Homeland Security's $22M aircraft wing kit contract awarded to Lockheed Martin for Customs and Border Protection

Contract Overview

Contract Amount: $22,071,498 ($22.1M)

Contractor: Lockheed Martin Aeronautical Systems Support Company

Awarding Agency: Department of Homeland Security

Start Date: 2010-12-15

End Date: 2013-12-19

Contract Duration: 1,100 days

Daily Burn Rate: $20.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 2 P-3 WING KITS

Place of Performance

Location: MARIETTA, COBB County, GEORGIA, 30060

State: Georgia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $22.1 million to LOCKHEED MARTIN AERONAUTICAL SYSTEMS SUPPORT COMPANY for work described as: 2 P-3 WING KITS Key points: 1. The contract value represents a significant investment in aviation assets for border security. 2. Awarded under full and open competition, suggesting a potentially competitive pricing environment. 3. The fixed-price contract type aims to control costs and provide predictability. 4. The duration of the contract indicates a long-term need for these specialized components. 5. The geographic location of performance is Georgia, potentially impacting local aerospace employment. 6. The contract is for aircraft manufacturing components, crucial for maintaining and upgrading aerial surveillance capabilities.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without detailed cost breakdowns or comparisons to similar wing kit procurements. However, the $22 million price tag for 2 P-3 WING KITS suggests a substantial per-unit cost, which warrants scrutiny. The firm fixed-price nature of the contract provides some cost certainty for the government, but the ultimate value depends on the efficiency of Lockheed Martin's production and the necessity of the specific configuration of these kits.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely solicited and considered. This approach is generally favorable for price discovery and ensuring the government receives competitive offers. The number of bidders and the specific evaluation criteria would provide further insight into the intensity of the competition and its impact on the final price.

Taxpayer Impact: Full and open competition typically benefits taxpayers by driving down prices through market forces, leading to potentially better value for the funds expended on these critical aircraft components.

Public Impact

U.S. Customs and Border Protection benefits through enhanced aerial surveillance capabilities for border security. The delivery of 2 P-3 WING KITS supports the operational readiness of the P-3 aircraft fleet. The contract's performance in Georgia may have positive implications for the regional aerospace workforce and supply chain. Improved aviation assets contribute to more effective monitoring and interdiction efforts along national borders.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if initial fixed-price estimates do not accurately reflect production complexities.
Dependence on a single contractor (Lockheed Martin) for specialized aircraft components could limit future negotiation leverage.
The long-term nature of the contract may not fully account for technological advancements that could render the procured kits obsolete.

Positive Signals

Awarded through full and open competition, suggesting a robust market evaluation.
Firm fixed-price contract type provides cost certainty and limits the government's exposure to cost increases.
The contract supports critical national security functions for U.S. Customs and Border Protection.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex supply chains, and significant government procurement. Contracts for specialized aircraft components like wing kits are vital for maintaining the operational readiness of military and homeland security aviation assets. Spending in this area is often driven by defense modernization efforts and the need for advanced surveillance and interdiction capabilities. Comparable spending benchmarks would typically involve analyzing other procurements for P-3 Orion aircraft upgrades or similar fixed-wing platforms.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. While Lockheed Martin is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors within the supply chain. The extent of small business subcontracting would need further investigation to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Homeland Security's contracting and program management offices. The firm fixed-price nature of the contract simplifies some aspects of oversight by focusing on delivery and performance against specifications. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

P-3 Orion Aircraft Sustainment
Homeland Security Aviation Assets
Customs and Border Protection Aircraft Procurement
Aerospace Component Manufacturing Contracts

Risk Flags

Potential for aging aircraft sustainment challenges beyond specific component replacement.
Long-term reliance on a single prime contractor for critical components.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $22.1 million to LOCKHEED MARTIN AERONAUTICAL SYSTEMS SUPPORT COMPANY. 2 P-3 WING KITS

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN AERONAUTICAL SYSTEMS SUPPORT COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Customs and Border Protection).

