DoD awards $14.9M for MH47G BLK II NRE Engineer Support to Lockheed Martin

Contract Overview

Contract Amount: $14,900,757 ($14.9M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2021-09-17

End Date: 2025-05-15

Contract Duration: 1,336 days

Daily Burn Rate: $11.2K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: MH47G BLK II NRE ENGINEER SUPPORT

Place of Performance

Location: LEXINGTON, FAYETTE County, KENTUCKY, 40516

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $14.9 million to LOCKHEED MARTIN CORPORATION for work described as: MH47G BLK II NRE ENGINEER SUPPORT Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 3. Performance period extends over 1336 days, indicating a long-term need for these engineering services. 4. The contract is for NRE (Non-Recurring Engineering) support, crucial for initial development phases. 5. The award is a Delivery Order, implying it's part of a larger contract vehicle. 6. The contractor, Lockheed Martin, is a major defense contractor with extensive experience.

Value Assessment

Rating: fair

Benchmarking the value of this specific NRE engineering support contract is challenging without detailed scope of work and comparable project data. The Cost Plus Fixed Fee (CPFF) structure means the government pays the actual costs plus a fixed fee, which can sometimes incentivize contractors to incur higher costs to increase the fee base, though the fixed fee component aims to cap profit. Without specific performance metrics or comparisons to similar NRE efforts within the DoD or other agencies, it's difficult to definitively assess value for money. However, the duration and nature of NRE suggest a significant investment in foundational engineering.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but this method generally fosters a competitive environment, which can lead to better pricing and terms for the government. The open competition suggests that the government sought the best possible solution and price from the market.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it maximizes the potential for cost savings through a robust bidding process, ensuring that multiple companies vie for the contract.

Public Impact

The U.S. Special Operations Command benefits from specialized engineering support for the MH47G Black Hawk helicopter program. This contract ensures the continued development and sustainment of critical aviation capabilities for special operations forces. The services delivered are engineering support, likely involving design, testing, and integration for aircraft modifications or upgrades. The geographic impact is primarily within Kentucky (where the contractor may be located or where the work is performed), but the ultimate beneficiaries are U.S. Special Operations forces nationwide. Workforce implications include employment for engineers and technical specialists at Lockheed Martin and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts carry inherent risks of cost escalation if not rigorously managed.
Lack of specific competition details (number of bidders) limits a full assessment of price discovery.
NRE contracts can be complex, requiring close government oversight to ensure alignment with program objectives.

Positive Signals

Awarded under full and open competition, indicating a broad market search.
Lockheed Martin is a reputable and experienced defense contractor with a proven track record.
The contract addresses a specific, long-term engineering need for a critical defense asset.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically supporting aviation systems. The market for specialized engineering services for military aircraft is dominated by large defense contractors like Lockheed Martin. Spending in this area is driven by the need for technological advancement, modernization of aging fleets, and adaptation to evolving mission requirements. Comparable spending benchmarks would involve other NRE contracts for similar complex military platforms.

Small Business Impact

The data indicates that small business participation was not a primary set-aside consideration for this specific contract (ss: false, sb: false). While Lockheed Martin is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting would depend on Lockheed Martin's own sourcing strategies and the specific technical requirements of the NRE engineering support.

Oversight & Accountability

Oversight for this contract would primarily reside with the U.S. Special Operations Command (SOCOM) contracting and program management offices. Given the CPFF structure, rigorous financial oversight and progress monitoring are essential to ensure costs are reasonable and allocable to the contract. Transparency is typically managed through contract reporting requirements and milestone reviews. The Department of Defense's Inspector General may also conduct audits or investigations as deemed necessary.

Related Government Programs

MH-60 Black Hawk Helicopter Program
Special Operations Aviation
Defense Engineering Services
Aerospace Research and Development
Aircraft Modernization Programs

Risk Flags

Cost Plus Fixed Fee contract type requires careful monitoring to manage potential cost overruns.
Long contract duration necessitates sustained oversight to ensure continued alignment with evolving requirements.
NRE contracts can be susceptible to scope creep if not clearly defined and managed.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.9 million to LOCKHEED MARTIN CORPORATION. MH47G BLK II NRE ENGINEER 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 $14.9 million.

