Air Force awards $11.2M contract to Lockheed Martin for aircraft situational awareness upgrade

Contract Overview

Contract Amount: $11,209,474 ($11.2M)

Contractor: Lockheed Martin Corp

Awarding Agency: Department of Defense

Start Date: 2023-09-26

End Date: 2026-06-30

Contract Duration: 1,008 days

Daily Burn Rate: $11.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SITUATIONAL AWARENESS COMMUNICATIONS UPGRADE (SACU)

Place of Performance

Location: MARIETTA, COBB County, GEORGIA, 30063

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $11.2 million to LOCKHEED MARTIN CORP for work described as: SITUATIONAL AWARENESS COMMUNICATIONS UPGRADE (SACU) Key points: 1. Contract focuses on enhancing aircraft situational awareness communications. 2. Sole-source award to a major defense contractor raises questions about competition. 3. Firm-fixed-price contract type aims to control costs. 4. Long performance period suggests a complex or phased implementation. 5. The contract falls under aircraft manufacturing, a critical defense sector. 6. No small business set-aside indicates potential missed opportunities for smaller firms.

Value Assessment

Rating: fair

The contract value of $11.2 million for an aircraft communications upgrade appears moderate for a sole-source award to a prime defense contractor like Lockheed Martin. Without specific details on the scope of the 'SITUATIONAL AWARENESS COMMUNICATIONS UPGRADE (SACU)' and comparable sole-source procurements for similar systems, a precise value-for-money assessment is challenging. The firm-fixed-price structure is a positive indicator for cost control, but the lack of competition limits the ability to benchmark pricing against market alternatives. Further analysis would require understanding the technological advancements and the criticality of the upgrade to justify the expenditure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of the Air Force did not conduct a competitive bidding process. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the requirement. The lack of competition means that price discovery through market forces was not utilized, potentially leading to higher costs than if multiple vendors had competed.

Taxpayer Impact: Taxpayers may not benefit from the most competitive pricing due to the absence of a bidding process. The government relies on the contractor's proposed pricing and internal cost analysis rather than market-driven negotiation.

Public Impact

The primary beneficiaries are the U.S. Air Force and its aircrews, who will receive enhanced situational awareness capabilities. The contract delivers upgrades to communication systems critical for aircraft operations and mission effectiveness. The geographic impact is likely focused on Air Force bases and operational theaters where these aircraft are deployed. This contract supports high-skilled jobs within the aerospace and defense manufacturing sector, primarily at Lockheed Martin facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of small business participation may exclude innovative solutions from smaller firms.
Long contract duration could introduce risks related to technological obsolescence or changing requirements.

Positive Signals

Firm-fixed-price contract type provides cost certainty for the government.
Award to a major defense contractor like Lockheed Martin suggests access to advanced technology and proven capabilities.
Upgrade to situational awareness communications is critical for mission success and aircrew safety.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and a concentration of major prime contractors. This contract for aircraft communication upgrades fits within the broader defense electronics and aircraft manufacturing sub-sectors. Spending in this area is driven by the need for technological superiority and maintaining operational readiness. Comparable spending benchmarks would typically involve other sole-source or competitively awarded contracts for avionics, communication systems, or electronic warfare upgrades on similar aircraft platforms.

Small Business Impact

This contract was not competed and did not include a small business set-aside, nor does it appear to involve significant subcontracting opportunities for small businesses based on the available data. The award to a large prime contractor like Lockheed Martin suggests that the primary work will be performed by the contractor or its large business partners. This represents a missed opportunity to leverage the innovation and agility of the small business sector within the defense industrial base.

Oversight & Accountability

Oversight for this contract will be managed by the Department of the Air Force contracting and program management offices. Accountability measures are embedded within the firm-fixed-price contract terms, requiring Lockheed Martin to deliver specified capabilities within the agreed-upon price. Transparency is facilitated through contract databases like FPDS, though detailed technical specifications and cost breakdowns are often considered proprietary. The Inspector General of the Department of Defense may conduct audits or investigations if specific concerns arise regarding performance or pricing.

Related Government Programs

Aircraft Modernization and Sustainment Programs
Avionics and Communication Systems Procurement
Defense Information Technology Contracts
Situational Awareness Technology Development

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Limited small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.2 million to LOCKHEED MARTIN CORP. SITUATIONAL AWARENESS COMMUNICATIONS UPGRADE (SACU)

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORP.

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 $11.2 million.

