DoD's $33M MH-47G Support Contract Awarded to Lockheed Martin Amidst Full and Open Competition
Contract Overview
Contract Amount: $33,063,488 ($33.1M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2018-12-06
End Date: 2023-08-31
Contract Duration: 1,729 days
Daily Burn Rate: $19.1K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: IGF::OT::IGF MH-47G BLOCK II LOT 1 INDUCTION SUPPORT
Place of Performance
Location: LEXINGTON, FAYETTE County, KENTUCKY, 40516
State: Kentucky Government Spending
Plain-Language Summary
Department of Defense obligated $33.1 million to LOCKHEED MARTIN CORPORATION for work described as: IGF::OT::IGF MH-47G BLOCK II LOT 1 INDUCTION SUPPORT Key points: 1. The contract awarded to Lockheed Martin for MH-47G Block II induction support represents a significant investment in specialized aviation capabilities. 2. Full and open competition was utilized, suggesting a robust market for these services, though the specific impact on pricing requires further analysis. 3. The cost-plus-fixed-fee contract type introduces potential for cost overruns, a key risk factor for taxpayer funds. 4. The sector is dominated by large aerospace and defense contractors, with limited opportunities for smaller specialized firms in this niche.
Value Assessment
Rating: fair
The Cost Plus Fixed Fee (CPFF) contract type can lead to higher final costs compared to fixed-price contracts if not managed diligently. Benchmarking against similar specialized aviation support contracts is difficult due to the unique nature of the MH-47G platform.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. This method generally promotes competitive pricing, but the CPFF structure may temper the direct price discovery benefits.
Taxpayer Impact: Taxpayer funds are utilized for specialized military aviation support. The CPFF structure necessitates close oversight to ensure cost efficiency and prevent unnecessary expenditure.
Public Impact
Ensures continued operational readiness for critical MH-47G aircraft used by U.S. Special Operations Command. Supports advanced helicopter maintenance and modernization efforts, crucial for maintaining technological superiority. Potential for job creation within the aerospace and defense sector, particularly in Kentucky where the work is performed.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type increases risk of cost overruns.
- Limited visibility into specific performance metrics and cost drivers.
- Dependence on a single prime contractor for critical support services.
Positive Signals
- Awarded through full and open competition, suggesting market availability.
- Supports critical national security assets.
- Long-term contract duration ensures sustained support.
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on specialized aviation support services. Spending in this area is often driven by national security requirements and technological advancements, with significant investments typically made by the Department of Defense.
Small Business Impact
While the prime contractor is Lockheed Martin, a large aerospace corporation, the contract details do not specify subcontracting opportunities for small businesses. Specialized aviation support often requires unique capabilities that may limit small business involvement.
Oversight & Accountability
The Department of Defense, through U.S. Special Operations Command, is responsible for overseeing this contract. The CPFF structure necessitates robust oversight mechanisms to monitor costs and ensure performance aligns with contract requirements and taxpayer interests.
Related Government Programs
- All Other Support Services
- Department of Defense Contracting
- U.S. Special Operations Command Programs
Risk Flags
- Cost Plus Fixed Fee contract type.
- Potential for cost overruns.
- Limited visibility into specific performance metrics.
- Dependence on a single prime contractor for critical support.
Tags
all-other-support-services, department-of-defense, ky, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $33.1 million to LOCKHEED MARTIN CORPORATION. IGF::OT::IGF MH-47G BLOCK II LOT 1 INDUCTION SUPPORT
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (U.S. Special Operations Command).
What is the total obligated amount?
The obligated amount is $33.1 million.
What is the period of performance?
Start: 2018-12-06. End: 2023-08-31.
What specific performance metrics are in place to ensure the value derived from this Cost Plus Fixed Fee contract aligns with the funds expended?
The contract details provided do not explicitly outline specific performance metrics. However, Cost Plus Fixed Fee contracts typically include clauses for performance standards and deliverables. The effectiveness of value realization hinges on diligent oversight by the U.S. Special Operations Command to ensure that the fixed fee is justified by the contractor's performance and that costs remain reasonable and allocable.
Given the specialized nature of MH-47G support, what are the primary risks associated with relying on Lockheed Martin, and how are these mitigated?
The primary risk is potential cost escalation due to the CPFF structure and the specialized, potentially proprietary, nature of the support. Mitigation strategies likely involve stringent cost accounting standards, regular audits, and performance reviews by the contracting agency. The reliance on a single prime contractor also poses a risk if they face production issues or financial instability, necessitating contingency planning by the DoD.
How does the utilization of full and open competition for this specialized aviation support impact the long-term cost-effectiveness for the government?
Full and open competition theoretically drives down prices by encouraging multiple bidders. For specialized services like MH-47G support, it ensures that the government accesses the most capable providers at competitive rates, even if the final contract type (CPFF) has inherent cost risks. This approach helps establish a benchmark for future procurements and prevents vendor lock-in, contributing to long-term cost-effectiveness.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Other Support Services › All Other Support Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: H9225416R0001
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 5749 BRIAR HILL RD, LEXINGTON, KY, 40516
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: $33,063,488
Exercised Options: $33,063,488
Current Obligation: $33,063,488
Subaward Activity
Number of Subawards: 14
Total Subaward Amount: $-7,276,862
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: H9225417D0001
IDV Type: IDC
Timeline
Start Date: 2018-12-06
Current End Date: 2023-08-31
Potential End Date: 2023-08-31 00:00:00
Last Modified: 2025-12-09
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