DoD awards $124M for aircraft engine support, with Lockheed Martin as prime contractor

Contract Overview

Contract Amount: $124,012,774 ($124.0M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2021-03-18

End Date: 2022-05-31

Contract Duration: 439 days

Daily Burn Rate: $282.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 8508067982!AF GEN III SUPPORT

Place of Performance

Location: MIDDLE RIVER, BALTIMORE County, MARYLAND, 21220

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $124.0 million to LOCKHEED MARTIN CORPORATION for work described as: 8508067982!AF GEN III SUPPORT Key points: 1. Contract value represents a significant investment in maintaining critical defense assets. 2. The award was made under full and open competition, suggesting a competitive bidding process. 3. The firm fixed-price contract type aims to control costs and provide predictability. 4. The contract duration of 439 days indicates a medium-term support requirement. 5. The prime contractor, Lockheed Martin, has extensive experience in aerospace and defense. 6. The specific North American Industry Classification System (NAICS) code points to a specialized manufacturing sector.

Value Assessment

Rating: good

The contract value of $124 million for aircraft engine support appears reasonable given the scope and the prime contractor's expertise. Benchmarking against similar contracts for complex defense systems is challenging without more specific details on the services and parts included. However, the firm fixed-price nature suggests an effort to manage costs effectively. The absence of reported cost overruns or significant modifications in the provided data also points towards a well-managed engagement.

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 a bid. The specific number of bidders is not provided, but this procurement method generally fosters a competitive environment, which can lead to better pricing and innovation. The Defense Logistics Agency's commitment to open competition suggests a desire to leverage the broadest possible market for these critical aircraft engine support services.

Taxpayer Impact: Taxpayers benefit from full and open competition through potentially lower prices and a wider array of solutions, ensuring that the government receives the best value for its investment in defense readiness.

Public Impact

The primary beneficiaries are the U.S. Air Force and potentially other branches of the Department of Defense requiring support for specific aircraft engines. The services delivered likely include maintenance, repair, overhaul, and provision of spare parts for aircraft engines. The geographic impact is likely national, supporting military bases and operations across the United States and potentially overseas. The contract supports a specialized segment of the aerospace manufacturing and maintenance workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future contract renewals if competition diminishes.
Dependence on a single prime contractor for critical engine support could pose a risk if performance issues arise.

Positive Signals

Awarded under full and open competition, indicating a robust market.
Firm fixed-price contract type helps control costs.
Prime contractor has significant experience in the aerospace sector.
Contract is for essential defense support, ensuring operational readiness.

Sector Analysis

The aerospace and defense industry is characterized by high barriers to entry, significant R&D investment, and long product lifecycles. This contract falls within the aircraft engine manufacturing and support sub-sector, which is a critical component of national defense capabilities. Spending in this area is often driven by fleet readiness requirements and the need to maintain aging aircraft. Comparable spending benchmarks would typically involve other major engine support contracts for military aircraft, often running into hundreds of millions or billions of dollars over their lifecycle.

Small Business Impact

The provided data indicates that small business participation (sb) was false and that there was no small business set-aside (ss). This suggests that the contract was not specifically targeted towards small businesses. While the prime contractor is a large corporation, there may be opportunities for small businesses to participate as subcontractors, though this is not explicitly detailed in the award information. The impact on the small business ecosystem would depend on the subcontracting plans, if any, put in place by Lockheed Martin.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Logistics Agency (DLA) and the Department of Defense (DoD) contracting officers. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified services and parts. Transparency is facilitated through contract databases like FPDS-NG, which publish award details. The DoD Inspector General's office would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.

Related Government Programs

Aircraft Engine Maintenance and Repair
Defense Logistics Agency Procurement
Lockheed Martin Defense Contracts
Air Force Aircraft Support
Aerospace Manufacturing Support

Risk Flags

Potential for cost overruns if not managed tightly
Dependence on a single prime contractor
Supply chain risks for specialized parts

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $124.0 million to LOCKHEED MARTIN CORPORATION. 8508067982!AF GEN III SUPPORT

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $124.0 million.

What is the period of performance?

Start: 2021-03-18. End: 2022-05-31.

What is the historical spending trend for aircraft engine support by the Defense Logistics Agency?

