DoD awards $11.5M contract for Sniper Pods to Lockheed Martin, raising questions about competition

Contract Overview

Contract Amount: $11,495,876 ($11.5M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2007-01-19

End Date: 2008-10-31

Contract Duration: 651 days

Daily Burn Rate: $17.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SNIPER PODS IN SUPPORT OF FMS CUSTOMER REQUIREMENTS

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32819

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $11.5 million to LOCKHEED MARTIN CORPORATION for work described as: SNIPER PODS IN SUPPORT OF FMS CUSTOMER REQUIREMENTS Key points: 1. Contract awarded to a single, established defense contractor, suggesting limited competition. 2. Fixed-price contract type aims to control costs, but initial award value is significant. 3. Focus on Foreign Military Sales (FMS) indicates international customer requirements driving procurement. 4. The contract duration of over a year suggests a substantial operational need. 5. Geographic location of performance in Florida may have local economic implications.

Value Assessment

Rating: fair

The contract value of $11.5 million for Sniper Pods is a significant investment. Without specific benchmarks for this particular system or comparable FMS procurements, it is difficult to definitively assess value for money. The firm fixed-price nature of the contract is a positive indicator for cost control, assuming the initial pricing was competitive. However, the lack of competitive bidding means there's no direct market comparison to gauge if this price represents optimal value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a sole-source or not available for competition basis. This means that only one bidder, Lockheed Martin Corporation, was solicited or considered for this procurement. The lack of competition limits the government's ability to explore alternative solutions or leverage multiple vendors to drive down costs through a bidding process. This approach is typically used when a specific capability is only available from a single source or for urgent requirements.

Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the absence of a competitive bidding process, potentially leading to higher costs than if multiple vendors had vied for the contract.

Public Impact

Foreign military customers benefit from the acquisition of advanced targeting pod systems. The U.S. Air Force facilitates international defense cooperation through this FMS contract. The contract supports the operational readiness of allied air forces. Potential for indirect job creation or sustainment within Lockheed Martin's Florida operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher prices than a competitive award.
Sole-source awards can reduce the incentive for contractors to innovate or offer cost efficiencies.
Dependence on a single supplier can create supply chain risks.

Positive Signals

Firm fixed-price contract type helps to lock in costs.
Award to an established contractor with proven capabilities in this area.
Supports critical FMS requirements, enhancing international partnerships.

Sector Analysis

The defense sector, particularly aerospace and defense manufacturing, is characterized by high R&D costs and long product lifecycles. Sniper Pods fall under the category of advanced targeting and navigation systems, a critical component for modern air forces. The market for such systems is often dominated by a few large prime contractors like Lockheed Martin. Spending in this sub-sector is driven by technological advancements, modernization programs, and international sales.

Small Business Impact

This contract does not appear to involve small business set-asides, as it was awarded to a large prime contractor, Lockheed Martin Corporation. There is no information provided regarding subcontracting plans or opportunities for small businesses within this specific award. The focus on a sole-source procurement for a specialized system typically limits the direct involvement of small businesses unless they are part of the prime contractor's supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force and the Department of Defense's contracting and financial management structures. The firm fixed-price nature provides some cost control. Transparency is limited due to the sole-source nature of the award. Inspector General investigations could be initiated if performance issues or allegations of impropriety arise, but specific oversight mechanisms beyond standard contract management are not detailed.

Related Government Programs

Advanced Targeting Pods
Foreign Military Sales (FMS)
Air Force Weapon Systems Procurement
Lockheed Martin Defense Contracts

Risk Flags

Sole-source award limits price competition.
Lack of transparency in procurement process.
Potential for higher costs due to no competitive bidding.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.5 million to LOCKHEED MARTIN CORPORATION. SNIPER PODS IN SUPPORT OF FMS CUSTOMER REQUIREMENTS

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 $11.5 million.

What is the period of performance?

Start: 2007-01-19. End: 2008-10-31.

What is the track record of Lockheed Martin Corporation in delivering similar targeting pod systems to the U.S. military and FMS customers?

Lockheed Martin Corporation has a long and established track record in developing and producing advanced targeting pods for military applications. The Sniper Advanced Targeting Pod (ATP) itself is a well-known system, widely used by the U.S. Air Force, Navy, and numerous international partners. The company has consistently delivered these systems, often integrating them onto various aircraft platforms. Their experience includes not only manufacturing but also providing sustainment, upgrades, and training for these complex systems. This extensive history suggests a high degree of technical expertise and program management capability in this specific product line, making them a logical, albeit sole-source, provider.

How does the $11.5 million award value compare to previous procurements of Sniper Pods or similar systems, considering inflation and system upgrades?

Directly comparing the $11.5 million award value to previous procurements of Sniper Pods or similar systems is challenging without access to historical contract data, including quantities, specific configurations, and the exact dates of prior awards. Inflation alone would increase the cost of equivalent systems over time. Furthermore, if this contract includes newer variants, enhanced capabilities, or additional support services compared to older contracts, the price would naturally be higher. The firm fixed-price nature suggests a defined scope, but without detailed comparative data, assessing whether this $11.5 million represents a good or inflated price relative to historical spending is difficult. Benchmarking against other advanced targeting pod procurements, if available, would be necessary for a more robust comparison.

What are the primary risks associated with a sole-source procurement for critical defense equipment like Sniper Pods?

The primary risks associated with a sole-source procurement for critical defense equipment like Sniper Pods include a lack of price competition, which can lead to inflated costs for the government and taxpayers. Without multiple bidders, there is reduced incentive for the sole contractor to innovate, improve efficiency, or offer the most cost-effective solution. This can also lead to vendor lock-in, making it difficult and expensive to switch suppliers in the future. Furthermore, sole-source awards can sometimes mask underlying issues with market research or program planning, potentially indicating that competition was not adequately pursued. Dependence on a single supplier also increases supply chain vulnerability.

What is the expected program effectiveness and operational impact of these Sniper Pods for the FMS customer?

The Sniper Advanced Targeting Pod (ATP) is designed to provide high-resolution imagery and precision targeting capabilities, significantly enhancing the effectiveness of combat aircraft. For an FMS customer, the acquisition of these pods is expected to improve their ability to conduct intelligence, surveillance, and reconnaissance (ISR) missions, as well as execute precision strikes against a wide range of targets, day or night, in adverse weather conditions. This enhances their overall air power projection, operational readiness, and ability to contribute to coalition operations. The effectiveness is tied to the platform integration, pilot training, and the specific mission requirements of the FMS customer, but the technology itself is a proven force multiplier.

What has been the historical spending trend for Sniper Pods or similar targeting systems by the Department of Defense over the past 5-10 years?

Historical spending on Sniper Pods and similar advanced targeting systems by the Department of Defense (DoD) has been substantial over the past 5-10 years, reflecting ongoing modernization efforts and operational demands. While specific aggregate figures for Sniper Pods alone are not readily available in the public domain, the broader category of "Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing" (NAICS 334511) has seen significant government expenditure. Spending is influenced by deployment tempo, the need for upgrades to counter evolving threats, and the equipping of new aircraft platforms or international partners through FMS. Trends likely show consistent investment in advanced ISR and targeting capabilities, with periodic large procurements for new systems or upgrades.

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: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 5600 W SAND LAKE RD MP125, ORLANDO, FL, 90

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

Financial Breakdown

Contract Ceiling: $20,997,456

Exercised Options: $20,997,456

Current Obligation: $11,495,876

Contract Characteristics

Cost or Pricing Data: YES

Timeline