DoD awards $213.7M for RSAF Sustainment to Lockheed Martin, a sole-source contract
Contract Overview
Contract Amount: $213,711,389 ($213.7M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2015-10-30
End Date: 2023-05-31
Contract Duration: 2,770 days
Daily Burn Rate: $77.2K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: IGF::OT::IGFT: RSAF SUSTAINMENT
Place of Performance
Location: ORLANDO, ORANGE County, FLORIDA, 32819
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $213.7 million to LOCKHEED MARTIN CORPORATION for work described as: IGF::OT::IGFT: RSAF SUSTAINMENT Key points: 1. Contract awarded to a single, established vendor, limiting competitive pricing. 2. Significant value suggests critical system sustainment for the Department of Defense. 3. Sole-source nature raises concerns about price discovery and potential overpayment. 4. The sector is Defense, specifically focusing on navigation and guidance systems.
Value Assessment
Rating: questionable
The contract's firm fixed price structure is standard, but the lack of competition makes it difficult to assess if the $213.7M price is optimal. Benchmarking against similar sustainment contracts for complex defense systems would be necessary for a thorough evaluation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This method bypasses competitive bidding, potentially leading to higher costs for taxpayers as there is no market pressure to drive down prices.
Taxpayer Impact: The lack of competition in this sole-source award may result in taxpayers paying a premium for the RSAF sustainment services.
Public Impact
Ensures continued operational readiness of critical defense systems. Potential for higher costs due to lack of competitive bidding. Dependence on a single contractor for essential sustainment.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for cost overruns
Positive Signals
- Essential defense system sustainment
- Firm fixed price contract
Sector Analysis
This contract falls within the Defense sector, specifically supporting navigation and guidance systems. Spending in this area is critical for national security, but often involves high costs due to specialized technology and limited vendor pools.
Small Business Impact
There is no indication that small businesses were involved in this sole-source contract, which is typical for large, specialized defense sustainment efforts. Future opportunities for small businesses may lie in subcontracting roles.
Oversight & Accountability
The Department of Defense, through the Defense Contract Management Agency, is responsible for overseeing this contract. However, the sole-source nature limits the agency's ability to ensure the best possible price through competition.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award
- Lack of competitive bidding
- Potential for price escalation
- Contractor lock-in
Tags
search-detection-navigation-guidance-aer, department-of-defense, fl, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $213.7 million to LOCKHEED MARTIN CORPORATION. IGF::OT::IGFT: RSAF SUSTAINMENT
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 Contract Management Agency).
What is the total obligated amount?
The obligated amount is $213.7 million.
What is the period of performance?
Start: 2015-10-30. End: 2023-05-31.
What is the justification for this contract being sole-source, and what steps were taken to ensure fair and reasonable pricing without competition?
Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. For this contract, the justification would likely stem from unique capabilities or proprietary technology held by Lockheed Martin for the RSAF system. The agency should have conducted a price analysis, comparing proposed costs to historical data, independent cost estimates, or commercial pricing for similar items to ensure fairness.
What are the long-term risks associated with relying on a sole-source provider for critical defense system sustainment?
Long-term reliance on a sole-source provider can lead to vendor lock-in, where the government becomes dependent on a single entity, potentially at inflated prices. It can also stifle innovation as there's less incentive for the contractor to improve efficiency or offer competitive pricing. Furthermore, it creates a significant risk if the sole provider faces financial difficulties or decides to exit the market.
How does the firm fixed price contract type mitigate or exacerbate the risks associated with this sole-source award?
A firm fixed price (FFP) contract aims to transfer risk from the government to the contractor, providing cost certainty. In this sole-source scenario, while the government has price certainty, it doesn't guarantee the price is the best achievable. The FFP structure can exacerbate the risk of overpayment if the contractor's costs are significantly lower than anticipated, as the government bears the full cost without competitive pressure to reduce it.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp
Address: 5600 W SAND LAKE RD # MP-265, ORLANDO, FL, 32819
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: $213,711,389
Exercised Options: $213,711,389
Current Obligation: $213,711,389
Subaward Activity
Number of Subawards: 14
Total Subaward Amount: $6,114,177
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA854016D0001
IDV Type: IDC
Timeline
Start Date: 2015-10-30
Current End Date: 2023-05-31
Potential End Date: 2023-05-31 00:00:00
Last Modified: 2023-06-30
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