Analyzing historical spending trends for aircraft engine support by the Defense Logistics Agency (DLA) requires access to comprehensive contract databases over multiple fiscal years. Generally, spending in this category fluctuates based on fleet modernization programs, the age of aircraft in service, and geopolitical demands. The DLA, as a primary logistics provider, manages a vast portfolio of contracts, and engine support is a recurring and significant expenditure. Without specific historical data for this particular engine type or similar contracts, it's difficult to pinpoint precise trends. However, it is reasonable to assume that spending remains consistently high due to the critical nature of aircraft readiness and the high cost of maintaining complex jet engines. Factors like the sustainment of legacy fleets versus the introduction of new aircraft can significantly influence year-over-year spending patterns.

How does the awarded price compare to industry benchmarks for similar aircraft engine support contracts?

Directly comparing the $124 million award for aircraft engine support to industry benchmarks is challenging without granular details on the specific engine model, the scope of work (e.g., depot-level maintenance, component repair, spare parts provisioning), and the contract duration. However, given that Lockheed Martin is the prime contractor and the contract is for a significant defense agency, the price point is likely within the expected range for complex, high-value defense sustainment services. Industry benchmarks for such contracts often involve multi-year agreements that can reach hundreds of millions or even billions of dollars. The firm fixed-price nature of this award suggests an effort to achieve cost certainty, which is a common objective in defense contracting. Further analysis would require access to proprietary industry data or more detailed public contract information to establish a precise value-for-money assessment.

What are the key performance indicators (KPIs) used to evaluate Lockheed Martin's performance under this contract?

While the specific Key Performance Indicators (KPIs) for this contract are not publicly detailed, defense contracts of this nature typically include metrics focused on delivery timeliness, quality of service, technical performance, and cost control. For aircraft engine support, KPIs might include the Mean Time Between Failures (MTBF) for repaired components, on-time delivery rates for spare parts, adherence to maintenance schedules, and compliance with technical orders and specifications. Performance might also be assessed based on the contractor's ability to meet surge requirements or reduce turnaround times for critical repairs. The Defense Logistics Agency (DLA) would likely have a robust performance management system in place, potentially involving contractor performance assessment reporting (CPARs), to track Lockheed Martin's adherence to these KPIs throughout the contract period.

What is the track record of Lockheed Martin in fulfilling similar aircraft engine support contracts for the DoD?

Lockheed Martin has a long and extensive track record of supporting U.S. Department of Defense (DoD) aviation programs, including complex aircraft engine sustainment. As a major defense contractor, the company is involved in the lifecycle support of numerous aircraft platforms, which inherently includes engine maintenance, repair, and overhaul services. Their experience spans various engine types and military aircraft, often involving firm fixed-price contracts and long-term sustainment agreements. While specific performance details for every contract are not always public, Lockheed Martin is generally recognized for its capabilities in managing large-scale, technically demanding defense logistics and maintenance programs. Historical data from contract performance reports (CPARs) and program reviews would provide a more detailed assessment of their past performance on similar contracts.

What are the potential risks associated with sole-sourcing or limited competition for critical defense components like aircraft engines?

The risk associated with sole-sourcing or limited competition for critical defense components like aircraft engines primarily revolves around reduced price competition, potentially leading to higher costs for the government. Limited competition can also stifle innovation, as contractors may have less incentive to develop more efficient or cost-effective solutions when faced with fewer rivals. Furthermore, a sole-source or limited-source situation can create dependency on a single supplier, increasing vulnerability to supply chain disruptions, performance issues, or the contractor's strategic business decisions. For the DoD, this necessitates robust oversight, negotiation strategies, and potentially investing in organic capabilities or fostering alternative sources to mitigate these risks over the long term.

How does this contract contribute to the overall readiness and operational capability of the U.S. Air Force or other relevant branches?

This contract is crucial for maintaining the operational readiness and capability of the U.S. Air Force and potentially other branches that utilize the specific aircraft engines supported. Aircraft engines are the heart of any aircraft, and their reliable performance is paramount for mission success, whether for combat, transport, or training. By ensuring that these engines are properly maintained, repaired, and have access to necessary parts, the contract directly contributes to the availability of aircraft for operational deployment. This sustainment effort prevents mission delays, reduces the risk of in-flight failures, and extends the service life of valuable military assets, thereby preserving the overall combat effectiveness and strategic posture of the armed forces.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 2323 EASTERN BLVD, BALTIMORE, MD, 21220

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: $124,012,774

Exercised Options: $124,012,774

Current Obligation: $124,012,774

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE4AX17D9006

IDV Type: IDC

Timeline