DoD Awards $36.6M C-130J Ordering Contract to Lockheed Martin, No Competition

Contract Overview

Contract Amount: $36,624,471 ($36.6M)

Contractor: Lockheed Martin Corp

Awarding Agency: Department of Defense

Start Date: 2018-12-12

End Date: 2021-04-30

Contract Duration: 870 days

Daily Burn Rate: $42.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FIVE YEAR ORDERING CONTRACT FOR C-130J

Place of Performance

Location: MARIETTA, COBB County, GEORGIA, 30063

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $36.6 million to LOCKHEED MARTIN CORP for work described as: FIVE YEAR ORDERING CONTRACT FOR C-130J Key points: 1. Significant contract value for aircraft manufacturing. 2. Sole-source award to Lockheed Martin raises competition concerns. 3. Potential for higher costs due to lack of competitive bidding. 4. Focus on a critical defense asset, the C-130J aircraft.

Value Assessment

Rating: questionable

The contract value of $36.6M over its period of performance is substantial. However, without competitive bidding, it's difficult to assess if this represents fair market value compared to similar aircraft manufacturing contracts.

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 limits price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for C-130J aircraft or related services.

Public Impact

Impacts the operational readiness of the Air Force's C-130J fleet. Directly benefits Lockheed Martin as the sole provider. Raises questions about the government's procurement strategy for critical defense assets.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for overpricing

Positive Signals

Supports critical defense capabilities
Long-term sustainment of C-130J fleet

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, a key area for defense spending. Benchmarks for similar sole-source aircraft contracts are difficult to establish due to the unique nature of defense platforms.

Small Business Impact

This contract does not appear to involve small business participation, as it is a sole-source award to a large prime contractor.

Oversight & Accountability

Oversight is crucial for sole-source contracts to ensure fair pricing and prevent waste. The Department of the Air Force is responsible for monitoring this contract's performance and cost.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Sole-source award limits competition.
Potential for inflated costs.
Lack of transparency in pricing.
Dependency on a single manufacturer.
Risk of future price increases.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.6 million to LOCKHEED MARTIN CORP. FIVE YEAR ORDERING CONTRACT FOR C-130J

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 $36.6 million.

What is the period of performance?

Start: 2018-12-12. End: 2021-04-30.

What is the justification for awarding this contract on a sole-source basis?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or a lack of viable alternatives. For the C-130J, Lockheed Martin is the original equipment manufacturer, suggesting a reliance on their expertise for specific modifications, upgrades, or sustainment activities that other companies cannot replicate.

How can the government ensure fair pricing without competition?

The government can employ several strategies to ensure fair pricing on sole-source contracts. This includes conducting thorough cost realism analyses, benchmarking against historical data for similar items, negotiating aggressively, and potentially using independent cost estimates. Transparency in pricing components and profit margins is also essential.

What is the long-term risk associated with relying on a single supplier for critical aircraft?

The long-term risk of relying on a single supplier includes potential price escalation, reduced innovation, and vulnerability to supply chain disruptions. If the sole supplier faces financial difficulties or production issues, it could severely impact the government's ability to maintain its fleet, leading to operational readiness challenges.

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

Solicitation ID: FA862519R7006

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: $36,624,471

Exercised Options: $36,624,471

Current Obligation: $36,624,471

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $-458

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