DoD's $52.7M ATDL IFMV contract to Lockheed Martin shows potential value concerns and limited competition

Contract Overview

Contract Amount: $52,738,918 ($52.7M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2018-09-28

End Date: 2022-09-19

Contract Duration: 1,452 days

Daily Burn Rate: $36.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF ADVANCED TACTICAL DATA LINK (ATDL) INTERIM FULL MOTION VIDEO (IFMV)

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76108

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $52.7 million to LOCKHEED MARTIN CORPORATION for work described as: IGF::OT::IGF ADVANCED TACTICAL DATA LINK (ATDL) INTERIM FULL MOTION VIDEO (IFMV) Key points: 1. The contract's cost-plus-fixed-fee structure may incentivize higher spending. 2. Limited competition raises questions about price discovery and potential overpayment. 3. The duration of the contract (1452 days) suggests a long-term need for these services. 4. Performance context is crucial to determine if the delivered services met expectations. 5. The sector positioning is within advanced tactical data links and video systems for defense. 6. The contract's value is significant within its niche, but requires benchmarking. 7. The absence of small business set-asides warrants further investigation into subcontracting opportunities.

Value Assessment

Rating: fair

The contract's Cost Plus Fixed Fee (CPFF) pricing structure, while common for complex R&D, can lead to higher costs if not closely managed. Benchmarking this contract's per-unit costs against similar tactical data link or interim full motion video systems is difficult without more granular data on deliverables. However, the total award of $52.7 million over approximately four years suggests a substantial investment. Without specific performance metrics or comparison to alternative solutions, assessing the true value-for-money is challenging, leaning towards a 'fair' assessment due to the pricing structure and lack of readily available benchmarks.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. However, the provided data does not specify the number of bids received. A high number of bidders typically leads to better price discovery and potentially lower costs for the government. If only a few bids were received despite full and open competition, it could suggest a specialized market or high barriers to entry, which might impact overall cost-effectiveness.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it promotes a competitive environment that can drive down prices. However, the ultimate benefit depends on the number of actual bidders and the effectiveness of the solicitation process in attracting diverse offers.

Public Impact

The Department of the Air Force benefits from enhanced tactical data link capabilities. Interim Full Motion Video (IFMV) services are delivered to support military operations. The geographic impact is likely concentrated where the Air Force operates, with a primary performance location in Texas. Workforce implications include specialized technical and consulting roles within Lockheed Martin and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee structure may lead to cost overruns if not managed stringently.
Lack of specific performance metrics makes it difficult to assess effectiveness and value.
Limited insight into the number of bidders under 'full and open' competition raises questions about true market competitiveness.
The contract's duration could indicate a lack of agile development or alternative solutions being explored.
No explicit small business set-aside suggests potential missed opportunities for smaller innovative firms.

Positive Signals

Awarded through full and open competition, theoretically allowing for broad market participation.
The contract addresses a critical defense need for advanced tactical data links and video.
Lockheed Martin is a major defense contractor with extensive experience in relevant technologies.
The contract has a defined period of performance, allowing for reassessment and potential re-competition.

Sector Analysis

The contract falls within the defense sector, specifically focusing on advanced communication and intelligence systems. The market for tactical data links and interim full motion video is highly specialized, dominated by large defense contractors. Spending in this area is driven by the need for real-time situational awareness and secure data transmission in military operations. Comparable spending benchmarks would likely be found within other major defense procurements for similar C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) capabilities.

Small Business Impact

The contract data indicates that small business participation was not a primary focus, as the 'sb' (small business) flag is false and there is no mention of a small business set-aside. This suggests that the primary award was made to a large business, Lockheed Martin Corporation. While large contracts can sometimes include subcontracting opportunities for small businesses, the absence of a specific set-aside or subcontracting plan requirement in the provided data means these opportunities may be limited or not explicitly mandated. Further analysis would be needed to determine if subcontracting goals were established.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. The Inspector General (IG) of the Department of Defense would have jurisdiction to investigate any potential fraud, waste, or abuse. Transparency is facilitated through contract databases like FPDS, but detailed performance reports and cost breakdowns are often considered sensitive or proprietary, limiting public visibility into day-to-day oversight.

Related Government Programs

Advanced Tactical Data Links
Interim Full Motion Video Systems
C4ISR Systems Procurement
Defense Communication Networks
Lockheed Martin Defense Contracts

Risk Flags

Cost-plus-fixed-fee pricing structure
Limited competition potential
Lack of specific performance metrics
Potential for technical obsolescence
Cybersecurity vulnerabilities

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $52.7 million to LOCKHEED MARTIN CORPORATION. IGF::OT::IGF ADVANCED TACTICAL DATA LINK (ATDL) INTERIM FULL MOTION VIDEO (IFMV)

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 $52.7 million.

