition in the defense supply chain.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of clear justification for high per-unit cost.
- Potential for incumbent advantage despite full and open competition.
- Limited data on pricing benchmarks for similar components.
Positive Signals
- Firm fixed-price contract provides cost predictability.
- Awarded to a known entity with established supply chain.
Sector Analysis
This contract falls within the Defense sector, specifically aircraft parts manufacturing. Spending benchmarks in this area can vary widely based on component complexity and technological advancements.
Small Business Impact
The contract was not awarded to small businesses, indicating a lack of opportunity for this segment in this specific procurement.
Oversight & Accountability
Oversight by the Defense Contract Management Agency is crucial to ensure contract compliance and value for money, especially given the high per-unit cost.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- High per-unit cost.
- Potential incumbent advantage.
- Lack of detailed cost breakdown.
- Limited transparency on competition effectiveness.
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, fl, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $95.9 million to LOCKHEED MARTIN CORPORATION. C-130J MATS, TSSC
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 $95.9 million.
What is the period of performance?
Start: 2018-07-01. End: 2021-12-31.
What specific factors contribute to the high per-unit cost of $75,016 for these C-130J parts?
The high per-unit cost may be attributed to specialized manufacturing processes, unique material requirements, stringent quality control standards, or the proprietary nature of the components. Without detailed specifications and cost breakdowns, it is difficult to ascertain the precise drivers. Further investigation into the technical requirements and market research conducted prior to award is necessary.
How effectively did the 'full and open competition' process ensure competitive pricing for this contract?
While advertised as full and open, the award to the incumbent raises questions about the effectiveness of the competition. Potential competitors may have faced barriers related to technical data, existing relationships, or the complexity of the bidding process. A thorough review of the solicitation and evaluation process is needed to confirm if genuine competition was fostered and if the pricing reflects market rates.
What is the potential impact of this contract's pricing on overall C-130J fleet sustainment costs?
A high per-unit cost for critical components like MATS and TSSC can significantly inflate the overall sustainment costs for the C-130J fleet. This could lead to budget overruns, reduced operational readiness due to parts availability issues, or necessitate difficult trade-offs in other areas of defense spending. Long-term cost implications require careful monitoring and potential renegotiation if value is not demonstrated.
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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp
Address: 100 GLOBAL INNOVATION CIR, ORLANDO, FL, 32825
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: $138,511,952
Exercised Options: $95,945,058
Current Obligation: $95,945,058
Actual Outlays: $4,136,469
Subaward Activity
Number of Subawards: 76
Total Subaward Amount: $73,647,145
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA862115D6276
IDV Type: IDC
Timeline
Start Date: 2018-07-01
Current End Date: 2021-12-31
Potential End Date: 2021-12-31 00:00:00
Last Modified: 2022-10-27
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