Lockheed Martin awarded $57.6M contract for advanced radio hardware and software upgrades for Air Force aircraft

Contract Overview

Contract Amount: $57,567,184 ($57.6M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2023-06-30

End Date: 2028-12-29

Contract Duration: 2,009 days

Daily Burn Rate: $28.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FMS CASE# RO-D-QAN OPERATIONAL FLIGHT PROGRAM (OFP) M6.6. HARDWARE UPGRADE WITH AIFF MODE 5, MIDS-JTRS, SOFTWARE INTEGRATION/PROVISIONING FOR ARC-210 AND ARC-238 SATURN CAPABLE RADIOS.

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76108

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $57.6 million to LOCKHEED MARTIN CORPORATION for work described as: FMS CASE# RO-D-QAN OPERATIONAL FLIGHT PROGRAM (OFP) M6.6. HARDWARE UPGRADE WITH AIFF MODE 5, MIDS-JTRS, SOFTWARE INTEGRATION/PROVISIONING FOR ARC-210 AND ARC-238 SATURN CAPABLE RADIOS. Key points: 1. Contract focuses on critical communication system upgrades, enhancing aircraft survivability and interoperability. 2. Significant investment in modernizing aging communication hardware with AIFF Mode 5 and MIDS-JTRS capabilities. 3. Sole-source award raises questions about potential price efficiencies and market alternatives. 4. Long-term contract duration (over 5 years) suggests a sustained need for these upgrades. 5. Geographic focus on Texas indicates a specific operational base or maintenance hub. 6. Contract type is firm fixed price, shifting cost risk to the contractor.

Value Assessment

Rating: fair

The contract value of $57.6 million for hardware and software integration for aircraft radios appears substantial. Benchmarking this against similar upgrades is challenging without more specific details on the scope of work and the technology involved. However, given the sole-source nature, it is difficult to assess if this represents optimal value for money compared to a competitive procurement. The firm fixed price structure provides some cost certainty, but the initial price point warrants scrutiny.

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 among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, technology, or security clearances. The lack of competition limits the opportunity for price discovery and potentially higher costs for the government. It is crucial to understand the justification for this sole-source award to ensure it was indeed necessary.

Taxpayer Impact: The absence of competition means taxpayers may not benefit from the cost savings typically achieved through a bidding process. This could result in a higher overall expenditure for this essential upgrade.

Public Impact

The primary beneficiaries are the U.S. Air Force and its aircrews, who will receive enhanced communication capabilities. Services delivered include hardware upgrades, software integration, and provisioning for advanced radio systems. The contract has a geographic impact primarily in Texas, likely related to aircraft maintenance or operational bases. Workforce implications may include specialized technical roles for installation, integration, and testing of the new systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Lack of detailed technical specifications in the provided data makes independent value assessment difficult.
Long contract duration could lead to cost overruns if not managed effectively.

Positive Signals

Firm fixed price contract shifts cost risk to the contractor.
Upgrades enhance critical communication systems, improving operational effectiveness and safety.
Contractor is a major defense supplier with established experience in aerospace systems.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on avionics and communication systems for military aircraft. The market for such specialized upgrades is often dominated by a few large prime contractors due to the high barriers to entry, including technological expertise, security clearances, and existing relationships with government agencies. Spending in this area is driven by the need to maintain technological superiority and ensure interoperability of aging fleets with modern threats and systems.

Small Business Impact

The provided data indicates that small business participation is not a stated requirement for this contract (ss: false, sb: false). As a large, sole-source award to a major prime contractor, it is unlikely to include specific small business set-asides. However, Lockheed Martin may engage small businesses as subcontractors for specific components or services, though this is not detailed here. The impact on the broader small business ecosystem is likely minimal unless significant subcontracting opportunities arise.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force and the Department of Defense's contracting and program management offices. Accountability measures are inherent in the firm fixed price contract type, which obligates the contractor to deliver specified goods and services within the agreed price. Transparency is limited by the sole-source nature and the proprietary details of the technology. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Airborne Communication Systems
Avionics Modernization Programs
Defense Communications Infrastructure
Aircraft Electronic Warfare Systems
Military Radio Technology Upgrades

Risk Flags

Sole-source award requires strong justification.
Potential for cost overruns due to long contract duration.
Risk of technological obsolescence over the contract period.
Limited transparency due to lack of competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $57.6 million to LOCKHEED MARTIN CORPORATION. FMS CASE# RO-D-QAN OPERATIONAL FLIGHT PROGRAM (OFP) M6.6. HARDWARE UPGRADE WITH AIFF MODE 5, MIDS-JTRS, SOFTWARE INTEGRATION/PROVISIONING FOR ARC-210 AND ARC-238 SATURN CAPABLE RADIOS.

