DoD's $1.56B C-130J Aircraft Program Awarded to Lockheed Martin Faces Limited Competition
Contract Overview
Contract Amount: $1,564,462,687 ($1.6B)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2028-12-31
End Date: 2028-12-31
Competition Type: NOT COMPETED
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: C-130J COMBINED AIRCRAFT DELIVERY DEVELOPMENT INTEGRATION AND ENGINEERING (CADDIE) FY23 C-130J CONGRESSIONAL ADD AIRCRAFT
Place of Performance
Location: MARIETTA, COBB County, GEORGIA, 30063
State: Georgia Government Spending
Plain-Language Summary
Department of Defense obligated $1.56 billion to LOCKHEED MARTIN CORP for work described as: C-130J COMBINED AIRCRAFT DELIVERY DEVELOPMENT INTEGRATION AND ENGINEERING (CADDIE) FY23 C-130J CONGRESSIONAL ADD AIRCRAFT Key points: 1. Significant investment in C-130J aircraft development and integration. 2. Sole-source award to Lockheed Martin raises concerns about price discovery. 3. Long-term contract duration (ending 2028) requires ongoing oversight. 4. Focus on aircraft manufacturing sector, a key defense industry segment.
Value Assessment
Rating: questionable
The contract value is substantial at $1.56 billion. Without competitive bidding, it's difficult to assess if this price represents fair value compared to potential alternatives or market rates for similar aircraft development and integration services.
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 mechanisms and potentially leads to higher costs for taxpayers as there is no direct competition to drive down prices.
Taxpayer Impact: The lack of competition in this large contract could result in taxpayers paying a premium for the C-130J aircraft development and integration.
Public Impact
Ensures continued modernization and capability of the C-130J fleet for the Air Force. Supports a major defense contractor and its associated supply chain. Potential for cost overruns due to sole-source nature requires vigilance. Long-term commitment impacts future budget allocations for aircraft procurement.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of price competition
- Long contract duration
Positive Signals
- Supports critical defense capability
- Investment in established aircraft platform
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, a critical component of the defense industrial base. Spending benchmarks for similar large-scale aircraft development and integration programs are typically in the hundreds of millions to billions of dollars, aligning with this award's scale.
Small Business Impact
The data provided does not indicate any specific set-asides or participation goals for small businesses in this contract. As a sole-source award to a large prime contractor, opportunities for small businesses may be limited unless subcontracted.
Oversight & Accountability
The long duration and sole-source nature of this contract necessitate robust oversight from the Department of Defense to ensure cost control, performance, and adherence to contract terms. Regular reviews and audits will be crucial.
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 pricing due to lack of competition.
- Long contract duration increases long-term financial commitment.
- Requires strong government oversight to manage costs and performance.
- Fixed-price incentive structure may not be optimal without competitive baseline.
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 $1.56 billion to LOCKHEED MARTIN CORP. C-130J COMBINED AIRCRAFT DELIVERY DEVELOPMENT INTEGRATION AND ENGINEERING (CADDIE) FY23 C-130J CONGRESSIONAL ADD AIRCRAFT
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 $1.56 billion.
What is the period of performance?
Start: 2028-12-31. End: 2028-12-31.
What is the justification for the sole-source award, and what steps are being taken to ensure fair pricing?
The justification for a sole-source award typically involves unique capabilities or circumstances. The Department of Defense should have documented reasons for not competing this contract. To ensure fair pricing, mechanisms like cost realism analyses, independent government cost estimates, and robust negotiation strategies are essential, even in sole-source situations.
What are the potential risks associated with a fixed-price incentive contract awarded on a sole-source basis for aircraft development?
A fixed-price incentive contract aims to share risk and reward between the government and contractor. However, on a sole-source basis, the government lacks a competitive benchmark to set the target price effectively. Risks include the contractor having less incentive to control costs if the target price is set too high, and potential for disputes over cost variances if initial estimates are inaccurate.
How will the effectiveness of the CADDIE program be measured, particularly given the lack of competitive pressure?
Effectiveness will be measured through defined performance metrics and milestones outlined in the contract. These likely include on-time delivery, adherence to technical specifications, successful integration of new capabilities, and operational readiness of the aircraft. The Air Force must diligently track these metrics and hold Lockheed Martin accountable for meeting program objectives.
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: $1,564,462,687
Exercised Options: $1,564,462,687
Current Obligation: $1,564,462,687
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: 2028-12-31
Current End Date: 2028-12-31
Potential End Date: 2028-12-31 00:00:00
Last Modified: 2025-08-01
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