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≈$4.41B Defense-wide DEFINITIVE CONTRACT FA862511C6597

A fourth five-year option contract for the C-130J at ~$4.4B — a different way of continuing than a multiyear (Lockheed Martin)

Defense Contract Management Agency ・2011-02-01 〜 2025-07-21

The Department of Defense has awarded Lockheed Martin about $4.41 billion under the fourth "five year option contract" (FYOC) for the C-130J transport aircraft. Unlike a multiyear, which commits several years of production at once, this fixes a price envelope five years out while leaving the buy decision to each year.

Contract key facts

  • RecipientLockheed Martin
  • Contract value$4,410,630,126 (≈$4.41B)
  • BranchDefense-wide
  • Awarding agencyDepartment of Defense
  • Awarding sub-agencyDefense Contract Management Agency
  • Award typeDEFINITIVE CONTRACT
  • Period of performance2011-02-01 〜 2025-07-21
  • Contract ID (PIID)FA862511C6597

Contract scope (original)

C-130J FIVE YEAR OPTION CONTRACT (FYOC) IV

Key points

  • The scope reads "C-130J FIVE YEAR OPTION CONTRACT (FYOC) IV"; recipient Lockheed Martin, value about $4.41 billion ($4,410,630,126 cumulative).
  • An option is a right the government may exercise later to order more, with quantity and price set in advance and the buy decision left to each year.
  • A multiyear commits several years and lowers unit cost; an option contract fixes price without commitment — a looser form.
  • "IV" marks this as the fourth such contract for the type.
  • Period February 1, 2011 to July 21, 2025. Aircraft counts and variants are not in the recorded scope.
  • A multiyear contract takes on an obligation to buy and lowers unit price; an option contract fixes the price without the obligation.

1Holding several years open with options

An option in federal acquisition is a right the government may exercise later to order more. Quantity and price are set within an envelope at contract time, while whether to buy is left to each year's decision. No obligation to buy, but the price is fixed if the decision is yes — that is the skeleton of a five-year option contract.

For the company, future orders are not certain, but materials can be arranged against an assumed price and quantity.

2How it differs from a multiyear

This site also holds multiyear contracts in the same aircraft field. A multiyear commits several years of production at once: the government takes on an obligation to buy, and in exchange the company can bring unit cost down through bulk arrangement. An option contract is looser, fixing price without commitment. Which is used depends on how certain demand is and how far ahead the budget can be committed. The "IV" marks this as the fourth such contract for the type.

3What the record shows

The value is about $4.41 billion cumulative, and the period runs from February 2011 to July 2025. Recorded outlays are about $448,455, but public outlay fields can be incompletely recorded depending on age and reporting route, so that cannot be read as an execution rate. How many aircraft, and which variants, are not in the recorded scope.

4Commit, or only fix the price

There are two ways to handle production several years out. This site holds both within the same aircraft field, and set side by side they show a choice between certainty and flexibility.

A multiyear contractAn option contract
Commits several years of production at onceLeaves the purchase to each year's judgement
The buyer takes on an obligation to buyNo obligation to buy is taken on
Bulk ordering lowers the unit priceThe firm can order material against a settled price and quantity
Budget is committed well aheadBudget flexibility is retained

The numeral IV marks the fourth time this form has been used on the same type. The amount is a cumulative $4.41 billion, with performance from February 2011 to July 2025. Recorded outlays are about $448 thousand, but the outlay column in public data can be incompletely recorded depending on era and reporting path, so it cannot be read as an execution rate. How many aircraft, and which variants, the source summary does not say.

Why it matters

For a company, an option contract fixes price while leaving orders uncertain, so movement in material prices or labor hours falls on the contractor. The government keeps budget flexibility in exchange. In production planning, whether a commitment exists divides decisions on capital investment and staffing, which gives practical value to reading contract form out of public data.

FAQ

What data is this?
A single Department of Defense (DoD) federal procurement contract recorded in "USAspending," the U.S. open government-spending dataset. The recipient, awarding component, value, and scope are public. This site is not an official U.S. government website.
Is the amount final?
It is a cumulative figure as of collection. Large defense contracts accumulate modifications over many years, so amounts change. The latest figure is available at the source, USAspending.
What is an option in federal acquisition?
A right the government may exercise later to order more. Quantity and price are set within an envelope at contract time, while whether to buy is left to each year's decision.
How does it differ from a multiyear?
A multiyear commits several years of production at once, obliging the government to buy and letting the company lower unit cost. An option contract is looser, fixing price without commitment.

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Sources (primary)

This article is an independent organization based on the U.S. official spending data below. Verify the exact, latest details with the official source.

#Defense#DoD#Air Force#Transport aircraft#Contract types#Option contract#Federal contracts

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