Lockheed Martin awarded $121.3M for electronics and communication R&D, with contract duration exceeding 9 years
Contract Overview
Contract Amount: $121,382,375 ($121.4M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 1996-12-05
End Date: 2005-12-31
Contract Duration: 3,313 days
Daily Burn Rate: $36.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Official Description: 199712!2100!0597!AB07 !USA COMM-ELECTRONICS COMMAND !DAAB0794CA515 !A!*!P00046 !19961205!19970930!835562950!835562950!834951691!N!04236!LOCKHEED MARTIN CORPORATION !12257 STATE HWY 121 LOC A !LITTLETON !CO!80127!45255!005!08!LITTLETON !ARAPAHOE !COLORADO !0001!+000014000000!N!N!000000000000!AC62!RDTE/ELECTRONICS & COMMUNICATION EQ-APPLIED RESEA !A7 !ELECTRONICS AND COMMUNICATION !1GCG!ALL SOURCE ANALYSIS SYS !8711!3!*!*!C!B!A!*!A !N!R!2!002!B!* !A!N!Z!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!
Place of Performance
Location: LITTLETON, JEFFERSON County, COLORADO, 80127
State: Colorado Government Spending
Plain-Language Summary
Department of Defense obligated $121.4 million to LOCKHEED MARTIN CORPORATION for work described as: 199712!2100!0597!AB07 !USA COMM-ELECTRONICS COMMAND !DAAB0794CA515 !A!*!P00046 !19961205!19970930!835562950!835562950!834951691!N!04236!LOCKHEED MARTIN CORPORATION !12257 STATE HWY 121 LOC A !LITTLETON !CO!80127!45255!005!08!LITTLETON !ARAPAH… Key points: 1. Contract value of $121.3M for applied research in electronics and communication equipment. 2. Awarded to Lockheed Martin Corporation, a major defense contractor. 3. Contract spans over 9 years, indicating a long-term research and development effort. 4. Primarily focused on Research, Development, Test, and Evaluation (RDTE) activities. 5. Awarded under full and open competition, suggesting a competitive bidding process. 6. The contract type is Cost Plus Award Fee (CPAF), which incentivizes performance. 7. Geographically located in Littleton, Colorado, with a significant portion of work performed there.
Value Assessment
Rating: good
The contract value of $121.3 million over a period of 9 years suggests a substantial investment in applied research for electronics and communication equipment. Benchmarking this against similar RDTE contracts requires detailed analysis of scope and duration, but the scale indicates a significant project. The Cost Plus Award Fee (CPAF) structure implies that pricing is tied to performance objectives, which can lead to better value if targets are met, but also carries inherent cost risks.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The specific number of bidders is not provided, but this competitive approach generally fosters price discovery and can lead to more favorable terms for the government compared to sole-source or limited competition scenarios. The government sought proposals from all responsible sources.
Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages a wider range of solutions and potentially lower prices through market forces, ensuring the government receives the best value for its investment.
Public Impact
The primary beneficiary is the Department of Defense, specifically the U.S. Army Communications-Electronics Command, which will receive advanced electronics and communication capabilities. Services delivered include applied research and development in electronics and communication equipment, aiming to enhance military operational effectiveness. The geographic impact is centered in Littleton, Colorado, where Lockheed Martin is located, potentially creating or sustaining high-skilled jobs in the region. Workforce implications include the employment of scientists, engineers, and technical staff at Lockheed Martin to conduct the research and development activities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (over 9 years) can sometimes lead to cost overruns if not managed tightly.
- CPAF contracts can be complex to administer and require robust performance metrics to ensure fair award fees.
- Reliance on a single large contractor for critical R&D may limit future competition if knowledge becomes proprietary.
Positive Signals
- Full and open competition suggests a robust market engagement and potential for competitive pricing.
- The CPAF structure incentivizes contractor performance, potentially leading to higher quality outcomes.
- Focus on applied research indicates a commitment to advancing technology for defense needs.
Sector Analysis
This contract falls within the Defense sector, specifically focusing on Research, Development, Test, and Evaluation (RDTE) for electronics and communication equipment. The market for defense electronics and communication systems is highly specialized, dominated by large aerospace and defense contractors. Spending in this area is driven by the need for technological superiority and modernization of military capabilities. Comparable spending benchmarks would involve analyzing other RDTE contracts for similar systems within the Department of Defense.
Small Business Impact
There is no explicit indication of a small business set-aside for this contract. Given the nature of advanced electronics and communication R&D and the prime contractor being Lockheed Martin, it is likely that any small business involvement would be through subcontracting. The extent of small business participation would depend on Lockheed Martin's subcontracting plan and the availability of specialized small businesses capable of contributing to the R&D effort.
