DoD's $8.5M MH-60M Kitting Contract Awarded to Lockheed Martin Under Full and Open Competition

Contract Overview

Contract Amount: $8,494,956 ($8.5M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2022-10-24

End Date: 2024-10-04

Contract Duration: 711 days

Daily Burn Rate: $11.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: MH60M KITTING #1

Place of Performance

Location: LEXINGTON, FAYETTE County, KENTUCKY, 40516

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $8.5 million to LOCKHEED MARTIN CORPORATION for work described as: MH60M KITTING #1 Key points: 1. Contract awarded to a single, large defense contractor, indicating a focus on established capabilities. 2. The contract type (Cost Plus Fixed Fee) suggests potential for cost overruns, requiring close monitoring. 3. Delivery Order award indicates this is part of a larger contract vehicle. 4. The North American Industry Classification System (NAICS) code 561990 points to broad support services. 5. The contract duration of 711 days provides a substantial timeframe for service delivery. 6. Awarded by U.S. Special Operations Command, highlighting a specialized defense application.

Value Assessment

Rating: fair

Benchmarking the value of this specific delivery order is challenging without knowing the broader contract it belongs to or the specific services rendered. However, the Cost Plus Fixed Fee (CPFF) contract type can sometimes lead to higher costs compared to fixed-price contracts if not managed diligently. The fixed fee component provides some cost certainty for the contractor, but the cost-reimbursement aspect requires robust oversight to ensure efficiency and prevent unnecessary expenditures. Without comparable data on similar kitting services for MH-60M helicopters, a definitive value-for-money assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The fact that Lockheed Martin Corporation was the awardee indicates they likely presented the most advantageous offer based on the evaluation criteria. The level of competition, while initially broad, ultimately resulted in a single awardee, which is typical for specialized defense procurements where only a few entities possess the required capabilities and security clearances.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation. For this specific contract, it suggests that the government sought the best value from a range of potential providers, aiming to secure optimal terms.

Public Impact

Special Operations Forces personnel will benefit from the provision of essential kitting for MH-60M helicopters. The services delivered will ensure the operational readiness and effectiveness of critical aviation assets. The geographic impact is likely concentrated around military bases or operational areas where these helicopters are deployed. The contract supports specialized roles within the defense industrial base, potentially involving skilled labor for assembly and logistics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type introduces risk of cost escalation if not closely managed.
Limited public information on the specific kitting requirements makes independent value assessment difficult.
Reliance on a single large contractor for specialized kitting may limit future competitive opportunities if capabilities are not shared.

Positive Signals

Awarded under full and open competition, indicating a fair process for selecting the best offer.
The contract is with a well-established defense contractor (Lockheed Martin) with a proven track record.
The delivery order is part of a larger framework, suggesting potential for ongoing support and integration.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex supply chains, and significant government investment. Contracts for specialized aircraft support, such as kitting for helicopters like the MH-60M, fall within this domain. The market for such services is dominated by a few large prime contractors who manage intricate systems and extensive supply networks. Spending in this area is driven by national security requirements and the need to maintain advanced military platforms.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by the 'sb': false flag. Lockheed Martin Corporation is a large business. There is no explicit information provided regarding subcontracting plans for small businesses within this specific delivery order. Without such details, the direct impact on the small business ecosystem is unclear, though large prime contractors often engage small businesses in their supply chains.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management structures, specifically within U.S. Special Operations Command. As a Cost Plus Fixed Fee contract, rigorous financial oversight and auditing are expected to ensure that costs are reasonable and allocable. Transparency is facilitated through contract award databases, but detailed performance metrics and spending breakdowns may be subject to security or proprietary restrictions.

Related Government Programs

MH-60M Helicopter Support
Special Operations Aviation Programs
Defense Logistics and Sustainment
Aerospace Component Manufacturing
Military Aircraft Kitting Services

Risk Flags

Cost Plus Fixed Fee contract type requires robust oversight to manage costs.
Limited public detail on specific services hinders independent value assessment.
Potential for sole-source follow-on work if contractor's role becomes indispensable.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $8.5 million to LOCKHEED MARTIN CORPORATION. MH60M KITTING #1

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 $8.5 million.

What is the period of performance?

Start: 2022-10-24. End: 2024-10-04.

What is the specific nature of the 'kitting' services provided under this contract?

The term 'kitting' in this context likely refers to the assembly and provision of pre-packaged sets of components, tools, or supplies required for the maintenance, repair, or operation of the MH-60M helicopter. This could include everything from specialized tool sets for specific maintenance tasks to integrated mission equipment packages or spare parts bundles. The exact composition of these kits would be detailed in the contract's Statement of Work (SOW). Without access to the SOW, the precise nature and value of the kitting services remain unspecified, making it difficult to assess their criticality or cost-effectiveness independently.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other pricing arrangements for similar defense support services?

Cost Plus Fixed Fee (CPFF) contracts are common in defense procurement, especially for services where the scope of work is not precisely defined at the outset or involves research and development. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This differs from fixed-price contracts, where the price is set regardless of the final cost, offering more cost certainty to the buyer but potentially higher risk for the contractor if costs escalate. Compared to Cost Plus Incentive Fee (CPIF) or Cost Plus Award Fee (CPAF) contracts, CPFF offers less flexibility for incentivizing performance or cost savings beyond the initial fixed fee. For taxpayers, CPFF contracts require diligent oversight to ensure costs are reasonable and the fixed fee provides adequate profit without being excessive.

What is Lockheed Martin Corporation's track record with MH-60M helicopter support or similar aviation kitting contracts?

Lockheed Martin Corporation, through its Sikorsky subsidiary, is a primary contractor for the MH-60 family of helicopters, including the MH-60M variant used by Special Operations Command. Their extensive experience with the platform suggests a deep understanding of its operational requirements and support needs. This includes familiarity with the types of kits and components necessary for maintaining and equipping these aircraft. Given their long-standing relationship with the MH-60M program, it is highly probable that they have a substantial track record in providing various support services, including kitting, which likely informed their selection for this contract.

What are the potential risks associated with a single delivery order awarded to a large prime contractor like Lockheed Martin for specialized kitting?

A primary risk associated with a single delivery order to a large prime contractor is the potential for reduced competition in future procurements if the prime contractor becomes the sole source of specialized knowledge or components. While this award was made under full and open competition, subsequent needs might be fulfilled through sole-source modifications or follow-on contracts if the prime contractor's role is critical and unique. Another risk relates to cost control; large contractors may have higher overheads, and CPFF contracts necessitate vigilant oversight to prevent cost creep. Furthermore, over-reliance on a single entity could impact supply chain resilience if that contractor faces disruptions.

How does this contract's value compare to historical spending on MH-60M helicopter support or similar services?

Comparing the $8.5 million value of this specific delivery order to historical spending on MH-60M helicopter support requires access to broader contract data. The MH-60M is a specialized variant, and its support costs can be significant due to its advanced capabilities and mission requirements. Historical data for similar kitting services or broader sustainment contracts for this platform would be needed for a meaningful benchmark. Without that context, it's difficult to ascertain if $8.5 million represents a high, low, or average expenditure for the services rendered over the contract's duration. The CPFF structure also means the final cost could vary.

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: $8,494,956

Exercised Options: $8,494,956

Current Obligation: $8,494,956

Subaward Activity

Number of Subawards: 21

Total Subaward Amount: $2,098,821

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