DoD awards $168M+ for sniper, LANTIRN, and IRST systems to Lockheed Martin, a sole-source contract

Contract Overview

Contract Amount: $168,133,146 ($168.1M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2023-08-29

End Date: 2027-12-31

Contract Duration: 1,585 days

Daily Burn Rate: $106.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FOREIGN MILITARY SALES (FMS) AND DEPARTMENT OF DEFENSE (DOD) SNIPER, LANTIRN, AND INFRARED SEARCH AND TRACK (IRST) SYSTEMS PRODUCTION IDIQ

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32819

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $168.1 million to LOCKHEED MARTIN CORPORATION for work described as: FOREIGN MILITARY SALES (FMS) AND DEPARTMENT OF DEFENSE (DOD) SNIPER, LANTIRN, AND INFRARED SEARCH AND TRACK (IRST) SYSTEMS PRODUCTION IDIQ Key points: 1. This contract is a sole-source award, raising questions about potential price overruns and lack of competitive pressure. 2. The duration of the contract (over 4 years) suggests a long-term need for these critical defense systems. 3. The award is for production, indicating ongoing demand for these specialized military hardware components. 4. The specific systems (sniper, LANTIRN, IRST) are crucial for intelligence, surveillance, and reconnaissance (ISR) capabilities. 5. The contract's value, while substantial, needs to be benchmarked against similar sole-source awards for these types of systems. 6. The absence of small business participation is noted, with no set-aside or subcontracting requirements mentioned.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source contract is challenging without competitive data. However, the significant dollar amount suggests a substantial investment in critical defense capabilities. The firm fixed-price structure offers some cost certainty, but the lack of competition means the government cannot be assured of obtaining the best possible price. Further analysis would require comparing unit costs to historical data for similar systems or to publicly available pricing for comparable technologies, if such data exists.

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 government's ability to leverage market forces to drive down prices and potentially explore innovative solutions from other providers. It also raises concerns about whether the government is receiving optimal value for its investment.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. Without multiple offers, there is less pressure on the contractor to offer the lowest possible price, potentially leading to higher overall costs for these defense systems.

Public Impact

The primary beneficiaries are the U.S. Air Force and potentially allied nations through Foreign Military Sales (FMS), receiving advanced targeting and surveillance systems. The contract will ensure the continued production and availability of critical sniper pods, LANTIRN systems, and IRST systems, enhancing military operational effectiveness. The geographic impact is primarily within Florida, where Lockheed Martin's facilities are located, supporting local employment and the defense industrial base in that state. Workforce implications include the continued employment of skilled engineers, technicians, and manufacturing personnel at Lockheed Martin's facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially leads to higher costs for taxpayers.
Lack of transparency in pricing due to non-competitive nature.
Potential for vendor lock-in with critical defense systems.
No indication of small business participation or subcontracting opportunities.

Positive Signals

Ensures continued availability of critical ISR and targeting systems for national defense.
Firm fixed-price contract provides cost predictability for the government.
Award to a major defense contractor with established expertise in these systems.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on the manufacturing of advanced avionics and sensor systems. The market for such specialized defense equipment is characterized by high barriers to entry, significant R&D investment, and long procurement cycles. Comparable spending benchmarks would involve analyzing other sole-source or competitively awarded contracts for similar ISR and targeting pods, as well as integrated avionics systems, within the Department of Defense's overall procurement budget.

Small Business Impact

This contract does not appear to include any small business set-aside provisions, nor is there any indication of subcontracting goals for small businesses. The award to a large prime contractor like Lockheed Martin suggests that the primary focus is on direct production. This means that opportunities for small businesses to participate in this specific contract, either as prime contractors or subcontractors, are likely limited, potentially impacting the small business defense industrial base.

