DoD awards $26.1M contract for CR2M kit installation on MC-130J aircraft

Contract Overview

Contract Amount: $26,111,276 ($26.1M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2025-05-21

End Date: 2027-01-22

Contract Duration: 611 days

Daily Burn Rate: $42.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THE PURPOSE OF THIS EFFORT IS FOR CR2M KIT INSTALLATION ON THE MC-130J MOD LINE.

Place of Performance

Location: LEXINGTON, FAYETTE County, KENTUCKY, 40516

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $26.1 million to LOCKHEED MARTIN CORPORATION for work described as: THE PURPOSE OF THIS EFFORT IS FOR CR2M KIT INSTALLATION ON THE MC-130J MOD LINE. Key points: 1. Contract focuses on specialized aircraft modification services. 2. Awarded to a single, large defense contractor. 3. Performance period spans over 1.5 years. 4. Contract type is Cost Plus Fixed Fee, indicating potential for cost overruns. 5. No small business set-aside noted. 6. Geographic location for work is Kentucky.

Value Assessment

Rating: fair

The contract value of $26.1 million for CR2M kit installation on MC-130J aircraft appears to be within a reasonable range for specialized military aircraft modifications. However, the Cost Plus Fixed Fee (CPFF) contract type introduces inherent risk, as it allows the contractor to recover all allowable costs plus a fixed fee, potentially leading to higher final costs than fixed-price contracts. Benchmarking against similar modification contracts would provide a clearer picture of value for money, but specific comparable data is not readily available.

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 specific number of bidders is not provided, which limits a detailed assessment of the competitive landscape. However, the fact that it was competed openly is a positive indicator for price discovery and potentially achieving a fair market price.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down costs and encourage innovation among potential bidders.

Public Impact

The primary beneficiaries are the U.S. Special Operations Command (SOCOM) and the personnel operating the MC-130J aircraft, who will receive upgraded capabilities. The services delivered involve the installation of CR2M kits, enhancing the operational effectiveness of the aircraft. The geographic impact is concentrated in Kentucky, where the modification work will take place. The contract supports specialized technical labor within the aerospace and defense industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can lead to cost uncertainty and potential overruns.
Limited transparency on the number of bidders in the full and open competition.
Reliance on a single large contractor for specialized modification services.

Positive Signals

Awarded through full and open competition, indicating a broad solicitation.
Clear definition of the modification effort (CR2M kit installation).
Defined performance period with specific start and end dates.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft modification and support services. The market for military aircraft modification is substantial, driven by the need to maintain and upgrade aging fleets and incorporate new technologies. Lockheed Martin Corporation, the awardee, is a major player in this sector. Comparable spending benchmarks for similar aircraft modification programs would typically be in the tens to hundreds of millions of dollars, depending on the complexity and scope of the modifications.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the primary award went to a large business. There is no explicit information regarding subcontracting plans for small businesses. Without this information, it's difficult to assess the direct impact on the small business ecosystem, though large prime contractors often utilize small business subcontractors for various components and services.

Oversight & Accountability

Oversight for this contract will likely be managed by the U.S. Special Operations Command (SOCOM) contracting and program management offices. Accountability measures would be embedded in the contract terms, including performance standards and reporting requirements. Transparency is facilitated by the contract award notice, but detailed cost breakdowns and performance metrics may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Aircraft Modification Programs
Special Operations Forces Equipment Procurement
Defense Logistics and Sustainment
MC-130J Hercules Operations

Risk Flags

Cost Plus Fixed Fee contract type carries inherent cost risk.
Limited information on the number of bidders.
No explicit small business subcontracting requirements mentioned.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.1 million to LOCKHEED MARTIN CORPORATION. THE PURPOSE OF THIS EFFORT IS FOR CR2M KIT INSTALLATION ON THE MC-130J MOD LINE.

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 $26.1 million.

What is the period of performance?

Start: 2025-05-21. End: 2027-01-22.

