DoD's $116.7M ASARS-2C Contract Awarded to Lockheed Martin Raises Competition Concerns
Contract Overview
Contract Amount: $116,701,860 ($116.7M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2020-07-14
End Date: 2025-10-31
Contract Duration: 1,935 days
Daily Burn Rate: $60.3K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: ASARS-2C (ADVANCED SYNTHETIC APERTURE RADAR SYSTEM)
Place of Performance
Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93599
Plain-Language Summary
Department of Defense obligated $116.7 million to LOCKHEED MARTIN CORPORATION for work described as: ASARS-2C (ADVANCED SYNTHETIC APERTURE RADAR SYSTEM) Key points: 1. The contract for ASARS-2C (ADVANCED SYNTHETIC APERTURE RADAR SYSTEM) totals $116,701,860. 2. Lockheed Martin Corporation is the sole awardee, indicating a lack of competition. 3. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns. 4. The sector is Aircraft Manufacturing, with a Product Service Code of 336411.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee contract type, combined with a lack of competition, raises concerns about potential cost inefficiencies and whether the government is receiving the best value. Benchmarking against similar advanced radar system contracts would be beneficial.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, meaning only one source, Lockheed Martin Corporation, was considered. This limits price discovery and potentially leads to higher costs for the government compared to a competitive process.
Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for the ASARS-2C system.
Public Impact
Advanced radar systems are critical for national defense, impacting intelligence gathering and surveillance capabilities. The significant investment in this technology underscores its importance to the Department of Defense's mission. The sole-source nature of the award warrants scrutiny to ensure taxpayer funds are used efficiently.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost Plus Fixed Fee contract type
- Potential for cost overruns
Positive Signals
- Critical defense technology
- Long-term contract duration
Sector Analysis
The Aircraft Manufacturing sector, particularly for advanced defense systems like radar, often involves complex technologies and specialized expertise. Spending benchmarks for similar systems are difficult to establish due to the unique nature of such equipment, but competitive bidding is generally expected to yield better pricing.
Small Business Impact
There is no indication that small businesses were involved in this contract award. The sole-source nature of the procurement likely precluded any opportunity for small business participation.
Oversight & Accountability
The Department of the Air Force awarded this contract. Oversight will be crucial to monitor costs and performance under the Cost Plus Fixed Fee structure, especially given the absence of competitive pressure.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competitive bidding
- Cost Plus Fixed Fee contract type
- Potential for cost escalation
- Limited transparency in pricing
- No small business participation
Tags
aircraft-manufacturing, department-of-defense, ca, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $116.7 million to LOCKHEED MARTIN CORPORATION. ASARS-2C (ADVANCED SYNTHETIC APERTURE RADAR SYSTEM)
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 $116.7 million.
What is the period of performance?
Start: 2020-07-14. End: 2025-10-31.
What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or a lack of viable alternative sources. The Department of Defense should have conducted a thorough market research analysis to confirm the absence of competition and performed a detailed price analysis to ensure the negotiated price was fair and reasonable, considering factors like labor, materials, and profit margins.
What are the potential risks associated with a Cost Plus Fixed Fee contract for advanced radar systems, and how are they being mitigated?
Cost Plus Fixed Fee contracts carry the risk of cost overruns as the contractor is reimbursed for allowable costs plus a fixed fee. Mitigation strategies include robust government oversight of contractor expenditures, detailed review of cost proposals, clear definition of contract scope, and performance incentives. For advanced systems, ensuring the fixed fee adequately incentivizes efficiency while covering contractor risk is paramount.
How does the ASARS-2C system contribute to the Department of Defense's overall mission effectiveness, and what is the expected return on investment?
The ASARS-2C system provides advanced synthetic aperture radar capabilities, crucial for intelligence, surveillance, and reconnaissance (ISR) missions. Its contribution to mission effectiveness lies in providing high-resolution imagery for target identification, battlefield assessment, and situational awareness. The return on investment is measured not just in financial terms but in enhanced operational capabilities and improved decision-making, ultimately supporting national security objectives.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: FA852820R0010
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp
Address: 1011 LOCKHEED WAY, PALMDALE, CA, 93599
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: $119,701,860
Exercised Options: $119,701,860
Current Obligation: $116,701,860
Actual Outlays: $1,341,112
Subaward Activity
Number of Subawards: 24
Total Subaward Amount: $97,893,014
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA852819D0015
IDV Type: IDC
Timeline
Start Date: 2020-07-14
Current End Date: 2025-10-31
Potential End Date: 2025-10-31 00:00:00
Last Modified: 2025-07-14
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