Lockheed wins $750M contract to manage spare parts via vending machines

Lockheed Martin is getting into the vending machine business but it isn't for sodas and candy bars.

The company has won a lucrative logistics contract to support how the U.S. Air Force manages spare parts and the service wants a high-tech twist.

Lockheed was the incumbent going into the competition for the Air Force Generation III logistics program. Lockheed is what is known as an “industrial product support vendor.”

The company will run the system that manages spare parts at Air Force Air Logistics Complexes at Hill, Tinker and Robbins Air Force bases.

The contract is worth $750 million over five years.

Lockheed also was the prime on Generation II and received a bridge contract to continue its support through October of this year as the Air Force transition to the new contract. The company has managed the program for 11 years.

“Our ability to integrate technology seamlessly helped us achieve a 99.78 percent bin fill rate with virtually zero quality issues,” said Scott Martin, senior program manager of Lockheed Martin’s U.S. Air Force IPV.

The bins Martin refers to hold the parts maintenance workers need – think nuts, bolts, washers, etc.

Under the new contract Lockheed Martin will be responsible for automated vending machines, which will help control how parts are issued, increase accountability and improve demand planning, according to the Air Force.

Maintenance workers will use their Common Access Cards to access the machine and retrieve the part. Depending on the model of the vending machine, it can hold 500 to 2,000 parts.

Currently, the Air Force uses open bins that tip out. Workers reach in and grab what they need.

The Air force is hoping for better accountability and control as a way of lowering costs and creating efficiencies.

Lockheed will be graded on the accuracy of the parts dispensed by the AutoCribs. The Air Force expects a 99.5 percent accuracy rate.

Under the Generation II contract, Lockheed was responsible for 89,000 unique parts that filled nearly 250,000 bids. It was the Defense Department’s largest industrial product support vendor.