Air Force awards $45.3M to Lockheed Martin for aircraft modification kits, extending through April 2025

Contract Overview

Contract Amount: $45,250,880 ($45.3M)

Contractor: Lockheed Martin Corp

Awarding Agency: Department of Defense

Start Date: 2017-07-06

End Date: 2025-04-30

Contract Duration: 2,855 days

Daily Burn Rate: $15.8K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MC-130J, FYOC INCREMENT-3 KITS AND AUXILIARY FLIGHT DECK STATION (AFDS) INSTALL ECP 16-00065

Place of Performance

Location: MARIETTA, COBB County, GEORGIA, 30063

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $45.3 million to LOCKHEED MARTIN CORP for work described as: MC-130J, FYOC INCREMENT-3 KITS AND AUXILIARY FLIGHT DECK STATION (AFDS) INSTALL ECP 16-00065 Key points: 1. Contract awarded to a single, established prime contractor for specialized aircraft components. 2. Focus on incremental upgrades and auxiliary flight deck stations suggests ongoing modernization efforts. 3. Firm Fixed Price contract type aims to control costs for the government. 4. Long performance period indicates a sustained need for these modifications. 5. Lack of competition raises questions about potential cost efficiencies and alternative solutions. 6. The specific nature of the kits and stations points to a niche requirement within aircraft manufacturing.

Value Assessment

Rating: fair

The contract value of $45.3 million for aircraft modification kits and auxiliary flight deck stations appears to be within a reasonable range for specialized aerospace components, especially considering the long performance period extending to April 2025. However, without direct benchmarks for similar ECP (Engineering Change Proposal) modifications for the MC-130J aircraft, a precise value-for-money assessment is challenging. The firm fixed-price structure provides cost certainty, but the absence of competition limits the ability to benchmark against market rates or identify potential cost savings through competitive bidding.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Lockheed Martin Corporation, was solicited. This approach is typically used when a unique product or service is required, or when there is a lack of available competition. The absence of a competitive bidding process means that the government did not explore potential alternative solutions or pricing from other manufacturers, which could limit price discovery and potentially lead to higher costs than if the contract had been competed.

Taxpayer Impact: The sole-source nature of this award means taxpayers may not be benefiting from the most competitive pricing achievable through an open bidding process. This could result in a higher overall expenditure for these specific aircraft modifications.

Public Impact

The primary beneficiaries are the U.S. Air Force, which will receive upgraded MC-130J aircraft. The services delivered include the installation of Increment 3 kits and Auxiliary Flight Deck Stations (AFDS). These upgrades are crucial for maintaining and enhancing the operational capabilities of the MC-130J fleet. The modifications will likely impact aircrews and maintenance personnel who operate and service the aircraft.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Long contract duration may not reflect evolving technological needs or market shifts.
Lack of transparency in the justification for sole-sourcing.
Potential for cost overruns if not closely managed due to lack of competition.

Positive Signals

Firm Fixed Price contract provides cost certainty.
Award to incumbent contractor likely ensures continuity and leverages existing expertise.
Specific nature of kits suggests a tailored solution for critical operational requirements.

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, specifically focusing on modifications and upgrades for existing military aircraft. The market for specialized aerospace components and engineering services is often dominated by a few large, established defense contractors like Lockheed Martin. Spending in this area is driven by the need to maintain and modernize aging fleets, ensuring they meet current and future operational demands. Comparable spending benchmarks would typically involve other ECPs or upgrade programs for similar military platforms.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Lockheed Martin Corporation is a large prime contractor. There is no explicit information provided regarding subcontracting plans for small businesses within this specific award. The impact on the small business ecosystem is likely minimal unless Lockheed Martin actively engages small businesses for specific components or services not covered by this direct award.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Air Force contracting and program management offices. Accountability measures are embedded within the firm fixed-price contract terms, requiring delivery of specified modifications. Transparency is limited due to the sole-source nature and lack of public detail on the justification. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

MC-130J Special Operations Aircraft
Aircraft Modification Programs
Aerospace Engineering Services
Defense Logistics Agency (DLA) Procurement
Air Force Materiel Command (AFMC) Contracts

Risk Flags

Sole-source award
Lack of competitive bidding
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $45.3 million to LOCKHEED MARTIN CORP. MC-130J, FYOC INCREMENT-3 KITS AND AUXILIARY FLIGHT DECK STATION (AFDS) INSTALL ECP 16-00065

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 $45.3 million.

