DoD spent $17.9M on radar repair, with Lockheed Martin winning a sole-source contract

Contract Overview

Contract Amount: $17,935,389 ($17.9M)

Contractor: Lockheed Martin Corp

Awarding Agency: Department of Defense

Start Date: 2007-09-29

End Date: 2013-09-30

Contract Duration: 2,193 days

Daily Burn Rate: $8.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: REPAIR / REFURBISH SOLID STATE RADARS

Place of Performance

Location: KING OF PRUSSIA, MONTGOMERY County, PENNSYLVANIA, 19406, UNITED STATES OF AMERICA

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $17.9 million to LOCKHEED MARTIN CORP for work described as: REPAIR / REFURBISH SOLID STATE RADARS Key points: 1. The contract focused on repairing and refurbishing solid-state radars, a critical component for defense operations. 2. Awarded to Lockheed Martin, the contract highlights the reliance on established prime contractors for specialized defense equipment. 3. The duration of the contract (2193 days) suggests a long-term need for maintenance and support of these radar systems. 4. The contract type (Cost Plus Fixed Fee) indicates potential for cost overruns, requiring close monitoring. 5. The specific North American Industry Classification System (NAICS) code 811219 points to a niche market for electronic equipment repair. 6. The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES', suggesting a complex procurement history or specific justification for limited competition.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without more detailed cost breakdowns or comparisons to similar radar repair services. The Cost Plus Fixed Fee (CPFF) contract type can sometimes lead to higher costs than fixed-price contracts if not managed rigorously. The absence of readily available comparable contract data makes it difficult to definitively assess if the $17.9 million spent represents excellent value for money. Further analysis would be needed to understand the specific repair requirements and the market rates for such specialized services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES'. This procurement method suggests that while initial broad competition might have been considered, specific circumstances led to the exclusion of certain sources or a limited pool of bidders. The exact reasons for this exclusion are not detailed in the provided data, making it difficult to ascertain the full extent of competition. A limited competition environment can sometimes result in less favorable pricing for the government compared to full and open competition.

Taxpayer Impact: The limited competition nature of this award may have resulted in higher costs for taxpayers than if a broader range of qualified vendors had been able to bid. This underscores the importance of transparent justifications for excluding potential bidders.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Air Force, ensuring the operational readiness of critical radar systems. The services delivered include the repair and refurbishment of solid-state radars, essential for surveillance, targeting, and communication. The geographic impact is likely concentrated around Air Force bases where these radar systems are deployed and maintained. Workforce implications include the employment of skilled technicians and engineers specializing in radar systems maintenance and repair, both within the contractor's organization and potentially at government facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type introduces risk of cost overruns.
Limited competition ('FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES') may impact price competitiveness.
Long contract duration (2193 days) requires sustained oversight to ensure continued value.
Sole-source nature (implied by limited competition justification) can reduce negotiation leverage.

Positive Signals

Award to a major defense contractor (Lockheed Martin) suggests established capability and reliability.
Focus on critical radar systems supports national defense objectives.
Contract completion within the specified period (2007-2013) indicates successful delivery of services.

Sector Analysis

The contract falls within the broader aerospace and defense sector, specifically focusing on electronic systems maintenance and repair. The market for specialized defense equipment repair is often characterized by high barriers to entry due to technical expertise, security clearances, and established relationships with government agencies. Spending in this area is driven by the need to maintain the operational effectiveness of aging or complex military hardware. Comparable spending benchmarks would typically involve other contracts for similar radar system maintenance or upgrades across different military branches or allied nations.

Small Business Impact

The provided data indicates that small business participation was not a primary focus of this contract, as the award was made to Lockheed Martin and there is no indication of small business set-asides. There is no information on subcontracting plans for small businesses. This suggests that the specialized nature of the work likely required capabilities best met by large, established defense contractors, potentially limiting opportunities for small businesses in this specific procurement.

Oversight & Accountability

Oversight for this contract would have been managed by the Department of the Air Force, likely through contracting officers and program managers. Accountability measures would be tied to the Cost Plus Fixed Fee structure, requiring detailed reporting and justification of costs incurred. Transparency is assessed through the contract award process and the justification for the procurement method. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's lifecycle.

Related Government Programs

Air Force Radar Modernization Programs
Defense Logistics Agency (DLA) Maintenance, Repair, and Overhaul (MRO) Contracts
Solid-State Electronics Procurement
Electronic Warfare Systems Support

Risk Flags

Cost Plus Fixed Fee Contract Type
Limited Competition Justification
Sole Source Potential
Long Contract Duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.9 million to LOCKHEED MARTIN CORP. REPAIR / REFURBISH SOLID STATE RADARS

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORP.

