DoD awards $441M to Lockheed Martin for IRST/ATP systems, raising competition concerns
Contract Overview
Contract Amount: $441,370,562 ($441.4M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2012-04-04
End Date: 2018-02-28
Contract Duration: 2,156 days
Daily Burn Rate: $204.7K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: PROCUREMENT OF INFRARED SEARCH AND TRACKING SYSTEM (IRST) AND SNIPER ADVANCED TARGETING PODS (ATP)
Place of Performance
Location: ORLANDO, ORANGE County, FLORIDA, 32819
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $441.4 million to LOCKHEED MARTIN CORPORATION for work described as: PROCUREMENT OF INFRARED SEARCH AND TRACKING SYSTEM (IRST) AND SNIPER ADVANCED TARGETING PODS (ATP) Key points: 1. Significant investment in advanced targeting systems for the Air Force. 2. Sole-source award to Lockheed Martin limits competitive pricing. 3. Long contract duration (2156 days) may impact adaptability. 4. Focus on critical defense capabilities highlights sector importance.
Value Assessment
Rating: questionable
The contract value of $441M for IRST and ATP systems is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar systems or potential alternatives.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not available for competition, indicating a sole-source award to Lockheed Martin. This lack of competition likely hindered price discovery and may have resulted in a higher overall cost to the government.
Taxpayer Impact: The sole-source nature of this procurement means taxpayers may have paid a premium due to the absence of competitive pressure to lower prices.
Public Impact
Enhances Air Force's combat effectiveness with advanced targeting technology. Supports critical defense infrastructure and national security objectives. Potential for long-term reliance on a single supplier for these systems. Procurement process raises questions about cost efficiency for taxpayers.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Long contract duration
Positive Signals
- Acquisition of advanced defense technology
- Supports critical military operations
Sector Analysis
This procurement falls within the Defense sector, specifically focusing on advanced aerospace and defense systems. Spending benchmarks in this area are highly variable, but large sole-source contracts for specialized equipment often warrant close scrutiny for cost-effectiveness.
Small Business Impact
The data indicates this was a large sole-source contract awarded to Lockheed Martin Corporation. There is no indication of small business participation in this specific award, which is common for major defense prime contractors.
Oversight & Accountability
The sole-source nature of this contract suggests limited opportunities for competitive oversight during the award phase. Ongoing oversight would be crucial to ensure performance and manage costs throughout the contract's duration.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award limits price competition.
- Potential for higher costs due to lack of competitive pressure.
- Long contract duration may lead to technology obsolescence.
- Risk of vendor lock-in for critical systems.
Tags
search-detection-navigation-guidance-aer, department-of-defense, fl, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $441.4 million to LOCKHEED MARTIN CORPORATION. PROCUREMENT OF INFRARED SEARCH AND TRACKING SYSTEM (IRST) AND SNIPER ADVANCED TARGETING PODS (ATP)
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 $441.4 million.
What is the period of performance?
Start: 2012-04-04. End: 2018-02-28.
What is the estimated cost savings that could have been achieved through a competitive bidding process for these IRST and ATP systems?
Quantifying exact savings from a hypothetical competitive process is challenging without market data. However, sole-source contracts typically result in higher prices compared to competitive ones. Industry benchmarks suggest potential savings could range from 10% to 30% or more, depending on the complexity and market availability of alternatives.
What are the primary risks associated with a sole-source procurement of critical defense systems like IRST and ATP?
The primary risks include inflated costs due to lack of competition, potential for vendor lock-in limiting future flexibility, reduced innovation as the sole provider faces less pressure to improve, and potential supply chain vulnerabilities if the sole provider experiences issues.
How does the long contract duration (2156 days) impact the effectiveness and adaptability of these advanced targeting systems?
A long duration can ensure consistent supply and support but also risks obsolescence if technology advances rapidly. It may also reduce the government's ability to adapt to new requirements or switch to superior technologies if they emerge during the contract period.
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: 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 # MP-265, ORLANDO, FL, 32819
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: $441,370,562
Exercised Options: $441,370,562
Current Obligation: $441,370,562
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $432,780
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2012-04-04
Current End Date: 2018-02-28
Potential End Date: 2019-12-30 00:00:00
Last Modified: 2021-08-18
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