DoD awards $39.1M for MH-47G Black Hawk helicopter sustainment, with Lockheed Martin as the contractor

Contract Overview

Contract Amount: $39,122,176 ($39.1M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2025-03-14

End Date: 2027-08-10

Contract Duration: 879 days

Daily Burn Rate: $44.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: MH47G BLK II POST PROD LOT 6 AND 7 (P11)

Place of Performance

Location: LEXINGTON, FAYETTE County, KENTUCKY, 40516

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $39.1 million to LOCKHEED MARTIN CORPORATION for work described as: MH47G BLK II POST PROD LOT 6 AND 7 (P11) Key points: 1. Contract focuses on sustainment for a critical special operations aircraft. 2. The contract type (Cost Plus Fixed Fee) allows for flexibility but requires careful oversight of costs. 3. Limited publicly available data makes direct value-for-money assessment challenging. 4. The duration of the contract suggests a long-term need for these services. 5. This award is part of ongoing support for a specialized aviation platform.

Value Assessment

Rating: fair

The contract value of $39.1 million over approximately 2.5 years for sustainment services for MH-47G helicopters appears reasonable given the specialized nature of the aircraft and the contractor's role. However, without detailed cost breakdowns or comparisons to similar sustainment contracts for other special operations aircraft, a definitive value-for-money assessment is difficult. The Cost Plus Fixed Fee (CPFF) structure necessitates robust oversight to ensure costs remain within acceptable bounds and that the fixed fee adequately compensates the contractor for their efforts without excessive profit.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The specific number of bidders is not provided, but this competitive approach is generally favorable for price discovery and ensuring the government receives competitive pricing. The use of full and open competition suggests that the government sought the best possible solution and price from the market.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it drives down costs through market forces and encourages innovation among potential bidders, leading to better value.

Public Impact

This contract directly supports the U.S. Special Operations Command's aviation capabilities. It ensures the continued operational readiness of MH-47G "Black Hawk" helicopters, vital for special operations missions. The services provided will likely maintain the airworthiness and performance of these critical assets. The contract's impact is primarily on national security and special operations forces' effectiveness.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can lead to cost overruns if not managed tightly.
Sustainment of specialized aircraft can be complex and prone to unexpected technical challenges.
Reliance on a single contractor for specialized parts or expertise could pose a risk.

Positive Signals

Awarded under full and open competition, suggesting competitive pricing.
Long-term sustainment contract indicates a stable and predictable need, allowing for efficient planning.
Lockheed Martin has extensive experience with this aircraft platform.

Sector Analysis

The aerospace and defense sector is characterized by high-value, complex contracts often involving specialized technologies and long production cycles. Sustainment services, like those awarded here, are a significant part of the defense budget, ensuring the operational readiness of existing platforms. The market for military aircraft sustainment is dominated by a few large prime contractors with deep expertise and established relationships with the government. This contract fits within the broader category of aerospace support services, which is a multi-billion dollar segment of the defense industrial base.

Small Business Impact

The contract data indicates that small business participation is not a primary focus for this specific award, as the prime contractor is Lockheed Martin Corporation, a large business. There is no explicit small business set-aside mentioned. However, it is common for large prime contractors to utilize small business subcontractors for various components or specialized services. The extent of small business subcontracting will depend on Lockheed Martin's procurement strategy and the specific requirements of the sustainment effort.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract will likely be managed by the U.S. Special Operations Command (SOCOM) contracting and program management offices. Accountability measures will include regular performance reviews, cost tracking, and adherence to the contract's technical requirements. Transparency is facilitated through contract award databases, but detailed cost breakdowns and performance metrics are typically not publicly disclosed for national security reasons. Inspector General oversight may be involved if any issues of fraud, waste, or abuse arise.

Related Government Programs

MH-47G Black Hawk Helicopter Program
Special Operations Aviation Support
Aircraft Sustainment and Maintenance Contracts
Defense Logistics Agency (DLA) Support Services

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
Aging aircraft fleet may present increasing maintenance challenges and costs.
Dependence on a single prime contractor for specialized sustainment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.1 million to LOCKHEED MARTIN CORPORATION. MH47G BLK II POST PROD LOT 6 AND 7 (P11)

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 $39.1 million.

What is the period of performance?

Start: 2025-03-14. End: 2027-08-10.

What is Lockheed Martin's track record with MH-47G sustainment?

Lockheed Martin Corporation, through its Sikorsky subsidiary, has a long-standing relationship with the MH-47G "Chinook" helicopter program, including its development and sustainment. Sikorsky is the original equipment manufacturer for the Chinook family of helicopters. Their track record typically involves providing comprehensive support, including logistics, engineering services, and depot-level maintenance. Given their OEM status, they possess deep institutional knowledge of the aircraft's systems, maintenance requirements, and potential obsolescence issues. Past performance on similar contracts would likely be a key factor in their selection for this award, indicating a history of meeting performance expectations and managing complex sustainment operations for special operations aviation assets.

How does the $39.1 million value compare to similar aircraft sustainment contracts?

Direct comparison of the $39.1 million value for this specific MH-47G sustainment contract is challenging without access to detailed contract databases and specific scope of work for comparable contracts. However, sustainment costs for complex military aircraft, especially those used in special operations with unique modifications and demanding operational tempos, can be substantial. Annual sustainment costs for such platforms can range from 5% to 15% of the aircraft's acquisition cost. Given the specialized nature of the MH-47G and its role within SOCOM, this award appears to be a mid-sized contract for a defined period (approximately 2.5 years). Larger, multi-year sustainment contracts for fleets of similar aircraft could easily reach hundreds of millions of dollars.

What are the primary risks associated with this contract?

The primary risks associated with this contract include potential cost overruns due to the Cost Plus Fixed Fee (CPFF) contract type, which allows for costs to exceed initial estimates, although the contractor's fee is fixed. Technical risks involve the aging nature of the MH-47G fleet, potential for unforeseen maintenance issues, and the availability of specialized parts and expertise. Programmatic risks could arise from changes in operational requirements or budget constraints within the Department of Defense. Furthermore, reliance on a single prime contractor for critical sustainment services can create dependency and limit flexibility if performance issues arise or if the contractor faces financial instability.

How effective is the Cost Plus Fixed Fee (CPFF) contract type for aircraft sustainment?

The Cost Plus Fixed Fee (CPFF) contract type is often used for complex projects where the scope of work is not fully defined at the outset, or when the contractor's performance is difficult to measure precisely. For aircraft sustainment, CPFF can be effective in ensuring that necessary maintenance and support are provided, even when unexpected issues arise. It provides flexibility to address emergent needs. However, it places a significant burden on the government to closely monitor costs and contractor performance to prevent inefficiencies and ensure the fixed fee remains appropriate for the effort expended. Without stringent oversight, there is a risk of cost escalation beyond what might be achieved with a fixed-price contract, though fixed-price contracts can be difficult to implement for evolving sustainment needs.

What is the historical spending trend for MH-47G sustainment?

Historical spending data for MH-47G sustainment would reveal the total investment made by the U.S. Special Operations Command (SOCOM) in maintaining this aircraft fleet over time. Analyzing past contract awards for sustainment, maintenance, and upgrades would provide insights into the annual expenditure trends. This specific award of $39.1 million represents a portion of that ongoing investment. Trends might indicate increasing costs due to aging aircraft, evolving mission requirements, or changes in contracting strategies. Understanding historical spending is crucial for budgeting, forecasting future needs, and identifying potential areas for cost savings or efficiency improvements in sustainment operations.

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: $39,122,176

Exercised Options: $39,122,176

Current Obligation: $39,122,176

Subaward Activity

Number of Subawards: 25

Total Subaward Amount: $7,347,536

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