DoD's $24.7M JSTARS Recap contract awarded to Lockheed Martin for engineering services

Contract Overview

Contract Amount: $24,722,727 ($24.7M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2015-08-07

End Date: 2016-07-06

Contract Duration: 334 days

Daily Burn Rate: $74.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: JSTARS RECAP, PRE-ENGINEERING&MANUFACTURING DEVELOPMENT EFFORT

Place of Performance

Location: KING OF PRUSSIA, MONTGOMERY County, PENNSYLVANIA, 19406

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $24.7 million to LOCKHEED MARTIN CORPORATION for work described as: JSTARS RECAP, PRE-ENGINEERING&MANUFACTURING DEVELOPMENT EFFORT Key points: 1. Contract awarded for pre-engineering and manufacturing development, indicating a focus on early-stage project definition. 2. The firm-fixed-price contract type suggests that cost risks are largely borne by the contractor. 3. Competition was full and open, implying a robust bidding process. 4. The contract duration of 334 days is relatively short for a major engineering development effort. 5. The contract was awarded by the Department of the Air Force, a key branch within the DoD. 6. The North American Industry Classification System (NAICS) code 541330 points to engineering services.

Value Assessment

Rating: fair

Benchmarking the value of this specific pre-engineering effort is challenging without more detailed cost breakdowns or comparisons to similar early-stage development contracts. The total award amount of $24.7 million for a 334-day period suggests a significant investment in defining the JSTARS recapitalization program. However, without insight into the specific deliverables and the level of effort required, a definitive value-for-money assessment is difficult. Further analysis would require understanding the scope of work and comparing it to industry standards for similar pre-engineering phases.

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 a bid. The presence of 4 bids suggests a competitive environment for this engineering services requirement. A competitive process like this generally leads to better price discovery and potentially more favorable terms for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: Full and open competition ensures that taxpayer dollars are used efficiently by fostering a market-driven pricing environment, potentially leading to cost savings.

Public Impact

The primary beneficiaries are the Department of Defense and specifically the U.S. Air Force, who will receive engineering services crucial for the JSTARS recapitalization program. The services delivered are focused on pre-engineering and manufacturing development, laying the groundwork for future JSTARS aircraft. The geographic impact is primarily within the United States, supporting national defense initiatives. Workforce implications include employment for engineers and technical specialists involved in the design and development phases.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The short duration of the contract (334 days) might raise questions about the thoroughness of the pre-engineering effort for a program as complex as JSTARS recapitalization.
Lack of detailed public information on specific deliverables makes it difficult to fully assess the scope and potential risks associated with this phase.

Positive Signals

Awarded under full and open competition, suggesting a fair and transparent procurement process.
The firm-fixed-price contract type shifts cost risk to the contractor, which can be beneficial for the government.
Lockheed Martin Corporation is a major defense contractor with extensive experience, suggesting a capable awardee.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on engineering services for a major military platform recapitalization. The market for such specialized engineering services is dominated by large defense contractors. Spending in this area is driven by the need to modernize aging military assets and maintain technological superiority. Comparable spending benchmarks would typically involve other large-scale defense platform development contracts, though early-stage engineering efforts can vary significantly in cost.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Lockheed Martin Corporation is a large prime contractor. While the prime contract is not set aside for small businesses, there may be subcontracting opportunities for small businesses within the scope of this engineering effort. The extent of small business participation would depend on Lockheed Martin's subcontracting plan and the specific needs of the project.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management structures. Accountability measures are inherent in the firm-fixed-price contract type, which incentivizes the contractor to meet cost and performance targets. Transparency is generally facilitated through contract award databases and reporting requirements, though specific details of the engineering work may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

JSTARS Program
Airborne Early Warning and Control Systems
ISR (Intelligence, Surveillance, and Reconnaissance) Platforms
Defense Engineering Services
Military Aircraft Modernization

Risk Flags

Potential for scope creep in early-stage development
Technical feasibility risks in new platform development
Long-term cost estimation uncertainty for recapitalization programs

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.7 million to LOCKHEED MARTIN CORPORATION. JSTARS RECAP, PRE-ENGINEERING&MANUFACTURING DEVELOPMENT EFFORT

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 $24.7 million.