What is the period of performance?

Start: 2021-09-17. End: 2025-05-15.

What is Lockheed Martin's track record with similar Cost Plus Fixed Fee (CPFF) contracts for NRE engineering support within the Department of Defense?

Lockheed Martin, as one of the largest defense contractors globally, has extensive experience with CPFF contracts for Non-Recurring Engineering (NRE) support across numerous platforms. Their track record typically involves managing complex development projects where the final costs are not precisely predictable at the outset. While CPFF contracts offer flexibility, they require robust government oversight to manage costs effectively and prevent scope creep. Historical data suggests that while Lockheed Martin generally performs well, specific contract performance can vary based on program complexity, government oversight intensity, and market conditions. Analyzing past CPFF awards to Lockheed Martin for similar engineering services would reveal trends in cost performance, adherence to schedule, and overall program success metrics, providing context for the current award's potential outcomes.

How does the awarded amount of $14.9 million compare to typical NRE engineering support contracts for similar military aviation platforms?

Comparing the $14.9 million award for MH47G BLK II NRE Engineer Support requires context regarding the scope and duration of the work. NRE contracts are inherently variable; they fund the initial, non-repeating engineering efforts needed to develop or significantly modify a system. For complex military helicopters like the MH47G, which may involve advanced avionics, structural modifications, or mission system integration, $14.9 million over approximately 3.5 years (2021-2025) could represent a moderate investment. Larger, more comprehensive NRE efforts for entirely new aircraft designs or major system overhauls can easily run into hundreds of millions or even billions of dollars. Conversely, smaller, targeted upgrades or sustainment engineering tasks might fall below this amount. Without a detailed breakdown of the specific engineering tasks included in this delivery order, precise benchmarking is difficult, but it appears to be a focused investment within the broader lifecycle of a significant military asset.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type used for this award?

The primary risk with Cost Plus Fixed Fee (CPFF) contracts, like the one awarded to Lockheed Martin, is the potential for cost overruns. In a CPFF structure, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fixed fee provides some incentive for the contractor to control costs (as their profit is capped), it does not directly link profit to cost savings. If costs escalate significantly due to unforeseen technical challenges, scope creep, or inefficient performance, the government bears the brunt of these increased expenses. The government's risk is that the total cost of the contract could exceed initial estimates, potentially impacting budget allocations. Effective risk mitigation relies heavily on stringent government oversight, clear definition of work, robust cost accounting standards, and regular performance reviews to ensure costs remain reasonable and allocable to the contract.

What does the 'NRE Engineer Support' designation imply about the nature and purpose of this contract?

The designation 'NRE Engineer Support' signifies that this contract is for Non-Recurring Engineering. NRE refers to the one-time engineering efforts required to design, develop, test, and integrate new systems or significant modifications to existing ones. This is distinct from recurring engineering, which involves ongoing support, maintenance, or minor updates. For the MH47G BLK II program, this contract likely funds activities such as initial design studies, prototyping, system integration, performance testing, and validation of new capabilities or components. It represents an investment in the foundational engineering required to bring about a specific advancement or capability enhancement for the aircraft, rather than routine operational support.

How does the contract's duration (1336 days) and end date (May 2025) inform the assessment of its strategic importance to the U.S. Special Operations Command?

The contract duration of 1336 days, spanning from September 2021 to May 2025, indicates a significant, multi-year commitment by the U.S. Special Operations Command (SOCOM) for specialized engineering support. This extended timeline suggests that the NRE engineering tasks are substantial and complex, requiring sustained effort rather than a short-term project. The end date implies that the planned engineering activities are expected to conclude or reach a major milestone within this period, potentially leading to a new phase of production, deployment, or sustainment. Such a long-term investment underscores the strategic importance SOCOM places on the MH47G BLK II program and the specific engineering advancements or capabilities this contract is intended to deliver for special operations missions.

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: $14,900,757

Exercised Options: $14,900,757

Current Obligation: $14,900,757

Actual Outlays: $267,807

Subaward Activity

Number of Subawards: 20

Total Subaward Amount: $1,211,704

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