DoD's $61.7M C-130J programmatic support contract awarded to Lockheed Martin without competition

Contract Overview

Contract Amount: $61,730,252 ($61.7M)

Contractor: Lockheed Martin Corp

Awarding Agency: Department of Defense

Start Date: 2016-08-19

End Date: 2022-12-31

Contract Duration: 2,325 days

Daily Burn Rate: $26.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: C-130J, ACAT I FYOC PROGRAMMATIC SUPPORT

Place of Performance

Location: MARIETTA, COBB County, GEORGIA, 30063

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $61.7 million to LOCKHEED MARTIN CORP for work described as: C-130J, ACAT I FYOC PROGRAMMATIC SUPPORT Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The contract covers programmatic support for the C-130J aircraft, a critical military transport platform. 3. Performance period spans over six years, indicating a long-term need for these services. 4. The firm-fixed-price contract type shifts some risk to the contractor. 5. No small business set-aside was applied, suggesting limited opportunities for smaller firms. 6. The contract is a delivery order under a larger contract vehicle.

Value Assessment

Rating: questionable

Benchmarking the value of this specific programmatic support contract is challenging without detailed task orders and comparable service agreements. However, the sole-source award raises concerns about whether the government achieved the best possible price. Given the long performance period and the critical nature of the C-130J program, the total value is substantial. Further analysis would require comparing the rates and deliverables to other support contracts for similar complex aircraft systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities or when urgency dictates. The lack of competition means that the government did not benefit from a competitive bidding process, which could have led to lower prices and more innovative solutions.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without competing the requirement, there is less assurance that the pricing reflects fair market value.

Public Impact

The U.S. Air Force benefits from continued programmatic support for its C-130J Super Hercules fleet. This contract ensures the operational readiness and sustainment of a key military airlift capability. The services provided are critical for maintaining the effectiveness of the C-130J program. The contract supports specialized technical and programmatic expertise essential for complex defense systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases cost to taxpayers.
Lack of small business participation may limit opportunities for smaller, innovative firms in the defense industrial base.
Long contract duration without clear performance metrics could lead to complacency or scope creep.

Positive Signals

Firm-fixed-price contract type provides cost certainty for the government.
Award to Lockheed Martin, the original equipment manufacturer, ensures access to specialized knowledge and proprietary data.
Programmatic support is critical for maintaining the operational effectiveness of a vital military asset.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex supply chains, and significant government investment. Programmatic support contracts like this one are common for major defense platforms, ensuring sustainment and modernization. The C-130J is a mature but continuously upgraded platform, requiring ongoing specialized support. Spending in this sub-sector is driven by defense budgets and strategic priorities, with original equipment manufacturers often being the primary service providers due to unique technical knowledge.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for them based on the provided data. The award to a large prime contractor like Lockheed Martin suggests that the primary work will be performed by the prime or its large subcontractors. This limits direct opportunities for small businesses to engage in this specific contract, although they may participate indirectly through the broader defense supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. The firm-fixed-price nature provides some cost control, but the sole-source award necessitates careful monitoring of performance and adherence to the Statement of Work. Inspector General investigations could be initiated if fraud, waste, or abuse is suspected. Transparency is limited due to the non-competitive nature of the award.

Related Government Programs

C-130J Super Hercules Sustainment
Air Mobility Command Aircraft Support
Defense Logistics Agency Aviation Support
Lockheed Martin Aeronautics Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $61.7 million to LOCKHEED MARTIN CORP. C-130J, ACAT I FYOC PROGRAMMATIC SUPPORT

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 $61.7 million.

What is the period of performance?

Start: 2016-08-19. End: 2022-12-31.

What is the historical spending trend for programmatic support of the C-130J program?

Analyzing historical spending for C-130J programmatic support requires accessing detailed contract data over multiple fiscal years. Typically, such programs involve significant, sustained investment due to the platform's long service life and continuous upgrade cycles. Spending can fluctuate based on modernization initiatives, sustainment needs, and operational tempo. Without specific historical data for this contract vehicle or similar sole-source awards, it's difficult to establish a precise trend. However, major defense platforms like the C-130J generally see consistent, substantial spending on programmatic support throughout their operational lifespan, often managed through a series of contracts and delivery orders.

How does the pricing of this contract compare to similar programmatic support contracts for other military aircraft?

Direct comparison of pricing for this $61.7 million C-130J programmatic support contract is difficult without access to detailed pricing structures and the specific scope of work for comparable contracts. However, sole-source awards to original equipment manufacturers (OEMs) like Lockheed Martin for specialized support often carry a premium compared to competitively procured services. Factors influencing price include the complexity of the aircraft, the level of technical expertise required, the duration of the contract, and the specific support elements included (e.g., engineering, logistics, training). Benchmarking would ideally involve comparing hourly rates, overhead application, and profit margins against other OEM support contracts for platforms of similar complexity and age, adjusted for any differences in contract type and performance period.

What are the key performance indicators (KPIs) used to measure the success of this contract?

The provided data does not specify the Key Performance Indicators (KPIs) for this contract. However, for programmatic support of a major defense asset like the C-130J, typical KPIs would likely include metrics related to aircraft availability rates, mission capable rates, response times for technical support, successful implementation of program milestones, adherence to budget, and quality of deliverables (e.g., engineering reports, logistics plans). The effectiveness of the contractor's support in maintaining the operational readiness and long-term viability of the C-130J fleet would be the overarching measure of success. These KPIs would be detailed in the contract's Performance Work Statement (PWS).

What is Lockheed Martin's track record in providing programmatic support for the C-130J program?

Lockheed Martin, as the original equipment manufacturer (OEM) of the C-130J Super Hercules, has an extensive and established track record in providing programmatic support for this aircraft. They are responsible for the aircraft's design, production, and ongoing sustainment. Their long-standing involvement implies deep institutional knowledge, access to proprietary data, and established relationships with the U.S. Air Force and international operators. This contract represents a continuation of that relationship, leveraging their unique expertise to ensure the continued operational effectiveness and modernization of the C-130J fleet. Their performance history on similar contracts would be a key factor in the government's decision to award this sole-source contract.

What are the potential risks associated with a sole-source award for critical aircraft support?

The primary risk associated with a sole-source award for critical aircraft support is the potential for inflated costs due to the lack of competitive pressure. Without competing the requirement, the government may not achieve the best possible pricing or terms. Another risk is vendor lock-in, where the government becomes overly reliant on a single provider, potentially limiting future flexibility or innovation. There's also a risk that without the impetus of competition, the contractor might be less motivated to optimize efficiency or proactively identify cost-saving measures. Ensuring robust oversight and negotiation is crucial to mitigate these risks.

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

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: $75,055,595

Exercised Options: $61,900,071

Current Obligation: $61,730,252

Actual Outlays: $3,600,778

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA862516D6458

IDV Type: IDC

Timeline