Lockheed Martin awarded $24.2M for C-130J aircraft support, a sole-source contract extension

Contract Overview

Contract Amount: $24,232,628 ($24.2M)

Contractor: Lockheed Martin Corp

Awarding Agency: Department of Defense

Start Date: 2024-12-19

End Date: 2027-03-31

Contract Duration: 832 days

Daily Burn Rate: $29.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: C-130J COMBINED AIRCRAFT DELIVERY DEVELOPMENT INTEGRATION AND ENGINEERING (CADDIE)- C130J- CORE SUPPORT SERVICES- FOLLOW ON

Place of Performance

Location: MARIETTA, COBB County, GEORGIA, 30063

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $24.2 million to LOCKHEED MARTIN CORP for work described as: C-130J COMBINED AIRCRAFT DELIVERY DEVELOPMENT INTEGRATION AND ENGINEERING (CADDIE)- C130J- CORE SUPPORT SERVICES- FOLLOW ON Key points: 1. Contract awarded to incumbent for continued core support services. 2. Sole-source award raises questions about potential cost efficiencies. 3. Long-term contract duration suggests a need for sustained support. 4. Firm-fixed-price structure aims to control costs for the Air Force. 5. Focus on integration and engineering for the C-130J platform. 6. No small business set-aside indicates a focus on specialized capabilities.

Value Assessment

Rating: fair

This contract's value of $24.2 million for C-130J core support services appears to be a continuation of existing services provided by Lockheed Martin. Without competitive bidding, it is difficult to benchmark the pricing against market rates or alternative providers. The firm-fixed-price structure is a positive indicator for cost control, but the lack of competition limits the ability to assess if the government is receiving optimal value for money. Further analysis would require comparing historical pricing for similar support services and understanding the specific technical requirements driving the cost.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis to Lockheed Martin Corporation, the original equipment manufacturer for the C-130J aircraft. This approach suggests that the Air Force determined that only Lockheed Martin possessed the necessary expertise, proprietary data, or infrastructure to provide the required core support services, integration, and engineering. The lack of competition means that price discovery through a bidding process was bypassed, potentially leading to higher costs than if multiple vendors had competed.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without alternative bids, there is less assurance that the negotiated price reflects the lowest possible cost for these essential services.

Public Impact

The U.S. Air Force benefits from continued operational readiness of its C-130J Super Hercules fleet. Services include core support, integration, and engineering for the aircraft. The contract impacts the sustainment and modernization of a critical military transport aircraft. Workforce implications are likely within Lockheed Martin's engineering and support divisions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings.
Lack of competition may reduce incentives for contractor innovation.
Long contract duration could mask inefficiencies if not closely monitored.

Positive Signals

Firm-fixed-price contract provides cost certainty for the Air Force.
Award to incumbent ensures continuity of essential support services.
Focus on integration and engineering supports platform modernization.

Sector Analysis

The C-130J Super Hercules is a key tactical airlifter for military operations worldwide. Lockheed Martin, as the prime contractor, dominates the market for sustainment and specialized support of this platform. This contract falls within the broader aerospace and defense sector, specifically focusing on aircraft manufacturing and support services. Comparable spending benchmarks would involve analyzing other sole-source sustainment contracts for major defense platforms, which often involve significant long-term investments.

Small Business Impact

This contract was not competed with a small business set-aside, indicating that the scope of work likely requires specialized capabilities or proprietary knowledge held by the prime contractor. There is no explicit mention of subcontracting requirements for small businesses within the provided data. This suggests that the primary benefits for small businesses in this context would be indirect, potentially through supply chain opportunities if Lockheed Martin chooses to engage them.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. As a sole-source award, scrutiny may be higher to ensure fair and reasonable pricing. Transparency is facilitated through contract databases, but detailed performance metrics and cost breakdowns may be less publicly available compared to competed contracts. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

C-130J Aircraft Sustainment
Aerospace Engineering Services
Defense Logistics Support
Military Aircraft Manufacturing
Tactical Airlift Programs

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.2 million to LOCKHEED MARTIN CORP. C-130J COMBINED AIRCRAFT DELIVERY DEVELOPMENT INTEGRATION AND ENGINEERING (CADDIE)- C130J- CORE SUPPORT SERVICES- FOLLOW ON

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 $24.2 million.