Oversight & Accountability

Oversight for this contract will primarily be conducted by the Department of the Air Force contracting and program management offices. Accountability measures are embedded within the firm fixed-price contract terms, requiring delivery of specified systems. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Foreign Military Sales (FMS)
Department of Defense Procurement
Air Force Avionics Systems
ISR Systems Procurement
Targeting Pods
LANTIRN Program

Risk Flags

Sole-source award
Lack of competition
Potential for price inflation
Limited transparency in pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $168.1 million to LOCKHEED MARTIN CORPORATION. FOREIGN MILITARY SALES (FMS) AND DEPARTMENT OF DEFENSE (DOD) SNIPER, LANTIRN, AND INFRARED SEARCH AND TRACK (IRST) SYSTEMS PRODUCTION IDIQ

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 $168.1 million.

What is the period of performance?

Start: 2023-08-29. End: 2027-12-31.

What is the historical spending pattern for sniper, LANTIRN, and IRST systems with Lockheed Martin?

Analyzing historical spending for these specific systems with Lockheed Martin requires access to detailed contract databases. However, given that these are critical and specialized defense components, it is likely that the Department of Defense has engaged in multiple contracts with Lockheed Martin for their production and sustainment over several years. Past awards would likely reflect similar firm fixed-price structures, with values fluctuating based on quantity, upgrades, and specific program needs. A comprehensive review would involve examining contract awards dating back to the initial fielding of these systems to understand the long-term investment and any trends in cost or volume.

How does the unit cost of these systems compare to similar systems procured competitively?

Directly comparing the unit cost of systems procured under a sole-source contract to those procured competitively is challenging without specific pricing data for both. Sole-source awards often carry a premium due to the lack of competitive pressure. If this contract were competed, it is plausible that multiple bidders would drive down prices. To assess value, one would need to benchmark the negotiated price against publicly available data for similar systems, if any, or against historical competitive bids for comparable technologies. The absence of such comparative data for this specific sole-source award makes a definitive value assessment difficult.

What are the specific performance metrics and delivery schedules outlined in this contract?

This contract is a Firm Fixed Price (FFP) Indefinite Delivery/Indefinite Quantity (IDIQ) contract with a specified period of performance from August 29, 2023, to December 31, 2027, totaling 1585 days. While the overall contract value is $168,133,146.04, the specific performance metrics and delivery schedules for individual delivery orders (awarded as 'DELIVERY ORDER') would be detailed within each order. These orders would specify the exact quantities of sniper, LANTIRN, and IRST systems required, along with their respective delivery timelines and technical specifications to meet operational needs.

What is Lockheed Martin's track record with the Department of Defense for similar systems?

Lockheed Martin Corporation is a major defense contractor with an extensive track record of supplying advanced aerospace and defense systems to the Department of Defense. They are a primary producer of various targeting pods, including the Sniper Advanced Targeting Pod, and have been involved in the development and production of integrated avionics and sensor systems for decades. Their history with the DoD includes numerous large-scale contracts for complex weapon systems, aircraft components, and advanced electronics, demonstrating a long-standing capability and established relationship in delivering critical military hardware.

What are the potential risks associated with a sole-source award for these critical defense systems?

The primary risks associated with a sole-source award for critical defense systems like sniper, LANTIRN, and IRST include potential cost overruns due to a lack of competitive pricing pressure, reduced incentive for innovation from the sole provider, and the risk of vendor lock-in. If the government becomes overly reliant on a single supplier for essential components, it can limit future flexibility and bargaining power. Furthermore, without competition, there is a diminished ability to independently verify that the price paid represents fair market value, potentially leading to inefficient use of taxpayer funds.

Are there any planned upgrades or future technology insertions for these systems under this contract?

The provided data does not explicitly detail planned upgrades or future technology insertions for the sniper, LANTIRN, and IRST systems under this specific IDIQ contract. However, given the nature of defense technology, it is common for such contracts to include provisions for engineering change proposals (ECPs) or to be structured in a way that allows for the incorporation of upgrades through subsequent delivery orders or modifications. The long-term performance period suggests a potential for evolving requirements, and Lockheed Martin, as the incumbent, would likely be involved in discussions regarding future enhancements to maintain system relevance and effectiveness.

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: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

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: $168,133,146

Exercised Options: $168,133,146

Current Obligation: $168,133,146

Subaward Activity

Number of Subawards: 19

Total Subaward Amount: $7,385,625

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA854020D0001

IDV Type: IDC

Timeline