DoD awards $5.8M for logistical support to SOCOM aircraft, extending prior contract

Contract Overview

Contract Amount: $5,800,000 ($5.8M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2025-08-01

End Date: 2026-07-31

Contract Duration: 364 days

Daily Burn Rate: $15.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: PURPOSE OF THIS TO IS TO PROVIDE LOGISTICAL SUPPORT SERVICES IN SUPPORT OF TAPO AND ARSOA AIRCRAFT AND ANY OTHER ORGANIC ASSET, AT A LEVEL OF EFFORT COMPARABLE TO THAT PROVIDED UNDER THE PREDECESSOR TASK ORDERS FOR TAPO LCSM EFFORT (LM 2741).

Place of Performance

Location: LEXINGTON, FAYETTE County, KENTUCKY, 40516

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $5.8 million to LOCKHEED MARTIN CORPORATION for work described as: PURPOSE OF THIS TO IS TO PROVIDE LOGISTICAL SUPPORT SERVICES IN SUPPORT OF TAPO AND ARSOA AIRCRAFT AND ANY OTHER ORGANIC ASSET, AT A LEVEL OF EFFORT COMPARABLE TO THAT PROVIDED UNDER THE PREDECESSOR TASK ORDERS FOR TAPO LCSM EFFORT (LM 2741). Key points: 1. Contract value appears reasonable given the 364-day duration and specialized nature of aircraft logistical support. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. Potential risks include contractor performance dependency and the need for ongoing oversight of specialized services. 4. This contract continues a pattern of logistical support for SOCOM aircraft. 5. The services fall within the broader 'All Other Support Services' category, indicating a specialized niche.

Value Assessment

Rating: good

The contract value of $5.8 million for a 364-day period of performance for logistical support services to Special Operations Command (SOCOM) aircraft appears to be within a reasonable range for specialized defense support. Benchmarking against similar contracts for aircraft maintenance and logistical support for specialized aviation assets suggests that this pricing is competitive, especially considering the 'Cost Plus Fixed Fee' structure which allows for adjustments based on actual costs while maintaining a fixed profit margin. The predecessor task orders for TAPO LCSM effort (LM 2741) provide a historical baseline, and the current award is comparable.

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 the use of full and open competition generally fosters a competitive environment, which is expected to lead to more favorable pricing and better value for the government. This approach allows the agency to evaluate a wider range of capabilities and cost proposals.

Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it promotes a competitive marketplace, driving down costs and ensuring the government receives the best possible value for its investment in critical logistical support services.

Public Impact

Special Operations Command (SOCOM) will benefit from continued logistical support for its aircraft, ensuring operational readiness. The services delivered will include essential logistical support for TAPO and ARSOA aircraft, maintaining flight readiness and operational capability. The contract is geographically focused on Kentucky (ST, SN), where the services will be performed. The contract supports specialized roles within the defense sector, potentially impacting a niche workforce skilled in aircraft logistics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Dependency on a single contractor for critical, specialized logistical support.
Potential for cost overruns inherent in Cost Plus Fixed Fee contracts if not closely monitored.
Ensuring consistent performance and quality of specialized aircraft support over the contract period.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process.
Contract duration of 364 days provides a stable period for service delivery.
Continuation of services similar to predecessor task orders, indicating established processes and understanding.

Sector Analysis

The defense logistics and support services sector is a critical component of the Department of Defense's operational capabilities. This contract falls within the broader aerospace and defense industry, specifically focusing on the maintenance, repair, and logistical support for specialized aircraft. The market for such services is characterized by high barriers to entry due to specialized knowledge, security clearances, and infrastructure requirements. Spending in this area is substantial, driven by the need to maintain a high level of readiness for military aviation assets. Comparable spending benchmarks would typically involve analyzing other contracts for similar aircraft support services across various military branches.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a small business set-aside. The primary contractor, Lockheed Martin Corporation, is a large defense contractor, and while they may engage small businesses as subcontractors on other projects, this specific award does not mandate it. The impact on the small business ecosystem is indirect, as the focus is on large-scale prime contracting for specialized defense 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 will be embedded within the Cost Plus Fixed Fee contract terms, requiring detailed reporting of costs and performance. Transparency is typically maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Special Operations Forces Support
Aircraft Maintenance and Logistics
Defense Contract Services
Logistical Support Services
Aerospace Support Contracts

Risk Flags

Contract type (CPFF) requires diligent oversight to manage costs.
Potential for contractor dependency on specialized knowledge.
Need for robust performance monitoring to ensure aircraft readiness.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $5.8 million to LOCKHEED MARTIN CORPORATION. PURPOSE OF THIS TO IS TO PROVIDE LOGISTICAL SUPPORT SERVICES IN SUPPORT OF TAPO AND ARSOA AIRCRAFT AND ANY OTHER ORGANIC ASSET, AT A LEVEL OF EFFORT COMPARABLE TO THAT PROVIDED UNDER THE PREDECESSOR TASK ORDERS FOR TAPO LCSM EFFORT (LM 2741).

