DoD awards $91.5M for sniper, LANTIRN, and IRST systems to Lockheed Martin, a sole-source contract

Contract Overview

Contract Amount: $91,522,413 ($91.5M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2024-10-01

End Date: 2028-12-31

Contract Duration: 1,552 days

Daily Burn Rate: $59.0K/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 $91.5 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 limited market exploration. 2. The duration of the contract (over 4 years) suggests a long-term need for these critical defense systems. 3. The absence of small business participation indicates a focus on large prime contractors for specialized defense equipment. 4. The firm-fixed-price structure aims to transfer some cost risk to the contractor, but oversight is still crucial. 5. The contract supports advanced targeting and situational awareness capabilities essential for military operations.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source award is challenging without competitive bids. The $91.5 million ceiling over approximately four years suggests a significant investment in specialized defense systems. Without comparative data from other potential suppliers or previous competitive procurements for similar systems, it's difficult to definitively assess if the pricing represents excellent value. However, the firm-fixed-price nature of the contract provides some cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Lockheed Martin Corporation, was solicited. This approach is typically used when a specific capability is only available from a single source or when there's a compelling justification for not seeking competition. The lack of competition means the government did not benefit from potential price reductions or innovative solutions that might have emerged from a broader bidding process.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without multiple bids, there's less assurance that the price reflects the lowest possible cost for these systems.

Public Impact

The primary beneficiaries are the U.S. Air Force and potentially allied nations through Foreign Military Sales, receiving advanced targeting and infrared detection systems. The contract ensures the continued production and availability of critical components for sniper pods, LANTIRN systems, and IRST capabilities. These systems enhance aircrew survivability and mission effectiveness by providing superior situational awareness and precision targeting. The contract supports specialized manufacturing jobs within Lockheed Martin's facilities, likely in Florida where the contract is managed.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially leads to higher costs for taxpayers.
Lack of competition may stifle innovation from other potential suppliers in the long run.
Dependence on a single contractor for critical defense systems poses a supply chain risk.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Award supports critical defense capabilities essential for national security.
Long-term contract ensures sustained availability of vital military equipment.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on advanced avionics and targeting systems. The market for such specialized military equipment is often dominated by a few large, established defense contractors due to high research and development costs, stringent security requirements, and long product lifecycles. Comparable spending benchmarks are difficult to establish publicly for sole-source, highly specialized defense systems like these.

Small Business Impact

This contract does not appear to include specific small business set-asides, nor is there an indication of significant subcontracting opportunities for small businesses based on the provided data. The nature of the specialized components and systems likely requires large-scale manufacturing capabilities typically held by prime contractors like Lockheed Martin. This suggests that the direct economic impact on the small business defense ecosystem may be limited for this particular award.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Air Force contracting and program management offices. Accountability measures are embedded in the contract's performance requirements and delivery schedules. Transparency is generally limited for sole-source defense contracts, though contract modifications and performance reports are typically maintained internally. 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 Weapon Systems
Advanced Targeting Pods
Infrared Search and Track Systems

Risk Flags

Sole-source award
Lack of competition
Potential for price inflation
Long-term contractor dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $91.5 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 $91.5 million.

What is the period of performance?

Start: 2024-10-01. End: 2028-12-31.

What is the historical spending trend for sniper, LANTIRN, and IRST systems by the Department of Defense?

Analyzing historical spending trends for these specific systems requires access to detailed procurement databases beyond the scope of this single award. However, the Department of Defense consistently invests billions annually in advanced avionics, targeting, and sensor systems. Contracts for components like sniper pods and LANTIRN have been ongoing for years, reflecting their critical role. The total spending on such systems fluctuates based on modernization programs, operational tempo, and geopolitical needs. Without specific historical data for these exact systems, it's difficult to provide precise figures, but it's reasonable to assume consistent, significant investment over the past decade, often through multi-year contracts with major defense manufacturers.

How does the pricing of this contract compare to similar systems procured competitively?

Direct comparison of pricing for this sole-source contract to competitively procured systems is challenging due to the lack of competitive bids for this specific award. Generally, sole-source contracts are expected to be priced higher than comparable systems acquired through full and open competition. To assess value, one would need to benchmark the unit costs or overall contract value against similar systems procured by the DoD or allied nations through competitive processes. Factors such as technological sophistication, performance capabilities, and lifecycle support costs would need to be considered. Without such comparative data, a definitive value assessment is speculative, but the absence of competition inherently raises concerns about potential price inflation.

What are the specific risks associated with relying on a single contractor for these critical defense systems?

Relying on a single contractor, Lockheed Martin in this case, for critical defense systems like sniper, LANTIRN, and IRST presents several risks. Firstly, there's a 'single point of failure' risk; any production issues, supply chain disruptions, or financial instability within Lockheed Martin could directly impact the availability of these essential systems for the military. Secondly, the lack of competition can lead to complacency and potentially higher prices over time, as the contractor faces less pressure to innovate or optimize costs. Thirdly, it creates a long-term dependency, making it difficult and costly to switch suppliers or develop alternative solutions should the need arise. This dependency requires robust government oversight to ensure continued performance and fair pricing.

What is Lockheed Martin's track record with similar sole-source defense contracts?

Lockheed Martin, as one of the largest defense contractors globally, has a long history of holding numerous sole-source contracts across various defense platforms and systems. Their track record with such contracts is extensive, often involving complex, high-value procurements where they possess unique technological capabilities or are the incumbent provider. While specific details of all sole-source agreements are not always public, these contracts are typically awarded based on justifications like proprietary technology, essential system integration, or urgent national security needs. Government oversight bodies, including the Government Accountability Office (GAO) and the Department of Defense's Inspector General, periodically review pricing and performance on these contracts. Lockheed Martin's overall performance on sole-source awards is generally characterized by its significant role in delivering major defense capabilities, though like any large contractor, specific contract reviews can highlight areas for improvement.

What is the expected impact of this contract on the operational readiness of the U.S. Air Force?

This contract is expected to have a positive impact on the operational readiness of the U.S. Air Force by ensuring the continued supply and support of critical targeting and situational awareness systems. Sniper pods, LANTIRN, and IRST systems are vital for aircrews to effectively identify targets, navigate, and operate in complex environments, enhancing both mission success and survivability. By securing a long-term supply through this IDIQ contract, the Air Force mitigates the risk of system obsolescence or unavailability, allowing for consistent training and deployment of aircraft equipped with these advanced capabilities. This sustained availability directly supports the force's ability to meet current and future operational demands.

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 COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: FA854019R0004

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: $91,522,413

Exercised Options: $91,522,413

Current Obligation: $91,522,413

Subaward Activity

Number of Subawards: 28

Total Subaward Amount: $4,193,339

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