DoD's $5.9B advance procurement for C-130J aircraft awarded to Lockheed Martin
Contract Overview
Contract Amount: $5,934,097,112 ($5.9B)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2013-12-09
End Date: 2020-07-31
Contract Duration: 2,426 days
Daily Burn Rate: $2.4M/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: FY13 ADVANCE PROCUREMENT FUNDS FOR FY14 C-130J AIRCRAFT
Place of Performance
Location: MARIETTA, COBB County, GEORGIA, 30063
State: Georgia Government Spending
Plain-Language Summary
Department of Defense obligated $5.93 billion to LOCKHEED MARTIN CORP for work described as: FY13 ADVANCE PROCUREMENT FUNDS FOR FY14 C-130J AIRCRAFT Key points: 1. Significant investment in long-lead items for future aircraft production. 2. Sole-source award indicates limited market alternatives for this specific platform. 3. Long contract duration suggests a sustained need for C-130J fleet sustainment and expansion. 4. Firm-fixed-price contract aims to control costs, but advance procurement carries inherent risks. 5. Focus on aircraft manufacturing highlights a critical defense industrial base capability.
Value Assessment
Rating: fair
This contract represents a substantial advance procurement commitment for C-130J aircraft. While advance procurement is common for complex weapon systems to secure production slots and manage long lead times, the full value realization depends on the subsequent full-rate production contracts. Benchmarking the 'value for money' is challenging without knowing the final unit costs of the aircraft themselves. However, the firm-fixed-price nature provides some cost certainty upfront.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was awarded on a sole-source basis, indicating that Lockheed Martin is the only provider capable of supplying the necessary components or fulfilling the specific requirements for the C-130J advance procurement. This lack of competition limits the opportunity for price discovery through a bidding process.
Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. However, for highly specialized defense systems like the C-130J, a sole-source approach may be necessary to ensure access to critical technology and maintain production.
Public Impact
Benefits the U.S. Air Force and potentially allied nations requiring C-130J transport capabilities. Ensures the continued production and availability of C-130J aircraft, vital for global logistics and tactical airlift. Supports jobs within Lockheed Martin's aerospace manufacturing facilities, primarily in Marietta, Georgia. Maintains a critical component of the U.S. military's airlift and mobility infrastructure.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source nature limits competitive pricing benefits for taxpayers.
- Advance procurement funds are committed before final aircraft production, introducing some financial risk if program priorities shift.
- Long contract duration increases exposure to potential cost overruns or scope changes over time.
Positive Signals
- Firm-fixed-price contract provides cost certainty for the advance procurement phase.
- Secures long-lead production slots, ensuring timely delivery of future aircraft.
- Supports a critical defense industrial base capability and maintains essential airlift capacity.
Sector Analysis
This contract falls within the aerospace and defense sector, specifically aircraft manufacturing. The C-130J Super Hercules is a versatile tactical airlifter used globally. Advance procurement funds are crucial for managing the complex supply chains and long lead times associated with producing such sophisticated aircraft. Comparable spending benchmarks would involve other major defense aircraft programs requiring similar long-term production commitments.
Small Business Impact
This contract was awarded directly to Lockheed Martin and does not appear to have a specific small business set-aside component. However, as a prime contractor, Lockheed Martin is expected to utilize a broad supply chain, which likely includes opportunities for small businesses to participate as subcontractors in the manufacturing process.
Oversight & Accountability
Oversight for this contract would primarily reside with the Department of Defense's contracting and program management offices. The Defense Contract Management Agency (DCMA) would likely be involved in monitoring performance and compliance. Transparency is facilitated through contract databases like FPDS, though detailed cost breakdowns for advance procurement are often proprietary.