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 $17.9 million.

What is the period of performance?

Start: 2007-09-29. End: 2013-09-30.

What specific types of solid-state radars were repaired under this contract, and what was their operational significance?

The provided data does not specify the exact models of solid-state radars repaired. However, solid-state radars are crucial for various military applications including air surveillance, missile tracking, weather monitoring, and ground target acquisition. Their significance lies in providing real-time situational awareness and enabling precise targeting. The repair and refurbishment of these systems are vital for maintaining the operational readiness and effectiveness of Air Force assets, ensuring they can perform their missions reliably in diverse and demanding environments. The longevity of the contract suggests these radars are core components of the Air Force's operational infrastructure.

How did the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' procurement method impact the final contract price compared to a truly open competition?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' (FOUCAES) method implies that while the solicitation was initially intended for broad competition, certain sources were later excluded based on specific criteria or justifications. This exclusion can limit the number of potential bidders, thereby reducing the competitive pressure on pricing. Without knowing the specific reasons for exclusion, it's difficult to quantify the exact price impact. However, generally, fewer bidders often lead to higher prices for the government compared to a scenario where all capable sources could compete freely. This procurement strategy necessitates a strong justification to ensure it serves the government's best interest.

What are the typical risks associated with a Cost Plus Fixed Fee (CPFF) contract for electronic repair services?

Cost Plus Fixed Fee (CPFF) contracts carry inherent risks, primarily related to cost control. The government agrees to pay the contractor's actual costs plus a predetermined fixed fee representing profit. This structure incentivizes the contractor to incur costs, as their profit (the fixed fee) remains constant regardless of the total cost. The primary risk for the government is potential cost overruns if the contractor's actual costs exceed initial estimates significantly. Effective oversight, detailed cost tracking, and robust negotiation are crucial to mitigate these risks and ensure the government receives fair value. For specialized electronic repair, unforeseen technical challenges can drive up costs, making vigilant management essential.

What is Lockheed Martin's track record in providing similar radar repair and maintenance services to the Department of Defense?

Lockheed Martin is a major defense contractor with extensive experience in developing, manufacturing, and supporting complex defense systems, including radar technology. They have a long-standing relationship with the Department of Defense and have been involved in numerous radar programs across various military branches. Their track record typically includes delivering sophisticated electronic systems and providing sustainment services. While specific performance metrics for this particular contract (2007-2013) are not detailed here, Lockheed Martin's overall presence in the defense sector suggests a high level of technical capability and established processes for managing such contracts. However, like any large contractor, performance can vary across individual contracts.

How does the $17.9 million spending on this contract compare to overall Air Force spending on radar maintenance and repair during the contract period?

Determining how $17.9 million compares to the overall Air Force spending on radar maintenance and repair during the 2007-2013 period requires access to broader budget and spending data for the Air Force's logistics and maintenance commands. This single contract represents a specific investment in solid-state radar refurbishment. The total Air Force budget is in the tens or hundreds of billions annually, with significant portions allocated to aircraft, systems, and sustainment. Without comparative data on the total number of radar systems, their maintenance schedules, and other concurrent repair contracts, it's difficult to place this $17.9 million in a precise context. It could represent a significant portion for a specific radar type or a smaller component of a larger sustainment effort.

What are the potential long-term implications of relying on a single prime contractor like Lockheed Martin for critical radar system sustainment?

Relying on a single prime contractor like Lockheed Martin for critical radar system sustainment can have several long-term implications. Positively, it can foster deep technical expertise and a streamlined support relationship, potentially leading to efficient maintenance and rapid response. However, it can also lead to vendor lock-in, reduced competition in future procurements, and potentially higher costs over time due to a lack of competitive pressure. Furthermore, it concentrates critical system knowledge within one entity, which could pose a risk if the contractor's business priorities shift or if they face financial instability. Maintaining a balance between leveraging established expertise and ensuring future competition is key for long-term strategic advantage.

Industry Classification

NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Other Electronic and Precision Equipment Repair and Maintenance

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 230 MALL BLVD, KING OF PRUSSIA, PA, 19406

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

Financial Breakdown

Contract Ceiling: $17,996,389

Exercised Options: $17,935,389

Current Obligation: $17,935,389

Contract Characteristics

Cost or Pricing Data: YES

Timeline