Lockheed Lands A Big One: $5B From U.S. Special Ops

With the win, Lockheed bested L-3 Communications Holdings, which had previously held the contract.

Lockheed, the world's largest defense contractor, is guaranteed at least $2.5 million in what the Pentagon described as an "indefinite delivery, indefinite quantity contract with mixed payment provisions including firm fixed price, incentive arrangements and cost reimburseable arrangements for contractor logistics support services in support of U.S. Special Operations Command worldwide."

The work will be performed at Special Operations Forces Support Activity in Lexington, Ky., and other locations worldwide, the Pentagon said, and extends from March 2, 2009, to March 1, 2018.

"We do have a strong presence in the logistics arena and this contract builds on that," said Judy Gan, a Lockheed spokesperson, in an interview with Bloomberg news.

Various news reports said Boeing was also in the running for what the Pentagon said was an open competition contract. The loss for L-3 is considered major; according to a September L-3 statement linked by several reports, L-3 had been the prime contractor for the Special Operations Forces Support Activity for two decades.

According to Bethesda, Md.-based Lockheed, the company's focused logistics support includes depot and field-services aircraft, major modification and upgrade programs, lean manufacturing, launch and recovery and other services.

Lockheed's latest financials continue to demonstrate the defense sector's resilience in the economic downturn. In January, Lockheed's Information Systems and Global Services group for its fourth quarter reported $3.3 billion in sales (up from $2.8 billion in 2007) and for the year reported $11.6 billion in sales (up from $10.2 billion in 2007).

Of Lockheed's other three divisions--Electronics Systems, Aeronautcs and Space Systems--Electronics also saw gains. Overall, Lockheed reported full-year sales up 2 percent, to $42.7 billion.