Navy Awards $429M MH-60R Helicopter Contract to Lockheed Martin, Production Extended to 2029
Contract Overview
Contract Amount: $429,239,028 ($429.2M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2023-10-12
End Date: 2029-06-30
Contract Duration: 2,088 days
Daily Burn Rate: $205.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: AWARD OF MH-60R AIRCRAFT PRODUCTION CONTRACT FOR THE SPANISH ARMADA
Place of Performance
Location: OWEGO, TIOGA County, NEW YORK, 13827
State: New York Government Spending
Plain-Language Summary
Department of Defense obligated $429.2 million to LOCKHEED MARTIN CORPORATION for work described as: AWARD OF MH-60R AIRCRAFT PRODUCTION CONTRACT FOR THE SPANISH ARMADA Key points: 1. Significant award for naval aviation, impacting fleet readiness. 2. Sole-source nature raises questions about price discovery and competition. 3. Long-term contract duration suggests sustained demand and potential for cost efficiencies. 4. Focus on advanced helicopter production highlights critical defense capabilities.
Value Assessment
Rating: fair
The contract value of $429.2 million for 1 MH-60R aircraft appears high, especially given the sole-source nature. Benchmarking against similar sole-source awards for advanced military aircraft is difficult, but the lack of competition suggests potential for inflated pricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and may lead to higher costs for taxpayers as there is no competitive pressure to drive down prices.
Taxpayer Impact: The lack of competition in this sole-source award means taxpayers may be paying a premium for these aircraft, as market forces are not being leveraged to ensure the best possible price.
Public Impact
Enhances Spanish naval capabilities with advanced MH-60R helicopters. Supports critical maritime security and anti-submarine warfare missions. Long-term production ensures continued availability of a key defense asset. Potential impact on future defense procurement strategies for similar platforms.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price discovery.
- High contract value without competitive benchmarking.
- Long contract duration could mask inefficiencies.
Positive Signals
- Provides critical capability to an allied nation.
- Ensures continued production of a proven, advanced aircraft.
- Long-term commitment may offer some cost stability.
Sector Analysis
This award falls within the Defense sector, specifically Aircraft Manufacturing. Defense spending on advanced platforms like the MH-60R is substantial, with contracts often being long-term and sole-source due to specialized requirements and limited manufacturers.
Small Business Impact
The data indicates this contract was awarded to Lockheed Martin Corporation, a large prime contractor. There is no information provided regarding subcontracting opportunities for small businesses on this specific award.
Oversight & Accountability
The Department of the Navy awarded this contract. Oversight would typically involve program management reviews, cost tracking, and performance monitoring to ensure delivery and quality standards are met, especially given the sole-source nature.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award lacks competitive pressure.
- Potential for cost overruns due to lack of competition.
- Long contract duration increases exposure to market fluctuations.
- Limited transparency on specific cost components.
- No indication of small business participation.
Tags
aircraft-manufacturing, department-of-defense, ny, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $429.2 million to LOCKHEED MARTIN CORPORATION. AWARD OF MH-60R AIRCRAFT PRODUCTION CONTRACT FOR THE SPANISH ARMADA
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $429.2 million.
What is the period of performance?
Start: 2023-10-12. End: 2029-06-30.
What is the justification for awarding this contract sole-source, and what steps are being taken to ensure fair pricing?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or specific interoperability requirements that only one contractor can meet. To ensure fair pricing, the Department of Defense often conducts detailed cost analyses, reviews contractor cost proposals, and may negotiate profit margins. However, the absence of competition inherently limits the government's leverage in price discovery.
How does the per-unit cost of this MH-60R contract compare to previous awards or similar international procurements?
Without specific per-unit cost breakdowns or access to comparable international procurement data, it is difficult to definitively assess the value. However, given the sole-source nature and the advanced capabilities of the MH-60R, the per-unit cost is likely to be at the higher end. A thorough cost-benefit analysis would be needed to compare it against alternative solutions or previous, potentially competed, acquisitions.
What is the long-term strategic value of this contract for both the US and Spain, beyond the immediate acquisition of aircraft?
This contract strengthens interoperability between US and Spanish naval forces, enhancing collective maritime security and operational effectiveness. For the US, it supports a key defense industrial base capability and maintains a strong relationship with a NATO ally. For Spain, it provides a critical asset for defense and security missions, potentially improving their regional influence and defense posture.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1801 STATE RT 17 C, OWEGO, NY, 13827
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: $513,006,128
Exercised Options: $512,411,128
Current Obligation: $429,239,028
Subaward Activity
Number of Subawards: 133
Total Subaward Amount: $76,511,435
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0001921G0017
IDV Type: BOA
Timeline
Start Date: 2023-10-12
Current End Date: 2029-06-30
Potential End Date: 2029-06-30 00:00:00
Last Modified: 2025-07-15
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