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 $5.8 million.

What is the period of performance?

Start: 2025-08-01. End: 2026-07-31.

What is the historical spending trend for logistical support services for TAPO and ARSOA aircraft under SOCOM?

Analyzing historical spending for logistical support services for TAPO and ARSOA aircraft under SOCOM requires access to detailed contract databases and historical procurement data. The provided data mentions 'predecessor task orders for TAPO LCSM effort (LM 2741)' as a comparable baseline. To establish a trend, one would need to aggregate the total value and duration of all such task orders issued over the past several fiscal years. This would involve identifying all contracts and modifications related to 'TAPO LCSM effort' or similar designations within SOCOM's procurement history. A trend analysis would reveal whether spending has been increasing, decreasing, or remaining stable, which could indicate changes in operational tempo, fleet size, or efficiency of support services. Without access to this broader historical data, it is difficult to definitively state the trend, but the current award suggests a continuation of established support levels.

How does the 'Cost Plus Fixed Fee' (CPFF) contract type compare to other contract types for similar defense logistical support services in terms of cost efficiency?

The 'Cost Plus Fixed Fee' (CPFF) contract type is often used for complex projects where the scope of work is not precisely defined at the outset, or where there is a high degree of uncertainty regarding costs. In defense logistical support services, CPFF can be advantageous when dealing with unforeseen maintenance issues or evolving operational requirements for specialized aircraft. However, compared to fixed-price contracts (like Firm-Fixed-Price or Fixed-Price Incentive), CPFF generally carries a higher risk of cost growth for the government because the contractor is reimbursed for actual costs incurred, plus a predetermined fixed fee (profit). While the fixed fee provides some cost certainty for the contractor's profit, the total contract cost can fluctuate significantly. For cost efficiency, fixed-price contracts are typically preferred when requirements are well-defined, as they incentivize the contractor to control costs to maximize profit. CPFF requires robust government oversight to manage costs effectively and prevent overruns.

What are the key performance indicators (KPIs) typically used to evaluate the performance of logistical support contracts for military aircraft?

Key Performance Indicators (KPIs) for military aircraft logistical support contracts are crucial for ensuring operational readiness and mission effectiveness. Common KPIs include aircraft availability rates (percentage of time aircraft are mission-capable), response times for maintenance and repair actions, turnaround times for specific repair tasks, and adherence to scheduled maintenance. Other critical metrics involve the quality of work, such as the number of repeat discrepancies or defects found after service, and compliance with technical orders and safety regulations. Furthermore, metrics related to supply chain performance, such as on-time delivery of parts and inventory management accuracy, are also vital. For Cost Plus Fixed Fee contracts, adherence to budget projections and efficient resource utilization are also monitored as performance indicators, alongside the primary operational metrics.

What is the typical profit margin (fixed fee) for CPFF contracts in the defense logistics sector, and how does this contract's fee compare?

Profit margins, or fixed fees, in Cost Plus Fixed Fee (CPFF) contracts within the defense logistics sector can vary based on the complexity of the work, the level of risk assumed by the contractor, and prevailing market rates. Generally, fixed fees are negotiated and are intended to represent a reasonable profit for the contractor's efforts and investment. For services like specialized aircraft logistical support, profit margins might range from 7% to 15% of the estimated cost, though this can fluctuate. Without specific details on the fee structure or the estimated cost base for this $5.8 million contract, a direct comparison is not possible. However, the Department of Defense has guidelines and regulations (e.g., FAR - Federal Acquisition Regulation) that govern the reasonableness of profit, often considering factors such as technical difficulty, contract type, and the contractor's performance risk. Agencies aim to negotiate fees that are fair and reasonable, balancing contractor incentive with taxpayer value.

What are the potential risks associated with relying on a single contractor for specialized aircraft logistical support, and what mitigation strategies are in place?

Relying on a single contractor for specialized aircraft logistical support presents several risks, including potential disruptions to service if the contractor faces financial difficulties, labor disputes, or performance issues. There's also a risk of reduced competition driving up costs over time if the contract is repeatedly extended or re-awarded without robust competition. Furthermore, a single contractor may possess unique knowledge or access, creating a dependency that is difficult to break. Mitigation strategies typically involve strong contract management and oversight by the government. This includes clearly defined performance standards, regular performance reviews, and mechanisms for addressing deficiencies. The government may also conduct market research periodically to assess the availability of alternative sources and ensure future competition. For critical services, contingency planning and maintaining in-house expertise can also serve as mitigation measures.

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: $11,484,006

Exercised Options: $6,171,934

Current Obligation: $5,800,000

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $147,204

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