DoD awards $27.1M for C-130J spares and support to Lockheed Martin, citing foreign military sales

Contract Overview

Contract Amount: $27,113,699 ($27.1M)

Contractor: Lockheed Martin Corp

Awarding Agency: Department of Defense

Start Date: 2017-02-23

End Date: 2023-08-31

Contract Duration: 2,380 days

Daily Burn Rate: $11.4K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: C-130J, FOREIGN MILITARY SALES FRANCE, SPARES AND SUPPORT EQUIPMENT UNDEFINITIZED CONTRACT ACTION

Place of Performance

Location: MARIETTA, COBB County, GEORGIA, 30063

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $27.1 million to LOCKHEED MARTIN CORP for work described as: C-130J, FOREIGN MILITARY SALES FRANCE, SPARES AND SUPPORT EQUIPMENT UNDEFINITIZED CONTRACT ACTION Key points: 1. Contract awarded for essential C-130J aircraft components and support. 2. Sole-source award to Lockheed Martin, the original equipment manufacturer. 3. Foreign Military Sales (FMS) designation indicates international customer involvement. 4. Contract duration spans over six years, suggesting long-term support needs. 5. Undefinitized Contract Action (UCA) implies initial agreement before final terms. 6. Focus on spares and support equipment highlights sustainment and readiness.

Value Assessment

Rating: fair

This contract for C-130J spares and support equipment was awarded as a sole-source Undefinitized Contract Action (UCA). While the total value is $27.1 million, the lack of competition and the UCA status make a direct value-for-money assessment challenging without further details on pricing negotiations and definitization. Benchmarking against similar FMS support contracts for this aircraft type would be necessary to determine if the pricing is competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis to Lockheed Martin Corporation. As the original manufacturer of the C-130J aircraft, Lockheed Martin is typically the only source for specialized spares and support equipment. The lack of competition is expected given the nature of the product, but it limits the government's ability to leverage market forces for potentially better pricing.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive bidding, as the government relies on Lockheed Martin's pricing without alternative proposals.

Public Impact

Benefits the French Air Force through the provision of critical C-130J aircraft spares and support. Ensures the operational readiness and sustainment of French C-130J transport aircraft. Supports the U.S. foreign policy objective of providing military aid and equipment to allies. Indirectly supports the U.S. aerospace and defense industrial base through continued demand for Lockheed Martin products.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to sole-source nature and UCA status.
Risk of pricing not being fully optimized without competitive pressure.
Dependency on a single contractor for critical aircraft components.

Positive Signals

Addresses critical sustainment needs for a key allied airframe.
Supports a vital U.S. foreign military sales program.
Awarded to the original equipment manufacturer, ensuring technical compatibility and quality.

Sector Analysis

The C-130J Super Hercules is a vital tactical airlifter used by numerous military forces worldwide. The market for its specialized spares and support equipment is inherently limited, primarily dominated by the original equipment manufacturer, Lockheed Martin. This contract falls within the broader aerospace and defense sector, specifically focusing on aircraft sustainment and logistics. Comparable spending benchmarks would likely involve other FMS contracts for similar aircraft support packages.

Small Business Impact

This contract was awarded directly to Lockheed Martin Corporation and does not appear to include specific small business set-aside provisions. Given the sole-source nature and the specialized components involved, it is unlikely that significant subcontracting opportunities for small businesses would be mandated within this specific award. The primary impact on the small business ecosystem would be indirect, through Lockheed Martin's broader supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and financial management oversight mechanisms. As an FMS case, there are also oversight responsibilities involving the international partner (France) and potentially the Defense Contract Management Agency (DCMA). Transparency regarding the definitization of the UCA and the final pricing structure will be key to assessing accountability.

Related Government Programs

Foreign Military Sales Program
C-130J Super Hercules Aircraft Sustainment
Aircraft Parts and Auxiliary Equipment Manufacturing
Defense Logistics and Support Services

Risk Flags

Undefinitized Contract Action (UCA)
Sole-Source Award
Potential for Cost Growth
Limited Price Competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.1 million to LOCKHEED MARTIN CORP. C-130J, FOREIGN MILITARY SALES FRANCE, SPARES AND SUPPORT EQUIPMENT UNDEFINITIZED CONTRACT ACTION

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 $27.1 million.

What is the period of performance?

Start: 2017-02-23. End: 2023-08-31.

What is the typical process for definitizing an Undefinitized Contract Action (UCA) for foreign military sales, and what are the key milestones?

Definitizing a UCA for foreign military sales involves a negotiation process between the U.S. government (acting on behalf of the international partner) and the contractor, Lockheed Martin. The initial UCA provides authority to proceed with work while final terms, including price and delivery schedules, are negotiated. Key milestones include the contractor submitting a definitive proposal, government review and negotiation of the proposal, and ultimately, the execution of a definitive contract. This process aims to establish a fair and reasonable price and ensure all contractual requirements are clearly defined. Delays in definitization can lead to increased costs and administrative burden.

How does the 'Foreign Military Sales' designation impact the pricing and oversight of this contract compared to a domestic U.S. military contract?

The Foreign Military Sales (FMS) designation means the U.S. government is procuring these spares and support equipment on behalf of France. This typically involves a 'cost-plus-fixed-fee' or 'firm-fixed-price' arrangement where the U.S. government aims to secure pricing comparable to what it would pay for its own procurements, often with a small administrative surcharge. Oversight involves ensuring the price is fair and reasonable to both the U.S. taxpayer (who fronts the initial cost) and the international partner. The FMS process has specific regulations and oversight bodies, like the Defense Security Cooperation Agency (DSCA), to manage these international transactions, potentially adding layers of review but also ensuring adherence to international agreements.

What are the potential risks associated with awarding an Undefinitized Contract Action (UCA) for aircraft spares and support equipment?

The primary risk with a UCA is the uncertainty surrounding the final price and terms until the contract is definitized. This can lead to potential cost growth if negotiations are protracted or if initial estimates prove inaccurate. For aircraft spares and support, there's also a risk that the contractor may not prioritize definitization, potentially delaying final cost reconciliation. Furthermore, the government lacks the full leverage of competitive bidding during the initial performance period, which could impact price negotiations. Ensuring timely definitization and robust negotiation is crucial to mitigate these risks and secure fair pricing.

Can the government benchmark the pricing of these C-130J spares and support equipment against other similar contracts or market data?

Benchmarking the pricing for specialized C-130J spares and support equipment can be challenging, especially given the sole-source nature of this award. The government would typically look at historical pricing for similar items procured under previous contracts, both for the U.S. Air Force and other FMS customers. Data from industry price lists, if available and applicable, could also be used. However, the unique configurations, quantities, and specific support services included in this contract may limit the direct comparability of benchmark data. The negotiation process during definitization is critical for establishing a price that is considered fair and reasonable based on available cost and pricing information.

What is Lockheed Martin's track record in fulfilling C-130J support contracts, particularly under FMS arrangements?

Lockheed Martin has a long-standing track record as the original equipment manufacturer (OEM) for the C-130 family of aircraft, including the C-130J. They are the primary, and often sole, provider of specialized spares, technical data, and support services for this platform. Their experience with FMS arrangements is extensive, as they regularly supply military aircraft and support packages to international partners. While specific performance metrics for every FMS contract are not publicly detailed, Lockheed Martin's continued role as the OEM suggests a generally reliable, albeit often costly, ability to meet the sustainment needs of C-130J operators globally.

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: $27,113,699

Exercised Options: $27,113,699

Current Obligation: $27,113,699

Subaward Activity

Number of Subawards: 126

Total Subaward Amount: $10,325,539

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