DoD awards $22.5M for supplemental spares, with Lockheed Martin securing the contract

Contract Overview

Contract Amount: $22,488,435 ($22.5M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2025-09-29

End Date: 2028-02-29

Contract Duration: 883 days

Daily Burn Rate: $25.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FY25 SUPPLEMENTAL SPARES

Place of Performance

Location: LIVERPOOL, ONONDAGA County, NEW YORK, 13088

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $22.5 million to LOCKHEED MARTIN CORPORATION for work described as: FY25 SUPPLEMENTAL SPARES Key points: 1. Value for money assessed against market benchmarks for similar defense components. 2. Competition dynamics indicate a full and open process, potentially driving competitive pricing. 3. Risk indicators include contract duration and the specialized nature of the components. 4. Performance context is tied to the Navy's operational readiness and sustainment needs. 5. Sector positioning within defense logistics and sustainment for critical aircraft systems.

Value Assessment

Rating: good

The contract value of $22.5 million for supplemental spares appears reasonable given the supplier and the specialized nature of aeronautical and nautical systems. Benchmarking against similar sole-source or limited-competition awards for advanced defense components suggests this pricing is within an expected range. However, a more precise value-for-money assessment would require detailed cost breakdowns and comparisons to non-proprietary market data for equivalent parts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting multiple bidders were likely considered. The open competition process is generally favorable for price discovery and ensuring the government receives competitive offers. The number of bidders and their specific proposals would provide further insight into the intensity of the competition and its impact on the final award price.

Taxpayer Impact: Taxpayers benefit from the competitive process, which aims to secure the best possible price for these essential defense spares, minimizing unnecessary expenditure.

Public Impact

The Department of the Navy benefits directly through enhanced readiness and reduced downtime for its aircraft fleet. Services delivered include the provision of critical spare parts essential for maintaining complex navigation and guidance systems. Geographic impact is primarily within the United States, supporting naval aviation bases and maintenance facilities. Workforce implications include supporting skilled labor in manufacturing and logistics within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price escalation over the contract duration if market conditions for raw materials or labor shift significantly.
Dependence on a single contractor for specialized spares could create future supply chain vulnerabilities if not managed proactively.
Ensuring timely delivery of spares is critical to avoid operational impacts on naval aviation readiness.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
Contract is for supplemental spares, suggesting a proactive approach to inventory management and readiness.
Fixed-price contract type helps to control costs and provides predictability for the government.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on the manufacturing and supply of critical components for military aircraft. The market for such specialized spares is often characterized by high barriers to entry due to technological complexity and stringent quality requirements. Comparable spending benchmarks would involve analyzing other Department of Defense contracts for similar system components and sustainment services.

Small Business Impact

While this contract was awarded to a large prime contractor, Lockheed Martin Corporation, the analysis does not indicate specific small business set-asides or subcontracting plans. Further investigation into the contract's subcontracting requirements would be necessary to determine the extent of small business participation and its impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. Accountability measures are embedded in the firm-fixed-price structure and delivery schedules. Transparency is facilitated through contract award databases, though detailed performance metrics and cost breakdowns may not be publicly available.

Related Government Programs

Department of Defense Aircraft Spare Parts Procurement
Naval Aviation Sustainment Programs
Lockheed Martin Defense Contracts
Navigation and Guidance System Manufacturing

Risk Flags

Long contract duration may increase risk of obsolescence or price volatility.
Dependence on a single large contractor for specialized spares requires careful supply chain management.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.5 million to LOCKHEED MARTIN CORPORATION. FY25 SUPPLEMENTAL SPARES

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 $22.5 million.

What is the period of performance?

Start: 2025-09-29. End: 2028-02-29.

What is Lockheed Martin Corporation's track record with the Department of the Navy for similar spare parts contracts?

Lockheed Martin Corporation has a long-standing and extensive track record of supplying complex systems and components to the Department of the Navy. This includes a wide range of aircraft, naval vessels, and associated support equipment. Their history with the Navy encompasses numerous contracts for spare parts, maintenance, and upgrades, often involving sophisticated technologies like navigation, guidance, and detection systems. While specific performance data for individual contracts is not always public, their continued selection for significant awards suggests a generally positive performance history and established relationship with the Navy's procurement and operational needs. Analyzing past contract values, delivery performance, and any documented issues or successes related to similar spare parts awards would provide a more granular understanding of their reliability and cost-effectiveness in this specific domain.

How does the awarded price compare to historical spending on similar supplemental spares by the Department of the Navy?

Comparing the $22.5 million award for supplemental spares to historical spending requires access to detailed historical contract data for similar items. The provided data indicates this is a delivery order under a larger contract, suggesting it's part of an ongoing sustainment effort. To benchmark effectively, one would need to identify previous awards for comparable aeronautical and nautical system spares, considering factors like quantity, specific part numbers, and the year of award to account for inflation. Without this granular historical data, a direct comparison is challenging. However, the full and open competition suggests an effort to achieve competitive pricing against market rates for these specialized components, which can be inferred as a positive step towards value for money compared to potentially less competitive historical awards.

What are the primary risks associated with this contract, and how are they being mitigated?

The primary risks associated with this contract include potential supply chain disruptions for specialized components, price volatility of raw materials, and ensuring timely delivery to meet operational demands. Given that Lockheed Martin is a major defense contractor, they likely have established mitigation strategies for supply chain resilience and quality control. The firm-fixed-price contract type helps mitigate cost overrun risks for the government. However, the long duration (ending Feb 2028) introduces risks related to potential obsolescence of technology or shifts in market demand. Mitigation for delivery risks would involve performance clauses within the contract and close monitoring by the Navy's program office. Proactive inventory management and potentially identifying alternative suppliers for critical sub-components could further reduce supply chain risks.

How effective is the full and open competition in ensuring the best value for taxpayers in this specific instance?

The full and open competition is a strong indicator that the Department of the Navy sought to achieve the best value for taxpayers by encouraging a wide range of potential suppliers to bid. This process typically drives down prices through competitive pressure and allows the government to select offers based on a combination of price, technical merit, and past performance. For specialized components like aeronautical and nautical system spares, the effectiveness hinges on whether the solicitation adequately defined requirements to attract qualified bidders and whether the evaluation criteria were robust. If the competition yielded multiple competitive bids, it significantly increases the likelihood that the awarded price reflects fair market value, thereby benefiting taxpayers by avoiding overpayment and ensuring efficient use of defense funds.

What is the expected impact of this contract on the readiness and operational capabilities of the Department of the Navy's fleet?

This contract is expected to have a positive impact on the readiness and operational capabilities of the Department of the Navy's fleet by ensuring the availability of critical spare parts. Supplemental spares are essential for maintaining complex systems, particularly those related to search, detection, navigation, guidance, and aeronautical/nautical instruments. By securing these parts through a dedicated contract, the Navy can reduce aircraft downtime, minimize maintenance delays, and ensure that its assets are mission-capable when needed. This directly supports operational effectiveness, allowing naval aviation units to conduct training, deployments, and combat missions without being hampered by a lack of necessary components for their sophisticated equipment.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0002418R6200

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 497 ELECTRONICS PKWY BLDG 5, LIVERPOOL, NY, 13088

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: $22,488,435

Exercised Options: $22,488,435

Current Obligation: $22,488,435

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0002419D6200

IDV Type: IDC

Timeline