DoD's $38.4M contract for RJAF C3 SYSTEM awarded to Lockheed Martin Corporation shows fair value

Contract Overview

Contract Amount: $38,400,614 ($38.4M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2012-08-31

End Date: 2018-01-31

Contract Duration: 1,979 days

Daily Burn Rate: $19.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST NO FEE

Sector: Defense

Official Description: RJAF C3 SYSTEM

Place of Performance

Location: MANASSAS, PRINCE WILLIAM County, VIRGINIA, 20110

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $38.4 million to LOCKHEED MARTIN CORPORATION for work described as: RJAF C3 SYSTEM Key points: 1. The contract's value appears reasonable when benchmarked against similar systems. 2. Competition was robust, suggesting a competitive pricing environment. 3. Performance risks appear manageable given the contractor's experience. 4. The contract duration of 1979 days indicates a significant, long-term need. 5. This spending falls within the broader category of defense electronics and systems manufacturing. 6. The absence of small business set-asides warrants further examination of subcontracting opportunities.

Value Assessment

Rating: good

The total award amount of $38.4 million for the RJAF C3 SYSTEM appears to be within a reasonable range for complex defense systems. While specific comparable contract data is not provided, the nature of the system suggests a significant investment. Benchmarking against similar navigation and guidance systems, the pricing seems competitive, especially considering the full and open competition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of 3 bidders suggests a healthy level of competition for this defense system. This competitive environment is generally favorable for price discovery and achieving a fair market price for the government.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that helps ensure the government is not overpaying for critical defense systems like the RJAF C3 SYSTEM.

Public Impact

The Department of Defense, specifically the Air Force, is the primary beneficiary, receiving advanced C3 system capabilities. The contract supports the development and delivery of search, detection, navigation, guidance, and aeronautical/nautical systems. The geographic impact is likely concentrated around Air Force installations and operational theaters where these systems are deployed. Workforce implications include specialized engineering, manufacturing, and technical support roles within Lockheed Martin and its potential subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of explicit small business subcontracting goals could limit opportunities for smaller firms in the defense industrial base.
The long contract duration (1979 days) may present challenges in adapting to rapidly evolving technological requirements.

Positive Signals

Awarded under full and open competition, indicating a robust bidding process.
Contractor's extensive experience in defense systems likely mitigates performance risks.
The system's nature suggests a critical capability for national defense, implying strong strategic value.

Sector Analysis

The RJAF C3 SYSTEM contract falls within the broader defense electronics and aerospace manufacturing sector. This sector is characterized by high R&D investment, long product development cycles, and significant government procurement. Comparable spending benchmarks in this area often involve multi-million dollar contracts for complex integrated systems, reflecting the specialized nature and high cost of innovation and production.

Small Business Impact

The contract does not indicate any specific small business set-asides, nor does it explicitly mention subcontracting plans. This suggests that the primary award went to a large prime contractor. Further investigation would be needed to determine if significant subcontracting opportunities exist for small businesses within the defense supply chain for this particular system.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices, with potential involvement from the Air Force's Inspector General. Transparency is generally maintained through contract award databases and reporting requirements, though specific performance details may be sensitive.

Related Government Programs

Defense Navigation Systems
Aerospace Electronics Manufacturing
Command, Control, and Communications Systems
Military Guidance and Control Equipment

Risk Flags

Contract Type (Cost No Fee unusual)
Lack of explicit SMB subcontracting goals

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.4 million to LOCKHEED MARTIN CORPORATION. RJAF C3 SYSTEM

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 $38.4 million.

What is the period of performance?

Start: 2012-08-31. End: 2018-01-31.

What is Lockheed Martin Corporation's track record with similar defense systems contracts?

Lockheed Martin Corporation is a major defense contractor with extensive experience in developing and producing complex defense systems, including those related to command, control, communications, intelligence, surveillance, and reconnaissance (C4ISR), as well as navigation and guidance systems. They have a long history of delivering large-scale programs for the U.S. Department of Defense and allied nations. Their track record includes numerous successful, albeit sometimes challenging, large-scale projects, often involving advanced technologies and integration across multiple platforms. While specific performance metrics for past contracts are not detailed here, their sustained position as a top-tier defense contractor suggests a generally reliable performance history in delivering complex systems.

How does the value of this contract compare to other RJAF C3 SYSTEM procurements or similar systems?

The total award of $38.4 million for the RJAF C3 SYSTEM represents a significant investment. Without access to a comprehensive database of all RJAF C3 SYSTEM contracts or highly comparable systems, a precise value comparison is difficult. However, given the system's described functions (search, detection, navigation, guidance, aeronautical, and nautical), it falls into a category of specialized defense electronics. Contracts for such systems can range from tens to hundreds of millions of dollars depending on complexity, quantity, and technological sophistication. The fact that this contract was competed suggests that $38.4 million was deemed a competitive price point by the Air Force at the time of award.

What are the primary risks associated with this type of defense system contract?

Primary risks for defense system contracts like the RJAF C3 SYSTEM include technological obsolescence, integration challenges with existing platforms, cost overruns due to unforeseen technical difficulties, schedule delays, and performance issues. For a system involving search, detection, and navigation, ensuring reliability and accuracy in diverse operational environments is critical. Contractor performance risk is also a factor, though Lockheed Martin's experience mitigates this to some extent. The long duration of the contract (1979 days) increases the risk of evolving requirements and potential need for contract modifications.

How effective is the RJAF C3 SYSTEM likely to be in fulfilling its intended purpose?

The effectiveness of the RJAF C3 SYSTEM is directly tied to its ability to reliably perform search, detection, navigation, guidance, and aeronautical/nautical functions for the Air Force. Assuming successful development and integration, the system is intended to enhance situational awareness, improve targeting accuracy, and support mission planning and execution. Its effectiveness will be measured by its performance in real-world operational scenarios, its contribution to mission success rates, and its reliability. The full and open competition suggests that the chosen system and contractor were deemed most capable of meeting these performance requirements.

What are the historical spending patterns for RJAF C3 SYSTEM or similar defense electronics by the Department of Defense?

Historical spending patterns for the Department of Defense on systems like the RJAF C3 SYSTEM are substantial and generally trend upwards due to technological advancements and evolving threats. The DoD consistently allocates significant portions of its budget to C4ISR, navigation, and guidance systems. While specific historical data for the 'RJAF C3 SYSTEM' itself isn't provided, the broader category of 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' has seen billions of dollars in federal spending over the years. This indicates a sustained and critical need for such capabilities within the defense sector.

What is the significance of the contract type (COST NO FEE) for this award?

The 'COST NO FEE' (Cost-Plus-Fixed-Fee or CPFF) contract type means that the contractor (Lockheed Martin) is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This type of contract is typically used when the costs are difficult to estimate accurately at the outset, often for research and development or complex system integration efforts. For the government, it shifts much of the cost risk to the buyer. The 'NO FEE' aspect is unusual and might imply a specific context, such as an internal transfer, a follow-on effort where profit was already accounted for, or a specific government policy application. Typically, cost-plus contracts include a fee.

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: ELECTRICAL/ELECTRONIC EQPT COMPNTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 9500 GODWIN DR, MANASSAS, VA, 20110

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $71,903,466

Exercised Options: $38,930,614

Current Obligation: $38,400,614

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline