DoD's $20.3M MTC Refurbishment Contract Awarded to Lockheed Martin Under Sole Source Basis
Contract Overview
Contract Amount: $20,273,186 ($20.3M)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2019-09-30
End Date: 2024-09-30
Contract Duration: 1,827 days
Daily Burn Rate: $11.1K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: MAJOR UNIT IDENTIFICATION NUMBER (MUIN) TEST CONSOLE (MTC) REFURBISHMENT EFFORT
Place of Performance
Location: KING OF PRUSSIA, MONTGOMERY County, PENNSYLVANIA, 19406
Plain-Language Summary
Department of Defense obligated $20.3 million to LOCKHEED MARTIN CORP for work described as: MAJOR UNIT IDENTIFICATION NUMBER (MUIN) TEST CONSOLE (MTC) REFURBISHMENT EFFORT Key points: 1. Significant investment in critical defense technology refurbishment. 2. Sole-source award to Lockheed Martin raises questions about competition and potential cost savings. 3. Long contract duration (5 years) may indicate complex refurbishment needs. 4. Engineering services sector is vital for maintaining advanced defense systems.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee contract type, combined with a sole-source award, offers limited transparency into the efficiency of the $20.3M expenditure. Benchmarking is difficult without comparable sole-source contracts for similar refurbishment efforts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive process.
Taxpayer Impact: The lack of competition for this $20.3M contract may result in suboptimal pricing, impacting taxpayer value.
Public Impact
Ensures continued operational readiness of critical defense identification systems. Potential for cost overruns due to sole-source, cost-plus contract structure. Limited public visibility into the specific refurbishment details and necessity.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Long contract duration
Positive Signals
- Supports critical defense infrastructure
- Awarded to established defense contractor
Sector Analysis
This contract falls within the Engineering Services sector, which is crucial for the maintenance and upgrade of complex defense systems. Spending in this sector is often characterized by specialized expertise and long-term requirements.
Small Business Impact
The award to Lockheed Martin, a large defense contractor, suggests no direct benefit or opportunity for small businesses in this specific contract action. Further analysis would be needed to determine if subcontractors involved are small businesses.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the fixed fee is reasonable and that costs are managed effectively throughout the contract's five-year duration.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition
- Cost-plus contract type
- Potential for cost overruns
- Limited transparency
- Long contract duration
Tags
engineering-services, department-of-defense, pa, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $20.3 million to LOCKHEED MARTIN CORP. MAJOR UNIT IDENTIFICATION NUMBER (MUIN) TEST CONSOLE (MTC) REFURBISHMENT EFFORT
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORP.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $20.3 million.
What is the period of performance?
Start: 2019-09-30. End: 2024-09-30.
What specific technical challenges or unique capabilities necessitated a sole-source award to Lockheed Martin for the MTC refurbishment?
A sole-source award typically implies that only one responsible source is capable of providing the required service or that a compelling justification exists for not seeking competition. For the MTC refurbishment, this could stem from proprietary technology, unique expertise held by Lockheed Martin, or urgent national security needs that preclude a lengthy competitive process. Further documentation from the agency would clarify the specific rationale.
How will the government ensure cost control and value for money under a Cost Plus Fixed Fee (CPFF) contract awarded on a sole-source basis?
With a CPFF contract, the government reimburses the contractor for allowable costs plus a fixed fee representing profit. To ensure value, the agency must rigorously audit costs, negotiate a fair fixed fee based on complexity and risk, and establish clear performance metrics. Continuous monitoring and strong contract management are essential to prevent cost overruns and ensure the refurbishment meets specifications.
What is the long-term strategy for the MTC system, and does this refurbishment align with future modernization plans or potential system replacements?
The five-year duration of this refurbishment contract suggests a significant overhaul. Understanding the MTC's role in the broader defense architecture is key. If the system is slated for obsolescence or replacement soon, investing heavily in refurbishment might not be cost-effective. Conversely, if it remains a critical component, this effort ensures its continued viability. Agency strategic documents would provide insight into this alignment.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
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: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 230 MALL BLVD, KING OF PRUSSIA, PA, 19406
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: $26,318,229
Exercised Options: $20,281,752
Current Obligation: $20,273,186
Actual Outlays: $2,621,677
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA821419D0001
IDV Type: IDC
Timeline
Start Date: 2019-09-30
Current End Date: 2024-09-30
Potential End Date: 2024-09-30 00:00:00
Last Modified: 2025-06-11
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