DoD awards $5B to Lockheed Martin for C-5M RERP advance procurement, impacting aircraft manufacturing
Contract Overview
Contract Amount: $4,996,841,729 ($5.0B)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2007-04-30
End Date: 2019-01-31
Contract Duration: 4,294 days
Daily Burn Rate: $1.2M/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: ADVANCE PROCUREMENT OF LONG LEAD FOR LRIP FOR C-5M RERP
Place of Performance
Location: MARIETTA, COBB County, GEORGIA, 30063
State: Georgia Government Spending
Plain-Language Summary
Department of Defense obligated $5.00 billion to LOCKHEED MARTIN CORP for work described as: ADVANCE PROCUREMENT OF LONG LEAD FOR LRIP FOR C-5M RERP Key points: 1. Significant investment in a critical aircraft sustainment program. 2. Sole-source award to Lockheed Martin raises competition concerns. 3. Long-term contract duration (4294 days) warrants close monitoring. 4. Focus on LRIP suggests a transition to production phase.
Value Assessment
Rating: questionable
The total award amount of $4.99B is substantial. Without competitive bidding, it's difficult to assess if this price represents fair value. Benchmarking against similar long-lead procurement contracts for large aircraft programs would be necessary.
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 taxpayers.
Taxpayer Impact: The absence of competition for a contract of this magnitude raises concerns about potential overspending and inefficient use of taxpayer funds.
Public Impact
Ensures continued modernization and sustainment of the C-5M Super Galaxy fleet. Supports critical airlift capabilities for national defense. Potential for job creation within the aerospace sector, particularly at Lockheed Martin.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- High contract value
- Long contract duration
Positive Signals
- Supports critical military asset
- Advance procurement for production
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, a high-value industry often characterized by large, complex, and long-term government procurements. Benchmarks for similar advance procurement contracts are scarce due to the specialized nature of military aircraft.
Small Business Impact
The data indicates this is a sole-source award to a large prime contractor, Lockheed Martin. There is no direct indication of small business participation within this specific award notice, though subcontractors may be involved.
Oversight & Accountability
Given the sole-source nature and significant value, robust oversight from the Department of the Air Force is crucial to ensure cost control, performance, and adherence to contract terms throughout the life of the contract.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competitive bidding
- High contract value
- Long contract duration
- Potential for cost growth
- Sole-source award
Tags
aircraft-manufacturing, department-of-defense, ga, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $5.00 billion to LOCKHEED MARTIN CORP. ADVANCE PROCUREMENT OF LONG LEAD FOR LRIP FOR C-5M RERP
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 $5.00 billion.
What is the period of performance?
Start: 2007-04-30. End: 2019-01-31.
What is the justification for the sole-source award, and what steps are being taken to ensure fair pricing?
The justification for a sole-source award typically involves unique capabilities or proprietary technology. However, for advance procurement, the lack of competition is a significant concern. The Department of Defense should provide detailed documentation justifying this approach and implement rigorous price analysis techniques, including should-cost modeling and comparison with historical data, to mitigate potential overpricing.
What are the specific risks associated with the long duration and advance procurement nature of this contract?
The long duration (over 11 years) increases the risk of cost overruns due to inflation, changing technological requirements, and potential contractor inefficiencies. Advance procurement carries risks of obsolescence if production plans shift or if the technology becomes outdated before full deployment. Furthermore, the sole-source aspect exacerbates these risks by limiting oversight and competitive pressure.
How will the effectiveness of the C-5M RERP program be measured, and what are the key performance indicators?
The effectiveness of the C-5M RERP program will likely be measured by the operational readiness rates of the C-5M fleet, mission capable rates, and the successful integration of upgraded systems. Key performance indicators should include on-time delivery of upgraded aircraft, achievement of specified performance improvements (e.g., fuel efficiency, payload capacity), and reduction in maintenance downtime. Regular program reviews and independent assessments are vital.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Address: 86 SOUTH COBB DR, MARIETTA, GA, 30063
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $4,998,134,938
Exercised Options: $4,996,841,729
Current Obligation: $4,996,841,729
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2007-04-30
Current End Date: 2019-01-31
Potential End Date: 2019-01-31 00:00:00
Last Modified: 2023-05-25
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