DoD awards $59M for airborne radar equipment to Lockheed Martin, raising value-for-money questions

Contract Overview

Contract Amount: $58,972,783 ($59.0M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2003-02-27

End Date: 2008-08-15

Contract Duration: 1,996 days

Daily Burn Rate: $29.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200305!000204!5700!GU72 !ASC/RWKR !F3365703C4301 !A!N! !N! !20030227!20060226!008398786!008398786!834951691!N!LOCKHEED MARTIN CORPORATION !1300 SOUTH LITCHFIELD ROAD!GOODYEAR !AZ!85338!28380!013!04!GOODYEAR !MARICOPA !ARIZONA !+000025085640!Y!N!000025085640!5841!RADAR EQUIPMENT, AIRBORNE !A1A!AIRFRAMES AND SPARES !3000!NOT DISCERNABLE OR CLASSIFIED !334511!E! !3! ! ! ! ! !99990909!B! ! !N!Z!A!U!J!2!001!B! !Z!N!Z!A !KS!N!C!N! ! ! !Z!Z!A!A!* !A!C!Y! ! ! !Y! ! !0001! !

Place of Performance

Location: GOODYEAR, MARICOPA County, ARIZONA, 85338

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $59.0 million to LOCKHEED MARTIN CORPORATION for work described as: 200305!000204!5700!GU72 !ASC/RWKR !F3365703C4301 !A!N! !N! !20030227!20060226!008398786!008398786!834951691!N!LOCKHEED MARTIN CORPORATION !1300 SOUTH LITCHFIELD ROAD!GOODYEAR !AZ!85338!28380!013!04!GOODYEAR !MARIC… Key points: 1. Contract value of $58.97M for airborne radar equipment. 2. Sole-source award to Lockheed Martin Corporation. 3. Contract duration of 1996 days (over 5 years). 4. No small business set-aside noted. 5. High-value contract in the Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing sector. 6. Geographic location of performance is Arizona.

Value Assessment

Rating: questionable

The contract value of $58.97M for airborne radar equipment warrants scrutiny, especially given the sole-source nature of the award. Without competitive bidding, it is difficult to benchmark the pricing against market rates or determine if the government received the best possible value. The duration of over five years also suggests a significant investment where cost-effectiveness is paramount. Further analysis would be needed to compare this pricing to similar systems or previous procurements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one responsible source can provide the required goods or services. The lack of competition means that the government did not benefit from the price discovery mechanisms inherent in a competitive bidding process, potentially leading to higher costs.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure to lower prices. The government's ability to negotiate the best possible price is diminished in sole-source situations.

Public Impact

The Department of Defense is the primary beneficiary, receiving critical airborne radar equipment. This equipment likely supports national security and defense operations. The contract's performance is based in Arizona, potentially impacting the local economy and workforce. The specific end-users and operational impact are not detailed but are presumed to be military aviation units.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
Long contract duration may not reflect evolving technology needs.
Lack of transparency on specific performance metrics.
No indication of small business participation or subcontracting.

Positive Signals

Award to a known defense contractor (Lockheed Martin) suggests established capabilities.
Firm Fixed Price contract type provides cost certainty for the government.
Contract duration aligns with the lifecycle of complex defense systems.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on the manufacturing of advanced radar systems. The market for such specialized equipment is often characterized by high barriers to entry, significant R&D investment, and a limited number of qualified suppliers. Comparable spending benchmarks would typically involve other large-scale defense procurements for similar technological capabilities, often running into tens or hundreds of millions of dollars.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the specialized nature of airborne radar equipment and the sole-source award to a large prime contractor, it is unlikely that small businesses were directly involved as the primary awardee. Subcontracting opportunities for small businesses may exist but are not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contract management and inspection agencies, such as the Defense Contract Management Agency (DCMA). Accountability measures would be tied to the terms of the Firm Fixed Price contract, requiring Lockheed Martin to deliver the specified radar equipment. Transparency is limited due to the sole-source nature and classification of defense procurements, but contract awards are generally reported.