What is the track record of Lockheed Martin Corporation in performing similar aircraft modification contracts for the Department of Defense?

Lockheed Martin Corporation is a major defense contractor with extensive experience in aircraft manufacturing, modification, and sustainment. They have a long history of performing complex modifications on various military aircraft platforms, including special mission variants like the C-130 family. Their track record includes numerous contracts for upgrades, avionics modernization, and structural enhancements for the U.S. Air Force, Navy, and other branches. While specific performance metrics for past contracts are often not publicly detailed, their consistent selection for large, critical programs suggests a generally positive performance history. However, like any large contractor, they have also faced scrutiny and contract disputes on occasion. A deeper dive into specific past performance evaluations for similar modification efforts would be necessary for a comprehensive assessment.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other contract types in terms of value for money for this type of service?

Cost Plus Fixed Fee (CPFF) contracts are often used when the scope of work is not precisely defined or when there is significant uncertainty in the costs involved, such as in research and development or complex modifications. In this case, the CPFF structure allows the contractor to recover all allowable costs plus a predetermined fixed fee, which represents their profit. While this provides flexibility for unforeseen issues during the CR2M kit installation, it shifts much of the cost risk to the government. Compared to fixed-price contracts, CPFF generally offers less incentive for the contractor to control costs rigorously, potentially leading to higher overall expenditures. However, for highly specialized or novel modifications where cost estimation is inherently difficult, CPFF can ensure the necessary work is completed without the contractor being unduly penalized by unforeseen cost increases. The value for money is thus dependent on effective government oversight and cost monitoring.

What are the potential risks associated with the CR2M kit installation on the MC-130J aircraft?

Potential risks associated with the CR2M kit installation on the MC-130J aircraft include technical challenges during integration, potential compatibility issues with existing aircraft systems, and unforeseen complexities in the modification process. Given the CPFF contract type, there is a financial risk of cost overruns if the installation proves more complex or time-consuming than initially estimated. Schedule risks could arise from delays in parts procurement, technical difficulties, or resource availability. Operational risks might include temporary unavailability of the aircraft during modification, impacting SOCOM's operational readiness. Furthermore, ensuring the long-term reliability and maintainability of the installed kits is crucial. Effective risk mitigation would involve robust technical planning, close collaboration between the contractor and government engineers, and diligent oversight of cost and schedule performance.

What is the historical spending pattern for CR2M kit installations or similar modifications on MC-130J aircraft?

Historical spending data specifically for CR2M kit installations on MC-130J aircraft is not readily available in the public domain. However, the MC-130J is operated by U.S. Special Operations Command (SOCOM) and is a variant of the C-130J Super Hercules, known for its specialized roles. Modifications to such platforms typically involve significant investment due to their complexity and the critical nature of their missions. Past spending on upgrades, avionics modernization, and mission system integration for C-130 variants can range from several million to tens of millions of dollars per aircraft, depending on the scope. The current $26.1 million award for CR2M kit installation appears consistent with the scale of investment expected for significant capability enhancements on specialized military aircraft. Without more granular historical data on similar modification efforts, a precise trend analysis is challenging.

How does the geographic location (Kentucky) influence the cost and execution of this contract?

The geographic location of the contract performance in Kentucky (ST: KY, SN: KENTUCKY) can influence cost and execution in several ways. Labor costs in Kentucky may differ from those in other regions, potentially impacting the overall cost of services. The availability of a skilled workforce experienced in aerospace modifications within the region is also a factor; if specialized talent needs to be brought in, it could increase logistical costs and complexity. Proximity to relevant supply chains and support infrastructure can affect delivery times and costs for materials and components. Furthermore, state and local regulations, as well as any available economic incentives, could play a role. While Kentucky has a presence in the aerospace sector, the specific concentration of facilities and expertise relevant to MC-130J modifications would determine the extent of these influences.

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

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: $26,111,276

Exercised Options: $26,111,276

Current Obligation: $26,111,276

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $4,349,943

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