Oversight & Accountability
Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor compliance with terms and conditions. Accountability measures are embedded within the Cost Plus Award Fee structure, linking payments to performance. Transparency is generally maintained through contract reporting requirements, though specific details of R&D progress may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Department of Defense Research and Development
- Communications and Electronics Equipment Procurement
- Advanced Technology Development Contracts
- Aerospace and Defense Industry Spending
Risk Flags
- Long contract duration may increase risk of cost escalation.
- CPAF structure requires careful performance monitoring.
- Technological risks inherent in RDTE projects.
Tags
defense, department-of-defense, us-army-communications-electronics-command, lockheed-martin-corporation, rdte, electronics-and-communication-equipment, applied-research, cost-plus-award-fee, full-and-open-competition, colorado, long-term-contract, major-contractor
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $121.4 million to LOCKHEED MARTIN CORPORATION. 199712!2100!0597!AB07 !USA COMM-ELECTRONICS COMMAND !DAAB0794CA515 !A!*!P00046 !19961205!19970930!835562950!835562950!834951691!N!04236!LOCKHEED MARTIN CORPORATION !12257 STATE HWY 121 LOC A !LITTLETON !CO!80127!45255!005!08!LITTLETON !ARAPAHOE !COLORADO !0001!+000014000000!N!N!000000000000!AC62!RDTE/ELECTRONICS & COMMUNICATION EQ-APPLIED RESEA !A7 !ELECTRONICS AND COMMUNICATION !1GCG!ALL SOURCE ANALYSIS SYS !8711!3!*!*!C!B!A!*!A !N!R!2!0
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 $121.4 million.
What is the period of performance?
Start: 1996-12-05. End: 2005-12-31.
What is the historical spending trend for similar electronics and communication R&D contracts awarded by the U.S. Army Communications-Electronics Command?
Analyzing historical spending trends for similar contracts requires access to comprehensive federal procurement data. However, generally, RDTE spending in electronics and communications has been a consistent priority for the DoD, driven by evolving threats and technological advancements. Contracts in this area can vary significantly in value and duration, from short-term applied research projects to multi-year development programs. Factors influencing spending include budget allocations, strategic priorities, and the pace of technological innovation. Without specific data on comparable contracts, it's difficult to provide precise historical figures, but the $121.3M award to Lockheed Martin for over 9 years suggests a significant, long-term investment in a critical capability area.
How does the performance of Lockheed Martin on previous contracts compare to the objectives of this award?
Assessing Lockheed Martin's performance on previous contracts requires a detailed review of their past performance records, including past performance evaluations (e.g., CPARS reports) and any documented issues or successes. Lockheed Martin is a major defense contractor with a long history of delivering complex systems. For this specific contract, the Cost Plus Award Fee (CPAF) structure implies that future performance will be directly measured against defined objectives. If their historical performance on similar R&D projects has been strong, it suggests a higher likelihood of meeting the objectives of this new award. Conversely, any past performance issues could indicate potential risks that warrant closer monitoring by the contracting agency.
What are the key performance indicators (KPIs) used to determine award fees for this contract?
The specific Key Performance Indicators (KPIs) used to determine award fees for this Cost Plus Award Fee (CPAF) contract are not publicly detailed in the provided data. However, for RDTE contracts in electronics and communication, KPIs typically revolve around technical achievement, schedule adherence, cost control, and innovation. Examples could include successful demonstration of new technologies, meeting specific performance metrics for signal processing or communication range, timely completion of research milestones, and staying within projected cost ceilings. The contracting officer and technical team would monitor progress against these defined criteria to determine the level of award fee granted.
What is the potential impact of this contract on the broader defense electronics market?
This contract, awarded to a major prime contractor like Lockheed Martin, can have a significant impact on the defense electronics market. It signals continued investment in advanced communication and electronic systems, potentially driving innovation and setting technological standards. The substantial value and long duration may influence R&D roadmaps for competitors and suppliers. Furthermore, it could lead to the development of proprietary technologies that shape future defense capabilities. The success of this project might also influence future contract awards in similar technology areas, potentially benefiting or challenging other firms in the sector.
Are there any identified risks associated with the technology being developed under this contract?
The provided data does not explicitly detail technological risks associated with this contract. However, any Research, Development, Test, and Evaluation (RDTE) contract, especially in advanced electronics and communication, inherently carries technological risks. These can include the feasibility of achieving desired performance, the integration of new technologies, potential obsolescence, and the emergence of unforeseen challenges during development. The Cost Plus Award Fee (CPAF) structure is partly designed to manage these risks by incentivizing the contractor to overcome technical hurdles efficiently. A thorough risk assessment would typically be conducted by the government during the proposal evaluation phase and continuously monitored throughout the contract lifecycle.
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 2
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Address: 12257 STATE HWY 121 LOC A, LITTLETON, CO, 90
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 1996-12-05
Current End Date: 2005-12-31
Potential End Date: 2005-12-31 00:00:00
Last Modified: 2012-03-12
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