DoD awards $43.4M for MC-130 Terrain Following Kits, citing sole-source justification

Contract Overview

Contract Amount: $43,421,566 ($43.4M)

Contractor: Lockheed Martin Corp

Awarding Agency: Department of Defense

Start Date: 2022-04-12

End Date: 2026-07-31

Contract Duration: 1,571 days

Daily Burn Rate: $27.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MC-130 TERRAIN FOLLOWING KITS LOW RATE INITIAL PRODUCTION II

Place of Performance

Location: MARIETTA, COBB County, GEORGIA, 30063

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $43.4 million to LOCKHEED MARTIN CORP for work described as: MC-130 TERRAIN FOLLOWING KITS LOW RATE INITIAL PRODUCTION II Key points: 1. Contract awarded to Lockheed Martin Corp for aircraft manufacturing. 2. Significant duration of 1571 days suggests a long-term need for these specialized kits. 3. The contract is a Firm Fixed Price type, which shifts cost risk to the contractor. 4. Awarded by the Department of the Air Force, indicating a specific military application. 5. The contract is not competed, raising questions about potential cost efficiencies. 6. The base value of $43.4M is substantial, requiring careful oversight.

Value Assessment

Rating: questionable

Benchmarking the value of these specialized terrain following kits is challenging without detailed cost breakdowns or comparisons to similar sole-source procurements. The firm fixed price structure is generally favorable for the government in managing cost overruns. However, the lack of competition prevents a direct assessment of whether the price reflects the best possible value achievable in a competitive market. Further analysis would require understanding the unique technical requirements and the availability of alternative solutions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. The justification for this approach is not provided in the data, but it typically arises when only one responsible source can provide the required supplies or services. The absence of competition means there was no opportunity for multiple bidders to offer proposals, which can limit price discovery and potentially lead to higher costs for the government.

Taxpayer Impact: The lack of competition means taxpayers may not be benefiting from the most cost-effective pricing that could have been achieved through a competitive bidding process.

Public Impact

The primary beneficiaries are the U.S. Air Force personnel who will operate MC-130 aircraft equipped with these terrain following kits. The services delivered include the manufacturing and delivery of specialized aircraft components. The geographic impact is primarily within the United States, where the contractor is based and potentially where the aircraft are operated. There are potential workforce implications for the aerospace manufacturing sector, particularly for Lockheed Martin's facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source awards can reduce government leverage in negotiations.
Limited transparency into the cost justification for this specific award.

Positive Signals

Firm Fixed Price contract type protects against cost overruns.
Award to a known contractor (Lockheed Martin) may indicate reliability.
Long contract duration suggests a sustained operational need being met.

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, a critical component of the broader aerospace and defense industry. The market for specialized aircraft components, such as terrain following kits, is often characterized by high barriers to entry due to technical expertise and proprietary technology. Spending in this sector is heavily influenced by defense budgets and strategic priorities. Comparable spending benchmarks would typically involve other sole-source or limited-competition awards for similar advanced military aircraft systems.

Small Business Impact

This contract does not appear to include a small business set-aside. Given the specialized nature of aircraft manufacturing and the sole-source award to a large prime contractor like Lockheed Martin, the direct impact on small businesses through set-asides is unlikely. However, Lockheed Martin may engage small businesses as subcontractors, which would be a secondary channel for small business participation.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures would be tied to the delivery schedule and performance specifications outlined in the contract. Transparency is limited due to the sole-source nature of the award; however, contract awards are generally reported in federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

MC-130 Aircraft Modifications
Aircraft Component Manufacturing
Defense Logistics Agency Procurement
Air Force Special Operations Command Equipment

Risk Flags

Sole-source award lacks competitive pricing.
Potential for cost overruns if not adequately managed.
Limited transparency into the justification for non-competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $43.4 million to LOCKHEED MARTIN CORP. MC-130 TERRAIN FOLLOWING KITS LOW RATE INITIAL PRODUCTION II

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 $43.4 million.

What is the period of performance?

Start: 2022-04-12. End: 2026-07-31.

What is the specific technical capability provided by the MC-130 TERRAIN FOLLOWING KITS?

The MC-130 TERRAIN FOLLOWING KITS are specialized systems designed to enable MC-130 aircraft to fly at very low altitudes, following the contours of the terrain. This capability is crucial for special operations missions that require low-observable, high-speed ingress and egress, often in challenging environments. The kits likely integrate advanced radar, GPS, and flight control systems to provide pilots with the necessary situational awareness and automated flight control to maintain safe clearance from the ground while navigating complex topography. The 'LOW RATE INITIAL PRODUCTION II' designation suggests this is a follow-on phase after initial development and testing, indicating the system has progressed towards full-scale production.

Why was this contract awarded on a sole-source basis instead of being competed?

The provided data indicates the contract was 'NOT COMPETED,' implying a sole-source award. While the specific justification is not detailed, common reasons for sole-source procurements in defense include: 1) Unique capabilities: Only one contractor possesses the necessary technology, intellectual property, or specialized facilities. 2) Urgent need: A critical operational requirement that cannot be met through a lengthy competitive process. 3) Follow-on production: When a system has been developed competitively, continuing with the original developer for production can sometimes be more efficient if they possess unique knowledge or tooling. Without further documentation from the Department of Defense, the precise rationale remains speculative, but it suggests a belief that Lockheed Martin is the only viable source for these specific kits at this time.

How does the $43.4 million award compare to historical spending on similar terrain following systems?

Direct comparison of this $43.4 million award to historical spending on similar terrain following systems is difficult without access to detailed historical procurement data for comparable systems across different platforms and time periods. However, the award amount suggests a significant investment in enhancing the low-altitude flight capabilities of the MC-130 fleet. The 'LOW RATE INITIAL PRODUCTION II' designation implies that this is not the first expenditure on these kits, and there may have been prior development or initial production contracts. To establish a benchmark, one would need to analyze the unit cost, quantity, and complexity of terrain following systems procured for other aircraft types or previous generations of the MC-130.

What are the potential risks associated with a sole-source contract of this magnitude?

Sole-source contracts, especially those of significant value like $43.4 million, carry inherent risks. The primary risk is the potential for inflated pricing due to the absence of competitive pressure. Without competing bids, the government may pay more than it would in a market where multiple suppliers vie for the contract. Another risk is reduced innovation, as the sole provider may have less incentive to improve the product or process. Furthermore, there's a risk of vendor lock-in, where the government becomes dependent on a single supplier, potentially limiting future options or increasing long-term costs. Effective oversight and negotiation are critical to mitigate these risks.

What is Lockheed Martin's track record with producing advanced aircraft components for the Department of Defense?

Lockheed Martin Corporation has an extensive and long-standing track record of producing advanced aircraft and complex systems for the Department of Defense (DoD). They are a major defense contractor involved in numerous high-profile programs, including fighter jets (like the F-35), transport aircraft, and specialized mission platforms. Their experience encompasses the full lifecycle of defense systems, from research and development to manufacturing, sustainment, and upgrades. Given their significant role in military aviation, it is highly probable that they possess the necessary expertise, facilities, and security clearances to manufacture specialized components like the MC-130 TERRAIN FOLLOWING KITS, contributing to their potential selection as a sole-source provider.

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: $43,509,673

Exercised Options: $43,509,673

Current Obligation: $43,421,566

Subaward Activity

Number of Subawards: 22

Total Subaward Amount: $3,040,298

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