What is the total obligated amount?

The obligated amount is $22.1 million.

What is the period of performance?

Start: 2010-12-15. End: 2013-12-19.

What is the specific technical configuration and purpose of the '2 P-3 WING KITS' being procured?

The '2 P-3 WING KITS' refer to replacement or upgrade components for the P-3 Orion aircraft, a long-range, multi-engine turboprop aircraft used for maritime patrol, anti-submarine warfare, and surveillance. These kits likely include structural elements, control surfaces, and potentially integrated systems necessary for the wing's function. The specific configuration would detail the materials, dimensions, and any specialized equipment integrated into the wings, tailored to the operational requirements of U.S. Customs and Border Protection for their P-3 fleet, which is often used for border patrol and interdiction missions.

How does the $22,071,498 contract value compare to historical spending on similar P-3 wing kits?

Direct historical comparisons for 'P-3 WING KITS' are difficult without access to specific contract line item details and historical pricing data. However, the awarded amount of approximately $11 million per kit suggests a high-value, specialized component. P-3 aircraft are aging platforms, and major structural components like wings often undergo significant refurbishment or replacement programs. The cost is influenced by factors such as the complexity of the design, the materials used, the manufacturing process, and the specific modifications required by the end-user (CBP). Without more granular data on previous wing kit procurements or similar structural component contracts for the P-3, a precise benchmark is not feasible, but the figure indicates a substantial investment.

What are the key performance metrics and delivery milestones associated with this contract?

The contract details, including specific performance metrics and delivery milestones, are not fully elaborated in the provided data. However, as a firm fixed-price contract for physical goods (wing kits), key performance indicators would likely revolve around adherence to technical specifications, quality control standards, and timely delivery. Milestones would typically include phases for design finalization, component manufacturing, assembly, testing, and final acceptance by U.S. Customs and Border Protection. The contract duration of approximately three years (December 2010 to December 2013) suggests a phased delivery schedule rather than a single delivery event.

What is Lockheed Martin's track record with P-3 aircraft modifications and component manufacturing?

Lockheed Martin has a long and extensive history with the P-3 Orion aircraft, having been the original manufacturer. They have been involved in various sustainment, upgrade, and modification programs for the P-3 fleet throughout its service life, both for military branches and allied nations. This includes providing spare parts, performing depot-level maintenance, and executing modernization efforts. Their deep institutional knowledge and established manufacturing capabilities for the P-3 platform make them a logical and experienced provider for critical components like wing kits, suggesting a strong track record in this specific area.

What are the potential risks associated with the long-term sustainment of P-3 aircraft using these wing kits?

The primary risks associated with the long-term sustainment of P-3 aircraft, even with new wing kits, stem from the platform's age. The P-3 airframe has been in service for decades, and while components like wing kits are critical, other systems and structural elements may still face degradation or obsolescence. There's a risk of encountering unforeseen structural issues during integration or future operations. Furthermore, the availability of specialized maintenance personnel and unique spare parts for such an aging platform can become increasingly challenging and costly over time, potentially impacting the overall operational readiness and cost-effectiveness of the fleet.

How does this contract align with the broader strategic goals of U.S. Customs and Border Protection's aviation division?

This contract directly aligns with the strategic goals of U.S. Customs and Border Protection (CBP) by ensuring the continued operational capability of their P-3 Orion aircraft. These aircraft are vital for CBP's mission of border security, maritime patrol, and interdiction of illegal activities such as smuggling. By procuring new wing kits, CBP is investing in the sustainment and modernization of a key asset, enabling them to maintain and potentially enhance their aerial surveillance and response capabilities. This supports the overarching objective of securing U.S. borders and airspace.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 86 S COBB DR, MARIETTA, GA, 30063

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $22,071,498

Exercised Options: $22,071,498

Current Obligation: $22,071,498

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HSBP1008D01906

IDV Type: IDC

Timeline