What is the period of performance?

Start: 2024-12-19. End: 2027-03-31.

What is Lockheed Martin's track record with C-130J support contracts?

Lockheed Martin Corporation is the original equipment manufacturer (OEM) for the C-130J Super Hercules aircraft and has historically been the sole provider of its sustainment, integration, and engineering support. Their track record is extensive, encompassing decades of experience with the C-130 family of aircraft. This includes managing complex supply chains, providing technical expertise, and ensuring aircraft availability for global military operations. Past performance reviews and program execution data from the Air Force would offer a more granular assessment of their specific performance on previous C-130J support contracts, including on-time delivery, quality of service, and responsiveness to Air Force needs.

How does the $24.2 million value compare to similar C-130J support contracts?

Benchmarking the $24.2 million value requires comparing it to similar sole-source or competitively awarded contracts for C-130J core support, integration, and engineering services. Given that this is a follow-on contract with a defined period of performance (ending March 31, 2027), the annual value is approximately $7.7 million ($24.2M / ~3.1 years). Without access to historical contract data for this specific service or comparable contracts from other branches or allies operating the C-130J, it's challenging to definitively assess if this represents good value. Sole-source awards often carry a premium, so a direct comparison to a competitive bid would be ideal but is not available here.

What are the primary risks associated with this sole-source contract?

The primary risk associated with this sole-source contract is the potential for inflated costs due to the lack of competitive bidding. Without market pressure, Lockheed Martin may not be incentivized to offer the lowest possible price. Another risk is contractor lock-in, where the government becomes overly reliant on a single provider, making it difficult and costly to switch vendors in the future. Performance risk also exists, although mitigated by Lockheed Martin's OEM status; any degradation in service quality or delivery could impact C-130J operational readiness. Ensuring robust oversight and clear performance metrics is crucial to mitigate these risks.

How effective is the firm-fixed-price (FFP) contract type in managing costs for this service?

The firm-fixed-price (FFP) contract type is generally considered effective for managing costs when the scope of work is well-defined and the risks of cost overruns can be reasonably predicted. For core support services, integration, and engineering, FFP provides cost certainty to the Air Force, as the contractor assumes the risk of cost overruns. This structure incentivizes the contractor to control costs efficiently to maximize profit. However, the effectiveness is contingent on the initial price being fair and reasonable, which is a key consideration in sole-source negotiations. If the baseline price is too high, FFP will simply lock in that higher cost.

What are the historical spending patterns for C-130J support services by the Department of Defense?

Historical spending patterns for C-130J support services by the Department of Defense have consistently involved significant, long-term investments, primarily directed towards Lockheed Martin as the OEM. These contracts typically cover a range of sustainment activities, including spare parts, technical support, software updates, and engineering services necessary to maintain the operational readiness of the fleet. Spending often escalates over the life cycle of the aircraft as components age and require more intensive maintenance or upgrades. Analyzing annual spending trends over the past decade would reveal the overall investment in the C-130J program and the proportion allocated to sustainment versus procurement or modernization.

What is the significance of the contract's end date (2027-03-31) in relation to the C-130J's service life?

The contract's end date of March 31, 2027, signifies the planned duration for the current phase of core support services, integration, and engineering for the C-130J aircraft. The C-130J Super Hercules has an expected service life that extends well beyond 2027, with many aircraft projected to remain operational into the 2030s and beyond. Therefore, this contract represents a segment of the ongoing sustainment effort required to keep the fleet mission-capable throughout its extended lifespan. The Air Force will likely need to plan for subsequent contract actions or modifications to ensure continuous support beyond this date, potentially including upgrades or life-extension programs.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: SPECIAL STUDIES/ANALYSIS, NOT R&D › SPECIAL STUDIES - NOT R and D

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: $43,736,927

Exercised Options: $24,232,628

Current Obligation: $24,232,628

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