What is the period of performance?

Start: 2018-09-28. End: 2022-09-19.

What specific capabilities does the ATDL IFMV system provide, and how do they enhance Air Force operations?

The Advanced Tactical Data Link (ATDL) Interim Full Motion Video (IFMV) system is designed to provide real-time, high-bandwidth video data transmission capabilities to support military operations. This includes enabling commanders and warfighters to have enhanced situational awareness by sharing live video feeds from various platforms (e.g., aircraft, ground sensors) across the battlefield. The 'interim' nature suggests it may be a temporary solution or a bridge to a more advanced system. These capabilities are crucial for intelligence, surveillance, and reconnaissance (ISR) missions, targeting, and command and control, ultimately improving decision-making speed and operational effectiveness in dynamic environments.

How does the Cost Plus Fixed Fee (CPFF) contract structure compare to other pricing models for similar defense systems, and what are the associated risks?

The Cost Plus Fixed Fee (CPFF) structure is often used for research and development or complex projects where the scope and final costs are difficult to estimate precisely upfront. The government agrees to pay the contractor's actual costs plus a predetermined fixed fee representing profit. While this allows for flexibility and encourages innovation, it carries risks for the government. If costs escalate beyond initial projections, the government bears the burden. Effective oversight, stringent cost controls, and clear performance metrics are essential to mitigate the risk of cost overruns and ensure value for money. Compared to fixed-price contracts, CPFF offers less cost certainty for the government but can be more suitable for high-risk, innovative endeavors.

What is the typical number of bidders for contracts of this nature (advanced tactical data links/video), and what does the competition level imply for this specific award?

Contracts for specialized defense technologies like advanced tactical data links and full motion video systems typically attract a limited number of bidders. This is due to the high technical expertise, proprietary technology, and established relationships required to compete effectively. While the data states 'full and open competition,' the actual number of bids received is critical. If only a few highly qualified companies bid, it suggests a concentrated market. This limited competition can potentially lead to higher prices than if a broader range of competitors were involved. Without knowing the exact number of bidders, it's difficult to definitively assess the price discovery achieved, but the specialized nature implies competition might be inherently constrained.

What is Lockheed Martin Corporation's track record with similar DoD contracts, particularly in C4ISR and data link systems?

Lockheed Martin Corporation is a major defense contractor with a substantial and long-standing track record of delivering complex systems to the Department of Defense, including in the C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) domain. They have been involved in numerous programs related to tactical data links, satellite communications, airborne platforms, and sensor integration. Their experience encompasses system design, development, integration, and sustainment. While their extensive experience suggests a high likelihood of technical capability, past performance reviews, contract award histories, and any documented issues on previous similar contracts would be necessary for a comprehensive assessment of their track record specifically for this ATDL IFMV contract.

How does the $52.7 million award compare to historical spending on similar ATDL or IFMV systems by the DoD or other agencies?

Determining precise historical spending benchmarks for 'ATDL IFMV' requires access to detailed historical contract data, which is not fully provided here. However, $52.7 million over approximately four years for a specialized defense system is a significant, but not extraordinary, amount within the context of DoD procurements. Similar systems, such as advanced sensor integration, data fusion platforms, or secure communication networks, often involve contract values ranging from tens to hundreds of millions of dollars over their lifecycle. The value should be assessed relative to the system's capabilities, technological sophistication, and the duration of its service life. Without specific comparable contract data, it's challenging to definitively state if this represents high or low spending, but it falls within a plausible range for advanced defense technology.

Are there any identified risks or concerns associated with the performance or technology of the ATDL IFMV system awarded to Lockheed Martin?

The provided data does not explicitly list specific performance risks or technological concerns for the ATDL IFMV system. However, general risks associated with such contracts include potential technical obsolescence, integration challenges with existing military networks, cybersecurity vulnerabilities, and the inherent risks of a CPFF contract structure leading to cost overruns. The 'interim' designation might also imply that the system has limitations or is a placeholder, potentially requiring future upgrades or replacements, which represents a programmatic risk. A thorough risk assessment would typically involve reviewing technical documentation, program milestone reports, and any independent government cost estimates or analyses.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Other Scientific and Technical Consulting Services

Product/Service Code: SPECIAL STUDIES/ANALYSIS, NOT R&D › SPECIAL STUDIES - NOT R and D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 1 LOCKHEED BLVD BLDG 10, FORT WORTH, TX, 76108

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: $52,738,918

Exercised Options: $52,738,918

Current Obligation: $52,738,918

Actual Outlays: $4,474,199

Subaward Activity

Number of Subawards: 15

Total Subaward Amount: $6,704,746

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA872618D0016

IDV Type: IDC

Timeline