DoD awards $158M for radio and TV communication equipment, with Lockheed Martin as sole contractor

Contract Overview

Contract Amount: $90,995,720 ($91.0M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2005-10-07

End Date: 2011-04-30

Contract Duration: 2,031 days

Daily Burn Rate: $44.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200605!000063!5700!FA8706!OC2SG/PK !FA872005C0002 !A!N! !N! ! !20051007!20081112!158140041!158140041!834951691!N!LOCKHEED MARTIN CORPORATION !497 ELECTRONICS PKWY # 5 #!LIVERPOOL !NY!13088!73000!067!36!SYRACUSE !ONONDAGA !NEW YORK !+000089000000!Y!N!000089000000!5820!RADIO & TV COMM EQUIPMENT, EXCEPT AIRBORNE !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !NOT DISCERNABLE !334511!E! !3! ! ! ! ! !99990909!B! ! !N!Z!D!Y!J!1!001!N!6A!Z!N!A! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!Y! ! ! !Y! ! !0001! !

Place of Performance

Location: LIVERPOOL, ONONDAGA County, NEW YORK, 13088

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $91.0 million to LOCKHEED MARTIN CORPORATION for work described as: 200605!000063!5700!FA8706!OC2SG/PK !FA872005C0002 !A!N! !N! ! !20051007!20081112!158140041!158140041!834951691!N!LOCKHEED MARTIN CORPORATION !497 ELECTRONICS PKWY # 5 #!LIVERPOOL !NY!13088!73000!067!36!SYRACUSE !ONON… Key points: 1. Contract awarded to a single, large business prime contractor. 2. Significant contract value for specialized electronic equipment. 3. Limited competition raises questions about price discovery and value. 4. Contract duration extends over six years, indicating a long-term need. 5. The award falls under the 'Electronics and Communication Equipment' category. 6. No small business set-aside was utilized for this procurement.

Value Assessment

Rating: questionable

The contract value of $158.14 million for radio and TV communication equipment is substantial. However, without a competitive bidding process, it is difficult to benchmark the value for money. The sole-source nature of the award means that taxpayers may not have benefited from the cost savings typically achieved through competition. Further analysis would be needed to compare pricing to similar, competitively awarded contracts for comparable equipment.

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. The absence of competition limits the government's ability to explore alternative solutions or negotiate the best possible price. This approach is typically justified when only one source can meet the requirement, but it bypasses the standard competitive processes designed to ensure fair pricing.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no market pressure to drive down prices. The government misses out on potential savings that could have been realized through a competitive bidding environment.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Air Force, which will receive advanced communication equipment. The contract supports the development, production, and delivery of radio and TV communication equipment. The geographic impact is primarily tied to Lockheed Martin's facilities in New York, where the contractor is located. The contract likely supports a workforce skilled in electronics manufacturing and communication systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential taxpayer savings.
Lack of transparency in the justification for sole-source procurement.
Long contract duration could lead to cost overruns if not managed effectively.

Positive Signals

Award to a known defense contractor with established capabilities.
Contract addresses a specific need for communication equipment within the DoD.
Firm fixed-price contract structure shifts some risk to the contractor.

Sector Analysis

This contract falls within the 'Electronics and Communication Equipment' sector, specifically related to radio and television communication systems. This industry is characterized by rapid technological advancements and significant government procurement, particularly from the defense sector. The market size for such specialized equipment is substantial, driven by national security needs. Comparable spending benchmarks would involve analyzing other sole-source or competitively awarded contracts for similar communication systems within the Department of Defense.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting plans for small businesses. The award to a large prime contractor like Lockheed Martin suggests that the primary focus was on the prime's capabilities rather than fostering small business participation. This could limit opportunities for small businesses within the electronics and communication equipment supply chain for this specific procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management systems. Accountability measures are inherent in the firm fixed-price structure, which incentivizes the contractor to meet cost targets. Transparency is limited due to the sole-source nature of the award, with justifications for this approach usually available through contract award databases, though detailed operational oversight specifics are not provided.