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 $57.6 million.

What is the period of performance?

Start: 2023-06-30. End: 2028-12-29.

What is the specific justification for awarding this contract on a sole-source basis to Lockheed Martin?

The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the need for compatibility with existing systems that only one contractor can provide. For this contract, involving specific hardware (AIFF Mode 5, MIDS-JTRS) and software integration for ARC-210 and ARC-238 radios, Lockheed Martin likely possesses the exclusive rights, technical expertise, or necessary certifications. Without this specific justification document (often a Justification and Approval or J&A), it's presumed that competitive alternatives were deemed unavailable or impractical, potentially due to specialized integration requirements or existing platform dependencies.

How does the pricing of this contract compare to similar communication system upgrades in the defense sector?

Direct price comparison is challenging without detailed breakdowns of hardware, software, and labor costs, and specific performance metrics. However, the $57.6 million total contract value over approximately 5.5 years suggests an average annual spend of roughly $10.5 million. This figure needs to be contextualized by the complexity of the upgrade (AIFF Mode 5, MIDS-JTRS integration) and the specific aircraft platforms involved. In the defense sector, complex avionics upgrades can range from tens to hundreds of millions of dollars depending on scope. The sole-source nature means this price cannot be directly benchmarked against competitive bids, making it essential to rely on internal government cost analyses or historical data for similar, albeit potentially less complex, sole-source procurements.

What are the key performance indicators (KPIs) or metrics used to measure the success of this contract?

While specific KPIs are not detailed in the provided data, typical performance metrics for such a contract would likely include: successful integration and testing of the AIFF Mode 5 and MIDS-JTRS capabilities, meeting specified communication range and clarity standards, system reliability and uptime, adherence to delivery schedules for hardware and software, and successful cybersecurity validation. The firm fixed price nature implies that meeting these technical and schedule requirements within the agreed budget is paramount. Performance would be monitored through regular progress reports, technical reviews, and operational testing by the Air Force.

What is the historical spending pattern for similar radio upgrades within the Department of the Air Force?

Historical spending on radio upgrades within the Air Force varies significantly based on the technology generation, platform, and scope. Older analog radio replacements or basic digital upgrades might have cost significantly less, potentially in the single-digit millions per contract. However, integrating advanced capabilities like AIFF Mode 5 (Air Traffic Control) and MIDS-JTRS (a secure, jam-resistant communication system) represents a higher technological tier. Contracts for such advanced systems, especially involving software integration and multiple platforms, can easily reach tens of millions of dollars. Without specific contract numbers or program names, a precise historical comparison is difficult, but this $57.6M contract appears to be within the expected range for a comprehensive, modern communication suite upgrade.

What are the potential risks associated with the long duration (over 5 years) of this contract?

The extended duration of over five years presents several potential risks. Firstly, technological obsolescence: communication technology evolves rapidly, and by the end of the contract, the upgraded systems might be nearing the end of their effective lifecycle or require further updates. Secondly, cost escalation: although it's a firm fixed price contract, unforeseen issues during integration or sustainment could lead to change orders or claims, increasing the overall cost. Thirdly, contractor performance degradation: maintaining consistent high performance over such a long period can be challenging. Finally, shifts in strategic priorities or budget constraints within the Air Force could impact the program's continuation or funding, although the long-term nature suggests a stable requirement.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

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

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: FA823222R3001

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 1 LOCKHEED BLVD, FORT WORTH, TX, 76108

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: $57,567,184

Exercised Options: $57,567,184

Current Obligation: $57,567,184

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline