Lockheed Martin awarded $98.9M for search and detection systems, with a 5-year contract duration

Contract Overview

Contract Amount: $98,913,854 ($98.9M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2011-06-21

End Date: 2016-06-21

Contract Duration: 1,827 days

Daily Burn Rate: $54.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SEARCH, DETECTION, NVGTN, GUID, AERONAUTICAL,&NAUTICAL SYST&INSTR MFG

Place of Performance

Location: LIVERPOOL, ONONDAGA County, NEW YORK, 13088

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $98.9 million to LOCKHEED MARTIN CORPORATION for work described as: SEARCH, DETECTION, NVGTN, GUID, AERONAUTICAL,&NAUTICAL SYST&INSTR MFG Key points: 1. Contract value of nearly $100 million indicates significant investment in advanced sensor technology. 2. The firm fixed-price structure suggests a clear understanding of project scope and cost control. 3. A single award for this amount may warrant scrutiny for potential competition limitations. 4. The 5-year duration points to a long-term need for these critical defense systems. 5. Focus on search, detection, navigation, and guidance systems highlights strategic defense priorities. 6. Geographic location in New York for the contractor may have implications for supply chain and labor.

Value Assessment

Rating: good

The contract value of $98.9 million for search, detection, and navigation systems appears reasonable given the 5-year duration and the specialized nature of the equipment. Benchmarking against similar large-scale defense system procurements would provide a more precise value-for-money assessment. The firm fixed-price contract type suggests that the government has a clear understanding of the requirements and has negotiated a price that is expected to cover all costs and profit.

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 solicited. The specific number of bidders is not provided, but the 'full and open' designation suggests a competitive process was intended. This approach is generally favorable for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: A full and open competition process aims to leverage market forces to secure the best possible pricing and technological solutions for taxpayers.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Air Force, which will receive advanced search, detection, navigation, and guidance systems. These systems are crucial for national security operations, enhancing situational awareness and operational capabilities. The contract supports the manufacturing sector and potentially high-skilled jobs within Lockheed Martin's New York facilities. The ultimate impact is on the effectiveness and readiness of U.S. military forces.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific bidder count in 'full and open' competition limits full understanding of competitive intensity.
Contract duration of 5 years could lead to price escalation if market conditions change significantly.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Awarded under full and open competition, suggesting a robust bidding process.
Long-term contract indicates a sustained need and potential for stable supplier relationships.

Sector Analysis

The contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' industry, a critical segment of the aerospace and defense sector. This sector is characterized by high R&D investment, long product development cycles, and significant government procurement. Spending in this area is driven by national security requirements and technological advancements. Comparable spending benchmarks would typically involve other large-scale system integration and manufacturing contracts within defense.

Small Business Impact

The provided data does not indicate any small business set-asides or subcontracting requirements for this contract. As a large-value definitive contract awarded to a major defense contractor, it is unlikely to have a direct small business set-aside component. However, Lockheed Martin may engage small businesses as subcontractors, which would contribute to the broader small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices. The firm fixed-price nature provides a degree of accountability for cost. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Advanced Research Projects Agency (DARPA) research programs
Air Force Research Laboratory (AFRL) development contracts
Naval Air Systems Command (NAVAIR) procurements
Intelligence, Surveillance, and Reconnaissance (ISR) systems

Risk Flags

Potential for cost escalation over the 5-year duration.
Risk of technological obsolescence by contract end.
Limited insight into the intensity of the 'full and open' competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $98.9 million to LOCKHEED MARTIN CORPORATION. SEARCH, DETECTION, NVGTN, GUID, AERONAUTICAL,&NAUTICAL SYST&INSTR MFG

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 $98.9 million.

What is the period of performance?

Start: 2011-06-21. End: 2016-06-21.

What is Lockheed Martin's track record with similar large-scale defense system contracts?

Lockheed Martin Corporation is a major defense contractor with extensive experience in developing and producing complex defense systems, including radar, surveillance, and navigation technologies. They have a long history of securing large, multi-year contracts with the Department of Defense and other government agencies. Their track record includes significant programs in areas such as fighter aircraft (F-35), missile defense, and space systems. While this specific contract focuses on search and detection, it aligns with their core competencies. Past performance reviews and contract close-outs for similar endeavors would provide a more granular assessment of their execution capabilities, on-time delivery, and adherence to specifications.

How does the $98.9 million value compare to similar procurements for search and detection systems?

The $98.9 million contract value over five years for search, detection, navigation, and guidance systems is substantial but needs to be contextualized within the defense procurement landscape. Similar large-scale system procurements, especially those involving advanced sensor technology, radar, or integrated navigation suites, can range from tens of millions to billions of dollars depending on complexity, quantity, and technological sophistication. For instance, procurements for next-generation radar systems or advanced electronic warfare suites often exceed this value. A direct comparison would require identifying contracts with identical or highly similar North American Industry Classification System (NAICS) codes and functional requirements. However, given the duration and the nature of the systems, this award appears to be within the expected range for a significant defense capability upgrade or sustainment.

What are the primary risks associated with a 5-year firm fixed-price contract for advanced systems?

A primary risk with a 5-year firm fixed-price contract for advanced systems is the potential for cost overruns on the contractor's side if material costs, labor rates, or unforeseen technical challenges escalate beyond initial projections. Conversely, if the government's requirements evolve significantly over the contract period, scope creep could become an issue, potentially leading to change orders and increased costs. Technological obsolescence is another risk; by the end of the 5-year period, the systems might be less advanced than emerging technologies. The contractor bears the risk of performance and cost, while the government risks receiving a system that may not meet future operational needs or could have been procured at a lower price if competition had been more intense or requirements better defined initially.

What is the expected program effectiveness and impact on military readiness?

The program is expected to enhance the military's capability in search, detection, navigation, and guidance. This directly translates to improved situational awareness, better targeting, more efficient navigation, and overall enhanced operational effectiveness. For the Department of the Air Force, these systems are critical for intelligence, surveillance, reconnaissance (ISR) missions, air defense, and tactical operations. Improved systems can lead to reduced risk to personnel, increased mission success rates, and a stronger deterrent posture. The long-term nature of the contract suggests these capabilities are deemed essential for sustained readiness and modernization efforts within the Air Force.

How has federal spending in the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector evolved?

Federal spending in the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector (NAICS 334511) has historically been substantial, driven by national defense priorities and technological advancements. Spending fluctuates based on geopolitical events, modernization cycles of military platforms, and the introduction of new technologies like AI-enabled sensors or advanced navigation systems. While specific year-over-year trends require detailed budget analysis, this sector consistently represents a significant portion of the Department of Defense's procurement budget. Investments often increase during periods of heightened global tension or when new strategic capabilities are being developed. The trend is generally towards more sophisticated, integrated, and data-rich systems.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 497 ELECTRONICS PKWY BLDG 5, LIVERPOOL, NY, 13088

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

Financial Breakdown

Contract Ceiling: $98,913,854

Exercised Options: $98,913,854

Current Obligation: $98,913,854

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline