Lockheed Martin awarded $312M for Air Force's ATP-SE initial pods and test support

Contract Overview

Contract Amount: $312,389,857 ($312.4M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2010-09-30

End Date: 2014-12-15

Contract Duration: 1,537 days

Daily Burn Rate: $203.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ATP-SE INITIAL PODS AND TEST SUPPORT

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32819, UNITED STATES OF AMERICA

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $312.4 million to LOCKHEED MARTIN CORPORATION for work described as: ATP-SE INITIAL PODS AND TEST SUPPORT Key points: 1. Contract value represents a significant investment in advanced aerospace technology. 2. Competition dynamics suggest a robust market for specialized defense systems. 3. Performance risk is moderate given the complexity of aerospace testing. 4. This contract supports critical Air Force operational capabilities. 5. The award falls within the broader defense electronics and systems manufacturing sector. 6. Firm Fixed Price contract type aims to control costs for the government.

Value Assessment

Rating: good

The contract's value of $312 million for initial pods and test support appears reasonable for a complex defense system. Benchmarking against similar large-scale aerospace development and testing contracts would provide further context. The firm fixed-price structure suggests an expectation of cost control, but detailed cost breakdowns are not publicly available to fully assess value-for-money. The duration of the contract (over 4 years) indicates a substantial scope of work.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. This approach generally fosters competitive pricing and encourages innovation. The specific number of bidders is not detailed, but the 'full and open' designation suggests a healthy level of market interest and participation for this type of specialized defense system.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically leads to more competitive pricing and a wider range of innovative solutions, maximizing the value of government spending.

Public Impact

The U.S. Air Force is the primary beneficiary, receiving advanced pod systems and crucial test support. This contract directly contributes to the enhancement of aerial combat and surveillance capabilities. The geographic impact is centered in Florida, where Lockheed Martin's operations are located. It supports a specialized workforce within the aerospace and defense industry, including engineers and technicians.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if testing phases encounter unforeseen technical challenges.
Dependence on a single prime contractor for critical system development and integration.

Positive Signals

Firm Fixed Price contract structure provides cost certainty for the government.
Full and open competition suggests a competitive environment that can drive efficiency.
Award to a major defense contractor with a proven track record in aerospace systems.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on system manufacturing and integration for airborne platforms. The market for such specialized components and testing services is dominated by a few large, established defense contractors. Spending in this area is driven by national security requirements and technological advancements in military aviation. Comparable spending benchmarks would involve other major defense system development contracts.

Small Business Impact

There is no indication of small business set-asides for this particular contract. However, as a large prime contract awarded to Lockheed Martin, there is potential for subcontracting opportunities to flow down to small businesses within the aerospace supply chain. The extent of small business participation will depend on Lockheed Martin's subcontracting plan and the availability of qualified small business vendors for specific components or services.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Air Force contracting and program management offices. Accountability measures are embedded in the contract's performance requirements and delivery schedules. Transparency is facilitated through contract award announcements and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Advanced Aerial Pod Systems
Aerospace Systems Integration
Defense Electronics Manufacturing
Military Test and Evaluation Services
Air Force Research and Development

Risk Flags

Technical Complexity
Schedule Adherence
Cost Control
System Integration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $312.4 million to LOCKHEED MARTIN CORPORATION. ATP-SE INITIAL PODS AND TEST SUPPORT

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $312.4 million.

What is the period of performance?

Start: 2010-09-30. End: 2014-12-15.

What is Lockheed Martin's track record with similar Air Force contracts?

Lockheed Martin Corporation has a long and extensive history of contracting with the U.S. Department of Defense, including numerous awards from the Air Force for complex aerospace systems. They are a primary contractor for major programs such as the F-35 fighter jet, C-130 transport aircraft, and various missile systems. Their track record generally indicates a capacity to handle large, technologically advanced projects, though like any major defense contractor, they have faced scrutiny and performance challenges on specific programs over the years. This specific contract for ATP-SE initial pods and test support builds upon their established expertise in airborne systems and integration.

How does the $312 million award compare to similar defense system development contracts?

The $312 million award for ATP-SE initial pods and test support is a substantial sum, characteristic of major defense system development and integration contracts. To provide a precise comparison, one would need to analyze contracts for similar scope, such as the development of new sensor pods, electronic warfare systems, or specialized mission equipment for fighter or bomber aircraft. Contracts for entirely new aircraft platforms or major upgrades typically run into billions of dollars. However, for a specific subsystem like initial pods and associated testing, $312 million falls within the expected range for a firm-fixed-price award to a prime contractor like Lockheed Martin, especially considering the complexity and R&D involved.

What are the primary risks associated with this type of contract?

The primary risks associated with this contract include technical risks, such as unforeseen challenges in designing, manufacturing, and integrating the initial pods and ensuring their compatibility with existing Air Force platforms. Performance risks involve meeting stringent delivery schedules and performance specifications. Cost risks, while mitigated by the firm-fixed-price structure, could still arise from scope creep or contractor inefficiencies not fully captured. Schedule risks are also significant, as delays in pod development or testing could impact broader Air Force operational readiness or future program phases. Finally, there are potential supply chain risks for specialized components.

How effective is the firm-fixed-price contract type in managing costs for this program?

The firm-fixed-price (FFP) contract type is generally considered effective in managing costs for programs where the scope of work is well-defined and technical risks are understood. For the ATP-SE initial pods and test support, FFP places the primary cost risk on the contractor, Lockheed Martin. This incentivizes the contractor to control costs and improve efficiency to maximize profit. However, if unforeseen technical challenges arise that significantly alter the scope or require extensive rework, the contractor may seek change orders, potentially increasing the total cost. The effectiveness also depends on the government's ability to clearly define requirements upfront and manage contract modifications judiciously.

What are the historical spending patterns for similar Air Force pod systems and test support?

Historical spending patterns for Air Force pod systems and associated test support vary widely depending on the complexity, technological advancement, and quantity of the systems. Major programs involving advanced targeting pods, electronic warfare pods, or reconnaissance pods have historically represented significant investments, often in the hundreds of millions of dollars over their lifecycle. Test and evaluation phases are critical and can consume a substantial portion of the overall contract value, particularly for novel systems requiring extensive flight testing and data analysis. The $312 million for initial pods and test support aligns with the typical investment required for developing and validating new, sophisticated airborne equipment for the Air Force.

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: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 5600 W SAND LAKE RD # MP-265, ORLANDO, FL, 32819

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $312,389,857

Exercised Options: $312,389,857

Current Obligation: $312,389,857

Subaward Activity

Number of Subawards: 42

Total Subaward Amount: $12,916,459

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA862610D2133

IDV Type: IDC

Timeline