Lockheed Martin awarded $47.4M for R&D in physical sciences, with a 2,857-day performance period

Contract Overview

Contract Amount: $47,375,287 ($47.4M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2010-06-04

End Date: 2018-03-31

Contract Duration: 2,857 days

Daily Burn Rate: $16.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: ARGUS IR

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32819

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $47.4 million to LOCKHEED MARTIN CORPORATION for work described as: ARGUS IR Key points: 1. Contract value represents a significant investment in advanced research and development. 2. The lengthy performance period suggests a complex, multi-phase research project. 3. Full and open competition indicates a broad market search for the best solution. 4. The cost-plus-fixed-fee structure allows for flexibility in research but requires careful cost monitoring. 5. Research and Development in Physical Sciences is a critical area for technological advancement. 6. The contract was awarded by the Department of Defense, highlighting its strategic importance.

Value Assessment

Rating: fair

Benchmarking the value of this research and development contract is challenging due to its specialized nature and long duration. The total award of $47.4 million over nearly 8 years averages to approximately $16.58 million per year. Without specific deliverables or comparable R&D projects, assessing value for money is difficult. The cost-plus-fixed-fee (CPFF) pricing structure means the government pays the contractor's allowable costs plus a fixed fee, which can lead to cost overruns if not managed tightly. However, CPFF is common for R&D where the scope may evolve.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that the Department of Defense sought proposals from all responsible sources. The presence of three bidders indicates a competitive environment, though the specific details of the bidding process and the relative strengths of the proposals are not provided. A higher number of bidders generally leads to better price discovery and potentially lower costs for the government.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best value by allowing a wide range of contractors to compete, potentially driving down prices through market forces.

Public Impact

The primary beneficiaries are likely the Department of Defense and potentially other government agencies requiring advancements in physical sciences. The services delivered are research and development activities aimed at pushing the boundaries of scientific knowledge and technological application. The geographic impact is primarily within Florida, where the contractor is located, but the technological advancements could have national or global implications. Workforce implications include employment for scientists, engineers, and support staff involved in the research.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost overruns are a risk with Cost Plus Fixed Fee contracts if not rigorously monitored.
The long duration of the contract could lead to scope creep or evolving research needs not fully anticipated at the outset.
Measuring the tangible return on investment for pure R&D can be challenging.

Positive Signals

Full and open competition suggests a robust process to identify the best technical solution.
The contract award to a major defense contractor like Lockheed Martin indicates confidence in their research capabilities.
The significant funding allocated signals a commitment to advancing critical scientific and technological areas.

Sector Analysis

The contract falls within the Research and Development in the Physical, Engineering, and Life Sciences sector, excluding biotechnology. This sector is characterized by innovation, long development cycles, and significant government investment, particularly from defense agencies. The market size for defense R&D is substantial, with agencies constantly seeking technological superiority. This contract likely contributes to the development of next-generation technologies relevant to national security.

Small Business Impact

There is no indication that this contract involved small business set-asides. As a large definitive contract awarded to Lockheed Martin, it is unlikely to have direct subcontracting opportunities specifically targeted at small businesses unless mandated by the prime contractor or agency policy. The focus appears to be on securing specialized R&D capabilities from a large, established entity.

Oversight & Accountability

Oversight for this contract would typically be managed by the awarding agency (Department of Defense) through its contract administration offices, such as the Defense Contract Management Agency. Accountability measures would be tied to the achievement of research milestones and adherence to the contract's terms, including cost controls. Transparency is generally limited for specific R&D projects due to proprietary and national security considerations, though contract award data is publicly available.

Related Government Programs

Department of Defense Research and Development Programs
Advanced Technology Development Contracts
Physical Sciences Research Initiatives
Lockheed Martin Corporation Contracts

Risk Flags

Long contract duration may increase risk of cost escalation or scope creep.
CPFF contracts require diligent oversight to ensure cost efficiency.
R&D outcomes are inherently uncertain; success is not guaranteed.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $47.4 million to LOCKHEED MARTIN CORPORATION. ARGUS IR

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $47.4 million.

What is the period of performance?

Start: 2010-06-04. End: 2018-03-31.

What specific research areas within physical sciences does this contract cover?

The provided data indicates the contract falls under NAICS code 541712, 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology).' However, the specific sub-disciplines or research objectives within 'physical sciences' are not detailed in the summary data. Typically, this could encompass areas such as materials science, physics, chemistry, aerospace engineering, or related fields crucial for defense applications. Further investigation into the contract's statement of work or associated documentation would be required to ascertain the precise research focus.

How does the $47.4 million award compare to typical R&D spending in this sector by the DoD?

Comparing this $47.4 million award to overall DoD R&D spending requires context. The DoD's annual R&D budget is in the tens of billions of dollars. A single contract of this size, while substantial, represents a fraction of the total investment. Its significance lies in its duration (nearly 8 years) and its specific focus. To assess its relative scale, one would need to compare it to other large, multi-year R&D contracts within the physical sciences domain awarded by the DoD or other agencies. Without more comparable data points, it's difficult to definitively label it as 'large' or 'small' in absolute terms, but its long-term nature suggests a significant, focused effort.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D?

The primary risks with CPFF contracts, especially in R&D, revolve around cost control and scope definition. For the government, the risk is that the contractor may not be sufficiently incentivized to control costs, as allowable expenses are reimbursed. If the fixed fee is set too low relative to the anticipated effort, the contractor might cut corners. Conversely, if the scope is not well-defined, the contractor could incur significant costs beyond the initial estimates, potentially leading to requests for upward contract modifications. For the contractor, the risk lies in accurately estimating the costs and effort required to achieve the R&D objectives to ensure the fixed fee is adequate compensation.

What is the significance of Lockheed Martin Corporation being the awardee?

Lockheed Martin Corporation is one of the largest defense contractors globally, with extensive experience and established infrastructure in research, development, and manufacturing across various defense and aerospace sectors. Awarding this contract to them suggests the Department of Defense recognized their specialized expertise, technological capabilities, and proven track record in handling complex, long-term R&D projects. Their size and resources likely enable them to undertake ambitious research endeavors that smaller firms might not be equipped for. This choice also implies a level of trust in their ability to deliver on critical national security-related research objectives.

What are the potential long-term implications of this R&D investment?

The long-term implications of this R&D investment are potentially significant, aiming to yield advancements that could enhance national security, provide technological advantages over adversaries, or lead to innovations with dual-use applications. Successful research could result in new materials, improved systems, or novel methodologies that bolster defense capabilities. Conversely, R&D is inherently uncertain; the investment may not yield the desired breakthroughs, or the resulting technologies might become obsolete before they can be fully deployed. The ultimate impact depends on the success of the research and the subsequent transition of findings into practical applications.

How does the 'full and open competition' process benefit taxpayer value in this context?

Full and open competition, in theory, benefits taxpayers by maximizing the pool of potential offerors, thereby increasing the likelihood of receiving the most innovative solutions and competitive pricing. For a specialized R&D contract, it ensures that the government explores a wide range of technical approaches and capabilities available in the market. While the number of bidders (3) is moderate, the process itself aims to prevent monopolies and encourage efficiency. The ultimate value realization depends on the rigorous evaluation of proposals and effective contract management to ensure the research objectives are met within the awarded budget.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

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, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $49,983,925

Exercised Options: $49,983,925

Current Obligation: $47,375,287

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline