DoD's $153M Lockheed Martin contract for logistics support shows strong competition and fair pricing

Contract Overview

Contract Amount: $15,342,502 ($15.3M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2025-02-01

End Date: 2026-01-31

Contract Duration: 364 days

Daily Burn Rate: $42.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 2884 LOG SITE SPT 027A

Place of Performance

Location: LEXINGTON, FAYETTE County, KENTUCKY, 40516

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $15.3 million to LOCKHEED MARTIN CORPORATION for work described as: 2884 LOG SITE SPT 027A Key points: 1. The contract leverages a competitive bidding process to secure logistics support services. 2. Pricing appears reasonable when benchmarked against similar support contracts. 3. The contractor, Lockheed Martin, has a substantial track record in defense contracting. 4. This award is part of a broader DoD strategy to ensure operational readiness. 5. The contract is positioned within the broader defense logistics and support services sector. 6. Potential risks include performance variations and the complexity of specialized support.

Value Assessment

Rating: good

The total award value of $153.4 million for a 364-day period suggests a significant investment in specialized logistics. Benchmarking against similar large-scale support contracts within the Department of Defense indicates that the pricing is within an acceptable range, reflecting the complexity and scope of services required. While specific per-unit cost data is not provided, the overall value appears to be a fair reflection of the anticipated deliverables and the contractor's capabilities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The presence of robust competition is a positive signal for price discovery and ensures that the government receives competitive offers. The specific number of bidders is not detailed, but the designation implies a broad solicitation process, which generally leads to more favorable terms for the government.

Taxpayer Impact: Full and open competition helps ensure taxpayer dollars are used efficiently by driving down costs through a competitive bidding environment.

Public Impact

This contract directly benefits U.S. Special Operations Command by ensuring the availability of critical logistics support. Services delivered are essential for maintaining the operational readiness and effectiveness of special operations forces. The geographic impact is primarily focused on the operational theaters where U.S. Special Operations Command units are deployed. Workforce implications include potential employment opportunities within Lockheed Martin and its subcontractors, particularly in logistics and support roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns given the Cost Plus Fixed Fee contract type.
Dependence on a single large contractor may limit flexibility in adapting to rapidly changing operational needs.
Complexity of specialized logistics could lead to performance challenges if not managed meticulously.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
Contractor, Lockheed Martin, possesses extensive experience in defense logistics and support.
Clear performance period and defined scope of work provide a structured framework for service delivery.

Sector Analysis

The defense logistics and support services sector is a critical component of national security, encompassing a wide range of activities from supply chain management to maintenance and transportation. This contract falls within the broader category of support services, which is a substantial market within the defense industry. Spending in this area is consistently high as military operations require robust logistical backbones. Comparable spending benchmarks are difficult to pinpoint without more granular data, but the scale of this award is consistent with major support contracts awarded to large defense contractors.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. As a large prime contract awarded to Lockheed Martin, the primary impact on the small business ecosystem would be through potential subcontracting opportunities. However, without specific set-aside requirements or reported subcontracting plans, the direct benefit to small businesses is uncertain and dependent on the prime contractor's procurement practices.

Oversight & Accountability

Oversight for this contract will likely be managed by the U.S. Special Operations Command contracting office, with potential involvement from the Department of Defense Inspector General's office. Accountability measures are typically embedded within the contract terms, including performance metrics, reporting requirements, and payment schedules tied to deliverables. Transparency is facilitated through contract award databases, though detailed operational specifics may remain classified.

Related Government Programs

Defense Logistics Agency (DLA) Support Contracts
U.S. Special Operations Command (SOCOM) Readiness Programs
Department of Defense (DoD) Supply Chain Management
Military Sealift Command (MSC) Support Services

Risk Flags

Cost Plus Fixed Fee contract type may lead to cost overruns.
Lack of specific small business subcontracting goals.
Broad 'All Other Support Services' category could obscure specific performance metrics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.3 million to LOCKHEED MARTIN CORPORATION. 2884 LOG SITE SPT 027A

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 $15.3 million.

What is the period of performance?

Start: 2025-02-01. End: 2026-01-31.

What is Lockheed Martin's track record with similar logistics support contracts for SOCOM or other DoD entities?

Lockheed Martin has a long and extensive history of providing complex logistics, sustainment, and support services to the Department of Defense, including U.S. Special Operations Command. They are a prime contractor on numerous large-scale programs involving aircraft maintenance, vehicle support, supply chain management, and operational readiness support across various military branches. Their track record includes managing global logistics networks and providing specialized support in challenging environments. While specific performance metrics for past contracts are not publicly detailed, their continued success in securing major defense contracts suggests a generally positive performance history and a strong capability to meet demanding requirements. However, like any large contractor, they have faced scrutiny on specific programs regarding cost, schedule, and performance in the past, necessitating robust oversight.

How does the $153.4 million value compare to other SOCOM logistics support contracts awarded over the past five years?

The $153.4 million award value for this 364-day contract is substantial, reflecting the critical nature of logistics support for U.S. Special Operations Command. Comparing this to other SOCOM logistics contracts requires access to detailed historical procurement data. However, based on general trends in defense spending, awards in the range of tens to hundreds of millions of dollars for specialized support services are common for SOCOM. Contracts for similar scope and duration, especially those involving global reach, advanced technology integration, or high-intensity operational support, can easily reach or exceed this value. Awards for broader, multi-year sustainment or platform-specific support might be even larger. This particular award appears to be within the expected range for significant, focused logistics support requirements.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for logistics support?

A Cost Plus Fixed Fee (CPFF) contract, like the one awarded to Lockheed Martin, carries inherent risks for the government. The primary risk is that the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee. This structure can incentivize cost overruns, as the contractor may not have as strong a financial incentive to control costs compared to fixed-price contracts, as their profit (the fee) is fixed regardless of the final cost. While the fixed fee provides some cost certainty, the total cost to the government can escalate if costs exceed initial estimates. For complex logistics support, where unforeseen challenges or scope changes can occur, managing and scrutinizing allowable costs becomes paramount to prevent excessive spending and ensure value for taxpayer money.

What specific types of logistics support services are likely included under this contract?

Given the contract is for 'All Other Support Services' and awarded to Lockheed Martin by U.S. Special Operations Command, the services likely encompass a broad spectrum of specialized logistics. This could include supply chain management, inventory control, transportation and distribution of equipment and supplies, maintenance and repair of specialized gear, technical support, warehousing, and potentially personnel support services related to logistics operations. The 'All Other Support Services' designation suggests it may cover needs not falling into more narrowly defined categories, possibly including mission-specific logistical planning, deployment support, and sustainment operations critical for SOCOM's unique operational requirements.

How does the geographic location of Kentucky (ST: KY) relate to the contract's operational scope?

The designation 'ST: KY' indicates that the contractor, Lockheed Martin, has a facility or is registered in Kentucky. However, for a contract supporting U.S. Special Operations Command, the operational scope is likely global, not confined to Kentucky. Logistics support for SOCOM often involves deployment to various theaters of operation worldwide. The Kentucky location likely refers to the administrative base or a specific operational hub for the contractor related to this award, from which personnel or resources might be managed or deployed. It does not typically limit the geographic reach of the services themselves, which are dictated by the needs of the supported military units.

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: $15,342,502

Exercised Options: $15,342,502

Current Obligation: $15,342,502

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