What is the period of performance?

Start: 2015-08-07. End: 2016-07-06.

What is the track record of Lockheed Martin Corporation in delivering similar pre-engineering and manufacturing development services for large defense platforms?

Lockheed Martin Corporation has a long and extensive track record in delivering complex engineering and manufacturing development services for a wide array of large defense platforms, including aircraft, missiles, and space systems. They have been a prime contractor on numerous significant programs for the U.S. military, often involving early-stage conceptualization, design, prototyping, and system integration. Their experience spans decades and includes work on programs like the F-35 fighter jet, various satellite systems, and other advanced aerospace technologies. This deep experience suggests a strong capability to manage the technical and programmatic challenges inherent in the JSTARS recapitalization's pre-engineering phase. However, the success of any specific contract also depends on the detailed requirements, funding, and program management specific to that effort.

How does the $24.7 million award compare to the typical cost of pre-engineering and manufacturing development for major defense platforms?

The $24.7 million award for the JSTARS Recapitalization's pre-engineering and manufacturing development effort is a substantial sum, but its comparability to other major defense platforms is nuanced. Early-stage development phases, especially for complex intelligence, surveillance, and reconnaissance (ISR) platforms like JSTARS, can vary significantly in cost depending on the scope of work, the maturity of the existing technology, and the specific objectives of the development effort. This amount is likely representative of a focused effort to define requirements, explore design alternatives, and mature key technologies before committing to full-scale production. Without specific details on the deliverables and the number of design iterations or prototypes planned, a direct comparison to other programs' pre-engineering phases is difficult. However, it reflects a significant investment in de-risking the program before major production outlays.

What are the primary risks associated with this specific contract, given its focus on pre-engineering and manufacturing development?

The primary risks associated with this pre-engineering and manufacturing development contract revolve around scope definition and technical feasibility. A key risk is that the requirements may not be fully defined or may change significantly as the program progresses, leading to potential cost overruns or schedule delays in subsequent phases. Another risk is the technical feasibility of the proposed solutions; early-stage development aims to identify and mitigate these, but unforeseen technical challenges can emerge. Furthermore, the contractor's ability to accurately estimate costs and timelines for future phases based on this early work is a risk. Finally, ensuring that the developed concepts align with the operational needs of the Air Force and can be efficiently manufactured at scale are critical risks that this phase aims to address.

What is the historical spending pattern for the JSTARS program or similar ISR platform recapitalization efforts?

Historical spending patterns for the JSTARS program and similar ISR platform recapitalization efforts are generally characterized by significant, long-term investments. The original JSTARS fleet (E-8C) has undergone numerous upgrades and sustainment efforts over its operational life, representing substantial cumulative spending. Recapitalization programs, by their nature, involve large capital outlays spread across multiple phases: initial concept and design, engineering and manufacturing development (EMD), low-rate initial production (LRIP), and full-rate production, followed by sustainment. Spending typically escalates through these phases, with EMD and production representing the largest cost centers. The $24.7 million awarded here is an early investment, indicative of the much larger sums required for a full recapitalization, which can easily run into billions of dollars over the program's lifecycle.

How does the 'full and open competition' aspect influence the potential for cost savings for the government on this contract?

The 'full and open competition' aspect is a significant factor in potentially achieving cost savings for the government on this contract. By allowing all responsible sources to bid, the government maximizes the number of potential offerors, thereby increasing the likelihood of receiving competitive proposals. This competitive pressure typically drives down prices as contractors vie for the award. Furthermore, a broader competition can lead to innovative solutions and more efficient approaches that might not be considered under a more restricted procurement. The presence of four bids, as noted, indicates a degree of competition, which is generally favorable for price discovery and achieving value for taxpayer money compared to sole-source or limited-source procurements where competitive pressure is inherently lower.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 230 MALL BLVD, KING OF PRUSSIA, PA, 19406

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

Financial Breakdown

Contract Ceiling: $24,722,727

Exercised Options: $24,722,727

Current Obligation: $24,722,727

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS23F0150S

IDV Type: FSS

Timeline