What is the period of performance?

Start: 2017-07-06. End: 2025-04-30.

What is Lockheed Martin Corporation's track record with the MC-130J program and similar aircraft modifications?

Lockheed Martin Corporation is the prime contractor for the MC-130J Commando II, a variant of the C-130J Super Hercules, which is used for special operations missions. Their track record with this platform is extensive, as they are responsible for its initial production and ongoing sustainment. The company has a long history of performing modifications, upgrades, and engineering change proposals (ECPs) on various military aircraft, including C-130 variants. This specific contract, ECP 16-00065 for Increment 3 kits and Auxiliary Flight Deck Station (AFDS) installation, builds upon their established expertise and familiarity with the MC-130J airframe. Their deep understanding of the aircraft's systems and operational requirements makes them a logical, albeit sole-source, provider for such specialized modifications.

How does the $45.3 million contract value compare to similar aircraft modification contracts for the MC-130J or comparable platforms?

Directly comparing the $45.3 million value for MC-130J Increment 3 kits and AFDS installation is challenging without access to proprietary contract data for similar modifications. However, based on general industry knowledge, the cost for specialized avionics, structural modifications, and integration of new systems onto a military aircraft platform can be substantial. The MC-130J is a complex special operations aircraft, and upgrades like Increment 3 often involve significant hardware and software changes. The firm fixed-price nature suggests a defined scope, but the long performance period (July 2017 - April 2025) indicates a phased implementation or a large number of aircraft. Without specific comparable ECPs or kit installations for the MC-130J or similar special mission aircraft (e.g., other C-130 variants, specialized transport aircraft), it's difficult to definitively benchmark this value. However, multi-million dollar contracts for such upgrades are not uncommon in the defense aerospace sector.

What are the primary risks associated with this sole-source contract, and how are they being mitigated?

The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, Lockheed Martin may not have had the same incentive to offer the lowest possible price. Another risk is the potential for scope creep or inefficiencies if the government's requirements are not precisely defined and managed. Mitigation strategies typically involve robust government oversight, detailed contract performance metrics, and negotiation of favorable terms within the sole-source justification. The firm fixed-price (FFP) contract type itself acts as a risk mitigation tool by placing the responsibility for cost overruns on the contractor, provided the scope remains unchanged. However, the government must still ensure the initial price negotiated is fair and reasonable.

What is the expected impact of these Increment 3 kits and AFDS installations on the MC-130J's operational effectiveness?

The Increment 3 kits and Auxiliary Flight Deck Station (AFDS) installations are expected to significantly enhance the operational effectiveness of the MC-130J Commando II. Increment 3 typically refers to a suite of upgrades that improve the aircraft's mission systems, including enhanced communications, navigation, electronic warfare capabilities, and potentially improved situational awareness tools. The AFDS provides an additional workstation in the cockpit, likely for a mission systems operator or navigator, allowing for more complex mission planning and execution, better management of onboard systems, and improved crew coordination. These upgrades are crucial for the MC-130J's role in special operations, enabling it to perform its demanding missions more safely, efficiently, and effectively in contested environments.

How has historical spending on MC-130J modifications evolved, and does this contract represent a continuation or deviation?

Historical spending on MC-130J modifications, including previous increment upgrades (Increment 1, Increment 2) and other ECPs, would likely show a pattern of sustained investment in modernizing the fleet. The MC-130J, being a critical special operations platform, requires continuous upgrades to maintain its technological edge and operational relevance. This $45.3 million contract for Increment 3 kits and AFDS installation appears to be a continuation of this established pattern of investment. It represents the next logical phase in the aircraft's life-cycle modernization program. Without specific historical spending data broken down by modification type and fiscal year, it's difficult to quantify the exact evolution, but the presence of multiple increment upgrades suggests a planned, phased approach to enhancing the aircraft's capabilities over time.

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: $45,763,032

Exercised Options: $45,250,880

Current Obligation: $45,250,880

Subaward Activity

Number of Subawards: 35

Total Subaward Amount: $1,564,925

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