What is the period of performance?

Start: 2023-09-26. End: 2026-06-30.

What is the specific nature of the 'SITUATIONAL AWARENESS COMMUNICATIONS UPGRADE (SACU)' and what capabilities does it enhance?

The 'SITUATIONAL AWARENESS COMMUNICATIONS UPGRADE (SACU)' contract awarded to Lockheed Martin aims to enhance the communication systems that provide real-time information to aircrews regarding their operational environment. This likely includes upgrades to data links, secure communication radios, and potentially integration with advanced sensor networks. The goal is to improve the shared understanding of the battlespace, enabling better decision-making, deconfliction of friendly forces, and improved mission effectiveness. Specific enhancements could range from increased bandwidth and reduced latency in data transmission to improved encryption and interoperability with other platforms. The exact nature of the upgrade is proprietary but centers on ensuring pilots and command elements have the most accurate and timely information available.

How does the $11.2 million contract value compare to similar situational awareness communication upgrades for Air Force aircraft?

Benchmarking the $11.2 million contract value for this sole-source award is challenging without access to detailed cost breakdowns and specific technical requirements. However, major avionics and communication system upgrades for military aircraft can range from several million to tens or even hundreds of millions of dollars, depending on the platform, the scope of the upgrade, and whether it's a sole-source or competitive procurement. For a sole-source award to a prime contractor like Lockheed Martin, this value appears moderate, suggesting a focused upgrade rather than a complete system overhaul. If this were a competitive bid for a similar scope, the price might be expected to be lower. Further analysis would require comparing it to other sole-source awards for similar upgrades or competitive awards for comparable systems on different aircraft types.

What are the primary risks associated with a sole-source award for this type of defense system?

The primary risk associated with a sole-source award for defense systems like the SACU is the potential for inflated costs due to a lack of price competition. Without competing bids, the government has less leverage to negotiate the best possible price. Another risk is the potential for reduced innovation, as there is less incentive for the sole provider to explore novel or more cost-effective solutions compared to a competitive environment. Furthermore, sole-source contracts can sometimes lead to vendor lock-in, making it difficult and expensive to switch providers or integrate alternative technologies in the future. There's also a risk that the government may not be fully aware of all available market solutions or pricing benchmarks.

What is Lockheed Martin's track record with the Department of the Air Force for similar communication or avionics systems?

Lockheed Martin has an extensive and long-standing track record as a prime contractor for the Department of the Air Force, involved in numerous complex aircraft development, manufacturing, and sustainment programs. They are a major provider of integrated avionics, communication systems, electronic warfare suites, and mission systems across various Air Force platforms, including fighters, bombers, and transport aircraft. Their history includes delivering sophisticated technological solutions, often under sole-source or limited-competition arrangements due to the specialized nature of the technology and their established role in these programs. While this extensive experience suggests a high likelihood of successful delivery, it also underscores the pattern of sole-source awards for advanced systems within the defense sector.

How does the duration of the contract (ending June 2026) align with the typical lifecycle of aircraft communication technology?

The contract duration, extending to June 2026 (approximately 2 years and 9 months from the award date), aligns reasonably well with the implementation and initial operational phases of significant avionics and communication system upgrades. While the technology itself might have a longer potential lifespan, the contract period likely covers the design, development, integration, testing, and initial deployment phases. Aircraft communication technology is evolving rapidly, but core functionalities often remain relevant for several years. The end date suggests that the primary scope of work is expected to be completed within this timeframe, with potential for follow-on contracts for sustainment, further upgrades, or broader fleet-wide implementation if successful.

What are the potential implications of this contract for future spending on aircraft communication systems within the Air Force?

This contract could set a precedent for future spending on similar situational awareness communication upgrades, particularly if the technology proves effective and is deemed critical across a wider fleet. As a sole-source award, it may reinforce the reliance on Lockheed Martin for these types of systems, potentially leading to further sole-source procurements if the technology is proprietary or deeply integrated. Conversely, a successful implementation could also provide a benchmark for future competitive procurements, allowing the Air Force to solicit bids for comparable systems from a wider range of vendors, potentially driving down costs. The Air Force's decision-making process for this contract will likely influence how similar future needs are addressed.

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

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 86 SOUTH COBB DR, MARIETTA, GA, 30063

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: $11,209,474

Exercised Options: $11,209,474

Current Obligation: $11,209,474

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA862520D3000

IDV Type: IDC

Timeline