Related Government Programs

Airborne Radar Systems Procurement
Defense Electronics Manufacturing
Aerospace Equipment Contracts
Department of Defense Major Weapon Systems

Risk Flags

Sole-source award
High contract value
Long contract duration
Lack of competition details

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $59.0 million to LOCKHEED MARTIN CORPORATION. 200305!000204!5700!GU72 !ASC/RWKR !F3365703C4301 !A!N! !N! !20030227!20060226!008398786!008398786!834951691!N!LOCKHEED MARTIN CORPORATION !1300 SOUTH LITCHFIELD ROAD!GOODYEAR !AZ!85338!28380!013!04!GOODYEAR !MARICOPA !ARIZONA !+000025085640!Y!N!000025085640!5841!RADAR EQUIPMENT, AIRBORNE !A1A!AIRFRAMES AND SPARES !3000!NOT DISCERNABLE OR CLASSIFIED !334511!E! !3! ! ! ! ! !99990909!B

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 $59.0 million.

What is the period of performance?

Start: 2003-02-27. End: 2008-08-15.

What is Lockheed Martin's track record with similar airborne radar systems contracts?

Lockheed Martin is a major defense contractor with extensive experience in developing and producing a wide range of aerospace and defense systems, including radar technology. While specific details on their past performance for this exact type of airborne radar system are not provided in this data snippet, the company has a long history of delivering complex systems to the U.S. military and allied nations. Their track record generally includes large-scale, high-value contracts. However, the performance on any specific contract can vary, and a deeper dive into past performance reviews, delivery timelines, and technical issue resolution for similar contracts would be necessary for a comprehensive assessment.

How does the $58.97M contract value compare to similar airborne radar equipment procurements?

Benchmarking the $58.97M contract value requires comparing it to procurements of similar airborne radar systems. Given that this is a sole-source award, direct price comparisons are challenging. However, the value is substantial and aligns with the typical cost of advanced military hardware. For context, other major defense contracts for radar systems, electronic warfare suites, or integrated avionics can range from tens of millions to hundreds of millions of dollars, depending on the system's complexity, capabilities, and quantity. Without knowing the specific technical specifications and quantity of units procured under this contract, a precise comparison is difficult. However, the amount suggests a significant investment in a critical defense capability.

What are the primary risks associated with this sole-source contract?

The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competitive bidding. Without multiple bidders vying for the contract, the government may not achieve the most cost-effective solution. Another risk is vendor lock-in, where the government becomes dependent on a single supplier for critical technology, potentially limiting future options or price negotiations. Furthermore, long-term contracts for complex systems carry risks related to technological obsolescence, performance shortfalls, and schedule delays, although the Firm Fixed Price nature of this contract shifts some financial risk to the contractor.

What is the expected program effectiveness or outcome of this contract?

The expected program effectiveness hinges on the successful delivery and performance of the airborne radar equipment by Lockheed Martin. This equipment is crucial for enhancing the Department of Defense's situational awareness, surveillance, and targeting capabilities. Effective radar systems are vital for mission success in various operational environments, contributing to national security. The contract's success will be measured by whether the delivered radar systems meet the specified technical requirements, perform reliably in operational conditions, and contribute to the overall effectiveness of the military platforms they are integrated into. The long duration suggests a sustained operational need.

What are the historical spending patterns for airborne radar equipment within the Department of Defense?

Historical spending patterns for airborne radar equipment within the Department of Defense are substantial and reflect the continuous need for advanced surveillance and targeting capabilities. The DoD consistently invests billions of dollars annually across various platforms (aircraft, drones, etc.) for radar systems, including search, detection, and targeting technologies. Spending fluctuates based on modernization programs, new platform development, and geopolitical requirements. Contracts for such systems are often long-term, sole-source or limited-competition due to the specialized nature and high R&D costs, leading to significant individual contract values like the one awarded to Lockheed Martin.

What specific type of airborne radar equipment is being procured, and what are its intended capabilities?

The data indicates the procurement is for 'RADAR EQUIPMENT, AIRBORNE' under the Product Service Code (PSC) 3430 (Radar Equipment). While the specific model or detailed capabilities are not provided, airborne radar systems generally serve functions such as target detection, tracking, navigation, weather monitoring, and electronic warfare support. Depending on the platform and mission, these systems can range from basic surveillance radars to highly sophisticated, multi-function phased-array radars capable of simultaneously tracking numerous targets in complex environments. The classification 'NOT DISCERNABLE OR CLASSIFIED' for the specific type suggests that detailed technical specifications may be sensitive.

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: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 1300 S LITCHFIELD RD STE 9, GOODYEAR, AZ, 85338

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

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline