DoD awards $1.87B for C-130J aircraft, with Lockheed Martin as sole source
Contract Overview
Contract Amount: $1,865,607,013 ($1.9B)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2027-09-30
End Date: 2027-04-30
Competition Type: NOT COMPETED
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: C-130J ADD AIRCRAFTS FY22 CONGRESSIONAL
Place of Performance
Location: MARIETTA, COBB County, GEORGIA, 30063
State: Georgia Government Spending
Plain-Language Summary
Department of Defense obligated $1.87 billion to LOCKHEED MARTIN CORP for work described as: C-130J ADD AIRCRAFTS FY22 CONGRESSIONAL Key points: 1. Significant investment in C-130J aircraft fleet expansion. 2. Sole-source award to Lockheed Martin raises competition concerns. 3. Fixed-price incentive contract aims to control costs but requires careful monitoring. 4. Long-term contract extends through 2027, impacting future budget allocations.
Value Assessment
Rating: fair
The total award amount of $1.87 billion for additional C-130J aircraft is substantial. Without comparable contract data for similar aircraft acquisitions, a precise pricing assessment is difficult. However, the fixed-price incentive structure suggests an attempt to balance cost control with performance incentives.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, awarded directly to Lockheed Martin. Sole-source procurement limits price discovery and competitive pressure, potentially leading to higher costs than if multiple vendors had bid.
Taxpayer Impact: Taxpayers may bear a higher cost due to the lack of competition. Oversight is crucial to ensure the price is fair and reasonable for the sole-source acquisition.
Public Impact
Enhances U.S. Air Force airlift capabilities with modern C-130J aircraft. Supports critical military logistics and global deployment operations. Potential for job creation and economic impact within the aerospace sector. Long-term commitment to a specific aircraft platform.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition.
- Potential for cost overruns in fixed-price incentive contracts.
- Long-term commitment may reduce flexibility.
- Lack of transparency in pricing due to no-bid award.
Positive Signals
- Acquisition of a proven and essential airlift platform.
- Contract structure includes incentives for cost control.
- Long-term contract provides supply chain stability.
Sector Analysis
The aerospace and defense sector is characterized by high R&D costs and long production cycles. Major aircraft acquisitions like the C-130J represent significant government spending. Benchmarks for similar large-scale aircraft procurements are often proprietary or difficult to access publicly.
Small Business Impact
This contract was awarded to a large prime contractor, Lockheed Martin. There is no explicit indication of subcontracting opportunities for small businesses within the provided data, which is common for major defense platforms.
Oversight & Accountability
The sole-source nature of this award necessitates robust oversight from the Department of Defense to ensure fair pricing and contract compliance. Regular performance reviews and cost audits will be critical to holding the contractor accountable.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competition may lead to inflated prices.
- Fixed-price incentive contracts can still result in cost overruns.
- Long-term commitment reduces flexibility for future technology adoption.
- Dependence on a single supplier for critical assets.
Tags
aircraft-manufacturing, department-of-defense, ga, delivery-order, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.87 billion to LOCKHEED MARTIN CORP. C-130J ADD AIRCRAFTS FY22 CONGRESSIONAL
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 $1.87 billion.
What is the period of performance?
Start: 2027-09-30. End: 2027-04-30.
What is the historical cost performance of C-130J aircraft acquisitions under similar contract types?
Analyzing historical data for C-130J acquisitions, particularly those with fixed-price incentive clauses, would provide valuable context. Past performance can indicate potential cost trends, the effectiveness of incentive structures in managing expenditures, and whether previous sole-source awards resulted in competitive pricing outcomes.
What are the specific performance metrics and cost targets outlined in the fixed-price incentive contract?
Understanding the precise performance metrics and cost targets is crucial for assessing the contract's effectiveness. This includes identifying the baseline cost, the target profit, the ceiling price, and the sharing ratio for cost variances. These elements dictate how contractor performance and cost savings or overruns are managed and incentivized.
Are there any planned future competitions or opportunities for other vendors to supply C-130J aircraft or related services?
Given this is a sole-source award, it's important to ascertain if future requirements for C-130J aircraft or sustainment services will be competed. Exploring potential competition for follow-on contracts or related support services could mitigate the long-term impact of this non-competitive award and potentially yield better value for the government.
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: FIXED PRICE INCENTIVE (L)
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: $1,865,607,013
Exercised Options: $1,865,607,013
Current Obligation: $1,865,607,013
Subaward Activity
Number of Subawards: 1776
Total Subaward Amount: $632,294,323
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA862520D3000
IDV Type: IDC
Timeline
Start Date: 2027-09-30
Current End Date: 2027-04-30
Potential End Date: 2027-04-30 00:00:00
Last Modified: 2024-09-13
More Contracts from Lockheed Martin Corp
- Federal Contract — $48.1B (Department of Energy)
- TAS::80 0124::TAS Design, Development, Test&evaluation of Project Orion — $15.5B (National Aeronautics and Space Administration)
- 200207!000021!5700!CZ62 !smc/Pkj LOS Angeles AFB !F0470102C0002 !A!N! !N! !20011116!20070630!872978978!196596688!834951691!n!lockheed Martin Corporation !1111 Lockheed Martin WAY !sunnyvale !ca!94089!77000!085!06!sunnyvale !santa Clara !california!+000012250000!n!n!000000000000!ar92!rdte/Space - Other - Applied Research !A2 !missile and Space Systems !3gfk!milstar !541710!E! !1! ! ! ! ! !99990909!B! ! !B! !d!n!j!2!001!n!2a!z!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! — $9.0B (Department of Defense)
- Next Generation Overhead Persistent Infrared Geosynchronous Earth Orbit Space Vehicle 1-3 Phase 1 — $7.3B (Department of Defense)
- Federal Contract — $7.3B (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)