Related Government Programs
- C-130J Super Hercules Production
- Tactical Airlift Aircraft Procurement
- Aerospace Manufacturing Contracts
- Defense Industrial Base Sustainment
Risk Flags
- Sole-source award
- Advance procurement commitment
- Long contract duration
Tags
defense, department-of-defense, department-of-the-air-force, lockheed-martin-corp, aircraft-manufacturing, advance-procurement, sole-source, firm-fixed-price, definitive-contract, tactical-airlift, c-130j, georgia
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $5.93 billion to LOCKHEED MARTIN CORP. FY13 ADVANCE PROCUREMENT FUNDS FOR FY14 C-130J 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 $5.93 billion.
What is the period of performance?
Start: 2013-12-09. End: 2020-07-31.
What is the historical spending trend for C-130J advance procurement and production contracts awarded to Lockheed Martin?
Historical data indicates a consistent pattern of significant investment in the C-130J program by the Department of Defense. Advance procurement funds have been allocated annually to secure production capacity and manage long lead times for this critical tactical airlifter. Over the years, total contract values for C-130J production, including advance procurement, have amounted to billions of dollars, reflecting the program's longevity and the ongoing need for fleet modernization and expansion. Specific spending trends show fluctuations based on annual budget allocations and program priorities, but the overall commitment to the C-130J platform remains substantial, underscoring its strategic importance.
How does the unit cost of the C-130J aircraft compare to similar tactical airlifters in the global market?
Directly comparing the unit cost of the C-130J to other tactical airlifters is complex due to variations in capabilities, mission profiles, and procurement quantities. However, the C-130J is generally considered a high-capability, medium-sized tactical airlifter. Its price reflects advanced avionics, engine performance, and payload capacity. While specific unit costs vary by configuration and contract, publicly available data and industry analyses often place the C-130J in a higher price bracket compared to smaller, less capable aircraft, but competitive within its class for platforms offering similar range, payload, and operational flexibility. Competitors might include aircraft like the Airbus C295 or Embraer KC-390, each with different strengths and cost structures.
What are the primary risks associated with this large advance procurement contract?
The primary risks associated with this advance procurement contract include financial commitment before final production, potential for program schedule delays or changes, and the sole-source nature limiting competitive pricing. Advance procurement funds are used for long-lead items, meaning significant investment is made before the final aircraft is built. If the program's overall requirements or budget are reduced, or if technical issues arise, these upfront funds could be at risk. Furthermore, the sole-source award means taxpayers do not benefit from competitive bidding, potentially leading to a higher overall cost for the aircraft compared to a competed program. Contractor performance risk also exists, although Lockheed Martin has extensive experience with the C-130J.
What is Lockheed Martin's track record in delivering C-130J aircraft and fulfilling advance procurement obligations?
Lockheed Martin has a long and established track record of delivering C-130J aircraft to the U.S. Air Force and numerous international partners. The company has consistently met production schedules and fulfilled its contractual obligations for both aircraft delivery and advance procurement phases over several decades. Their experience with the C-130 platform, dating back to earlier variants, provides a deep understanding of the manufacturing processes, supply chain management, and technological requirements. While specific contract performance metrics can vary, the overall delivery and sustainment of the C-130J fleet globally demonstrate a high level of capability and reliability in meeting customer demands.
How does this contract align with the U.S. Air Force's long-term strategic airlift and mobility goals?
This advance procurement contract is directly aligned with the U.S. Air Force's long-term strategic airlift and mobility goals. The C-130J Super Hercules is a cornerstone of the Air Force's tactical airlift capability, essential for transporting troops, equipment, and supplies into austere or contested environments. By funding advance procurement, the Air Force ensures the continued production of these vital aircraft, supporting fleet modernization, replacement of aging C-130 models, and potentially expanding overall airlift capacity. This investment underpins the ability to project power, conduct humanitarian assistance, and respond to global contingencies, all critical components of U.S. national security strategy.
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: 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: $5,934,107,112
Exercised Options: $5,934,107,112
Current Obligation: $5,934,097,112
Actual Outlays: $-2,822,393
Subaward Activity
Number of Subawards: 27
Total Subaward Amount: $8,255,129
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2013-12-09
Current End Date: 2020-07-31
Potential End Date: 2020-07-31 00:00:00
Last Modified: 2025-08-07
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