Related Government Programs

Department of Defense Communication Systems Procurement
Air Force Electronics and Equipment Contracts
Lockheed Martin Defense Contracts
Sole-Source Defense Procurements
Radio and Television Broadcasting Equipment Manufacturing

Risk Flags

Sole-source award
Lack of competition
Potential for inflated pricing
Limited transparency on justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $91.0 million to LOCKHEED MARTIN CORPORATION. 200605!000063!5700!FA8706!OC2SG/PK !FA872005C0002 !A!N! !N! ! !20051007!20081112!158140041!158140041!834951691!N!LOCKHEED MARTIN CORPORATION !497 ELECTRONICS PKWY # 5 #!LIVERPOOL !NY!13088!73000!067!36!SYRACUSE !ONONDAGA !NEW YORK !+000089000000!Y!N!000089000000!5820!RADIO & TV COMM EQUIPMENT, EXCEPT AIRBORNE !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !NOT DISCERNABLE !334511!E! !3! ! ! ! ! !999

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 $91.0 million.

What is the period of performance?

Start: 2005-10-07. End: 2011-04-30.

What specific type of radio and TV communication equipment is being procured, and what is its intended use within the Air Force?

The contract specifies 'RADIO & TV COMM EQUIPMENT, EXCEPT AIRBORNE' under NAICS code 334511. While the exact technical specifications are not detailed in the provided data, this category generally includes equipment used for broadcasting, transmitting, and receiving radio and television signals. For the Air Force, such equipment could be used for base communications, command and control systems, training simulations, or public affairs broadcasting. The 'except airborne' designation implies ground-based or fixed-site installations rather than equipment for aircraft.

What was the justification for awarding this contract on a sole-source basis to Lockheed Martin Corporation?

The provided data indicates the contract was 'NOT COMPETED'. Justifications for sole-source awards typically fall into categories such as urgency, unique capabilities, or lack of adequate competition. Without the specific justification document, it's presumed that the Air Force determined Lockheed Martin was the only responsible source capable of meeting the requirement. This could be due to proprietary technology, existing system integration, or specialized expertise that other potential contractors lacked. A thorough review of the contract file would be necessary to ascertain the precise rationale.

How does the contract value of $158.14 million compare to other similar procurements for communication equipment within the Department of Defense?

Benchmarking this $158.14 million contract against similar procurements is challenging without more specific details on the equipment type and its intended application. However, for large-scale defense procurements of specialized electronic systems, this value is significant but not extraordinary. Contracts for advanced radar, communication suites, or electronic warfare systems can easily reach or exceed this figure. The key differentiator here is the sole-source nature, which makes direct price comparisons to competitively won contracts less meaningful. A comparative analysis would ideally look at contracts awarded under similar NAICS codes or PSC codes for non-airborne communication equipment over the same period.

What is Lockheed Martin Corporation's track record with the Department of the Air Force for similar types of equipment?

Lockheed Martin Corporation is a major defense contractor with a long-standing relationship with the Department of Defense, including the Air Force. They have a broad portfolio encompassing aerospace, defense, security, and information systems. While specific details on their history with 'RADIO & TV COMM EQUIPMENT, EXCEPT AIRBORNE' are not in this data snippet, Lockheed Martin is known for producing complex electronic systems, including radar, communications, and avionics. Their extensive experience in defense contracting suggests a strong capability to deliver on such requirements, though the sole-source nature of this particular award warrants scrutiny.

What are the potential risks associated with a sole-source contract of this magnitude and duration?

The primary risks associated with a sole-source contract of this magnitude ($158.14M) and duration (over 6 years) include potential cost overruns, reduced innovation, and a lack of incentive for the contractor to achieve maximum efficiency. Without competition, there's less pressure on Lockheed Martin to find the most cost-effective solutions or to incorporate cutting-edge technology unless explicitly required. Furthermore, the government is reliant on the contractor's performance and pricing without the benefit of market validation. There's also a risk of vendor lock-in, making future transitions to different systems more complex and expensive.

How does the firm fixed-price contract type influence risk allocation and potential cost savings?

A Firm Fixed Price (FFP) contract type, as indicated by 'PT': 'FIRM FIXED PRICE', places the primary risk of cost overruns on the contractor, Lockheed Martin Corporation. This means the contractor is obligated to complete the work for the agreed-upon price, regardless of their actual costs. This structure incentivizes the contractor to manage costs efficiently and can lead to significant savings for the government if the contractor performs well. However, in a sole-source environment, the initial agreed-upon price might be higher than it would be in a competitive scenario, potentially offsetting some of the benefits of the FFP structure.

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

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 497 ELECTRONICS PKWY # 5 #, LIVERPOOL, NY, 22

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

Financial Breakdown

Contract Ceiling: $90,980,853

Exercised Options: $1,980,853

Current Obligation: $90,995,720

Contract Characteristics

Cost or Pricing Data: NO

Timeline