Hellenic Navy P-3B Modernization Program awarded to Lockheed Martin for over $376 million
Contract Overview
Contract Amount: $376,391,571 ($376.4M)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2016-02-11
End Date: 2026-02-28
Contract Duration: 3,670 days
Daily Burn Rate: $102.6K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: IGF::OT::IGF HELLENIC NAVY P-3B MODERNIZATION PROGRAM
Place of Performance
Location: MARIETTA, COBB County, GEORGIA, 30063
State: Georgia Government Spending
Plain-Language Summary
Department of Defense obligated $376.4 million to LOCKHEED MARTIN CORP for work described as: IGF::OT::IGF HELLENIC NAVY P-3B MODERNIZATION PROGRAM Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Long contract duration of over 10 years suggests significant program scope. 3. Fixed-price contract type aims to control costs, but sole-source nature may limit savings. 4. Program focuses on aircraft modernization, a critical but complex undertaking. 5. No small business set-aside indicates a focus on large prime contractors. 6. The contract is for aircraft manufacturing, a specialized and high-value sector.
Value Assessment
Rating: fair
Benchmarking the value of this sole-source contract is challenging due to the lack of competitive bids. The fixed-price nature provides some cost control, but the absence of competition means potential savings from a competitive bidding process are unlikely to be realized. The total contract value of over $376 million for aircraft modernization is substantial and requires careful monitoring of performance and cost over its extended duration.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed. This approach is typically used when only one responsible source can provide the required goods or services. The lack of competition means that the government did not benefit from a range of proposals and potentially lower prices that could have resulted from an open bidding process.
Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure, as the contractor faced no direct rivals for this award.
Public Impact
The Hellenic Navy is the primary beneficiary, receiving modernized P-3B aircraft. This modernization effort enhances the operational capabilities of the Hellenic Navy's maritime patrol aircraft. The program supports the defense and security interests of Greece. The contract likely involves significant work for Lockheed Martin's aerospace manufacturing facilities. Potential indirect benefits to the aerospace workforce involved in the modernization process.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits transparency and potential cost savings.
- Long contract duration increases exposure to cost overruns and performance issues.
- Lack of competition may reduce incentives for contractor efficiency.
Positive Signals
- Fixed-price contract type provides a degree of cost certainty.
- Award to a major defense contractor suggests technical capability.
- Modernization of critical assets enhances national security capabilities.
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft modernization. This is a high-value, technology-intensive industry characterized by long development cycles and significant R&D investment. Comparable spending benchmarks would typically involve other major military aircraft upgrade programs, which often run into hundreds of millions of dollars.
Small Business Impact
The contract does not indicate any small business set-aside provisions, suggesting that the primary award was made to a large business entity, Lockheed Martin. There is no explicit information on subcontracting plans for small businesses. This approach typically means that the bulk of the work is performed by the prime contractor or its large subcontractors, potentially limiting direct opportunities for small businesses in this specific contract.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Navy and potentially the Department of Defense's Inspector General. Accountability measures would be tied to the contract's performance metrics and delivery schedules. Transparency may be limited due to the sole-source nature of the award, but contract modifications and performance reports should be available through federal procurement databases.
Related Government Programs
- P-3 Orion aircraft programs
- Naval aviation modernization contracts
- Foreign military sales aircraft programs
- Aerospace manufacturing contracts
Risk Flags
- Sole-source award
- Long contract duration
- Potential for cost overruns
- Limited competition
Tags
defense, department-of-defense, department-of-the-navy, lockheed-martin-corp, aircraft-manufacturing, definitive-contract, firm-fixed-price, sole-source, foreign-military-sales, georgia, p-3b-modernization, maritime-patrol
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $376.4 million to LOCKHEED MARTIN CORP. IGF::OT::IGF HELLENIC NAVY P-3B MODERNIZATION PROGRAM
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORP.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $376.4 million.
What is the period of performance?
Start: 2016-02-11. End: 2026-02-28.
What is the track record of Lockheed Martin in delivering complex aircraft modernization programs, particularly for P-3 variants?
Lockheed Martin has an extensive history with the P-3 Orion platform, having been the original manufacturer. They have been involved in various upgrades and sustainment programs for P-3 aircraft for numerous international customers. Their track record in complex aerospace programs is generally strong, marked by significant technological capabilities and experience in managing large-scale defense contracts. However, like many large defense programs, specific modernization efforts can face schedule delays or cost adjustments. For the Hellenic Navy's P-3B modernization, Lockheed Martin's deep familiarity with the aircraft type is a significant asset, potentially mitigating some risks associated with unfamiliar platforms.
How does the awarded price compare to similar P-3 modernization efforts or other large aircraft upgrade programs?
Direct comparison of the $376 million award for the Hellenic Navy P-3B modernization is difficult without detailed scope breakdowns and specific upgrade packages. However, major aircraft modernization programs, especially for legacy platforms like the P-3, often involve substantial costs due to avionics upgrades, structural repairs, and system integration. For instance, similar multi-year modernization efforts for other maritime patrol aircraft or fighter jets can range from tens to hundreds of millions of dollars per aircraft or for a fleet upgrade. The sole-source nature of this award means a direct competitive benchmark is absent, making it harder to definitively assess if the price is optimal. It is considered a significant investment typical for such specialized defense procurements.
What are the primary risks associated with a sole-source award for a long-duration aircraft modernization program?
The primary risks associated with a sole-source award for a long-duration aircraft modernization program include potential cost escalation beyond initial estimates due to the lack of competitive pressure, reduced contractor incentive to innovate or improve efficiency, and a greater reliance on the government's negotiation and oversight capabilities. For a program spanning over 10 years, there's also the risk of technological obsolescence if the modernization doesn't adequately future-proof the aircraft, and potential performance issues arising from the extended timeline. The government must ensure robust contract management and performance monitoring to mitigate these risks effectively.
What is the expected impact of this modernization on the Hellenic Navy's operational capabilities?
The modernization of the P-3B aircraft is expected to significantly enhance the Hellenic Navy's operational capabilities, particularly in maritime patrol, anti-submarine warfare (ASW), and intelligence, surveillance, and reconnaissance (ISR) missions. Upgraded avionics, sensors, and communication systems will improve situational awareness, targeting accuracy, and data-sharing. Extending the service life of these critical assets ensures the Navy maintains a robust capability to monitor its maritime domain, protect national interests, and contribute to regional security. This upgrade is vital for maintaining parity and effectiveness in its operational theater.
How does historical spending on P-3 aircraft sustainment and modernization by the US DoD or other allies inform the assessment of this contract?
Historical spending on P-3 aircraft sustainment and modernization by the US DoD and allies provides context for the significant investment required. The US Navy, for example, has undertaken extensive modernization and upgrade programs for its P-3 fleet over the years, often involving costs in the hundreds of millions of dollars for fleet-wide enhancements. These programs highlight the complexity and expense of keeping aging but capable platforms operationally relevant. They also underscore the importance of thorough planning and robust oversight to manage costs and ensure successful technology integration. The Hellenic Navy's program aligns with these broader trends in maintaining and upgrading maritime patrol capabilities.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 86 SOUTH COBB DR, MARIETTA, GA, 30063
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: $376,391,571
Exercised Options: $376,391,571
Current Obligation: $376,391,571
Subaward Activity
Number of Subawards: 179
Total Subaward Amount: $142,862,627
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2016-02-11
Current End Date: 2026-02-28
Potential End Date: 2026-02-28 00:00:00
Last Modified: 2024-09-06
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