DoD's $42.5M radar system contract awarded to Lockheed Martin shows limited competition and potential value concerns

Contract Overview

Contract Amount: $42,459,174 ($42.5M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2016-10-14

End Date: 2019-11-30

Contract Duration: 1,142 days

Daily Burn Rate: $37.2K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: RJAF - GAP FILLER RADAR

Place of Performance

Location: LIVERPOOL, ONONDAGA County, NEW YORK, 13088

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $42.5 million to LOCKHEED MARTIN CORPORATION for work described as: RJAF - GAP FILLER RADAR Key points: 1. The contract was awarded on a sole-source basis, limiting competitive pressure on pricing. 2. The firm-fixed-price structure shifts some risk to the contractor, but the lack of competition may inflate costs. 3. Performance duration of over three years suggests a significant, long-term need for the radar system. 4. The system falls under the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' NAICS code. 5. The contract's value is substantial, warranting close scrutiny of its cost-effectiveness. 6. The absence of small business set-asides or subcontracting requirements is noted.

Value Assessment

Rating: fair

Benchmarking the value of this specific radar system is challenging due to its specialized nature and the limited competition. The firm-fixed-price contract provides some cost certainty, but the lack of competitive bids means there's no direct market comparison to assess if the $42.5 million represents a fair price. Without more data on the system's capabilities and performance against requirements, a definitive value assessment is difficult. However, sole-source awards often carry a premium.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Lockheed Martin Corporation, was solicited. The justification for sole-source procurement is not provided in the data, but typically it involves unique capabilities or urgent needs. The lack of competition means there was no opportunity for multiple companies to bid, which can limit price discovery and potentially lead to higher costs for the government.

Taxpayer Impact: Taxpayers may have paid a higher price than if the contract had been competed. The absence of competitive pressure reduces the government's leverage to negotiate the best possible terms and pricing.

Public Impact

The Department of the Air Force is the primary beneficiary, acquiring a critical radar system. The system is intended to fulfill a gap in radar capabilities for the Air Force. The geographic impact is likely within Air Force operational areas, potentially global. The contract supports high-skilled manufacturing and engineering jobs within Lockheed Martin and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source award lacks transparency in pricing justification.
Potential for cost overruns if not closely managed due to limited oversight from competition.

Positive Signals

Firm-fixed-price contract shifts some performance risk to the contractor.
Award to a large, established defense contractor suggests a degree of reliability.
The system addresses a specific identified capability gap.

Sector Analysis

The aerospace and defense sector is characterized by high R&D costs, long development cycles, and significant government procurement. This contract falls under the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' category, a specialized segment within defense electronics. The market is often dominated by a few large prime contractors like Lockheed Martin, with competition typically driven by technological innovation and existing relationships. The total addressable market for such specialized radar systems is difficult to quantify but is a significant portion of the overall defense electronics spending.

Small Business Impact

This contract does not appear to include any small business set-aside provisions, nor is there information indicating subcontracting goals for small businesses. The award to a large prime contractor like Lockheed Martin suggests that the primary focus was on capability and delivery rather than small business participation. This could mean limited opportunities for small businesses to participate directly in this specific contract, although they may be part of Lockheed Martin's broader supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. As a firm-fixed-price contract, the focus is on ensuring the contractor meets the defined technical specifications and delivery schedule. Transparency is limited by the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Air Force Radar Modernization Programs
Defense Electronic Systems Procurement
Advanced Sensor Technology Development
Aerospace Manufacturing Contracts

Risk Flags

Sole-source award lacks competitive justification.
Potential for uncompetitive pricing.
Lack of transparency in award rationale.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $42.5 million to LOCKHEED MARTIN CORPORATION. RJAF - GAP FILLER RADAR

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 $42.5 million.

What is the period of performance?

Start: 2016-10-14. End: 2019-11-30.

What specific radar capabilities does the RJAF - GAP FILLER RADAR system provide, and how do these capabilities address the identified gap?

The provided data does not detail the specific technical capabilities of the RJAF - GAP FILLER RADAR system. However, the NAICS code 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' suggests it is involved in advanced sensing and tracking. The term 'GAP FILLER' implies it is intended to augment or replace existing radar coverage that has deficiencies or has become obsolete. Understanding the precise nature of the 'gap' (e.g., range, resolution, target identification, electronic countermeasure resistance) would be crucial for assessing the system's necessity and effectiveness. Without this information, it's difficult to fully evaluate the $42.5 million investment's strategic value.

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

The data indicates the contract was awarded 'NOT AVAILABLE FOR COMPETITION,' which is synonymous with a sole-source award. The specific justification for this determination is not provided. Common reasons for sole-source awards in defense contracting include the existence of unique or specialized technology only available from a single source, urgent and compelling requirements where competition is impractical, or if the contract is a follow-on to a previously competed effort where only the original contractor possesses the necessary knowledge or tooling. Without the official justification document, it is impossible to verify the validity of the sole-source determination and assess if competition was truly not feasible.

How does the $42.5 million contract value compare to similar radar system procurements by the Department of Defense or other agencies?

Directly comparing the $42.5 million value of the RJAF - GAP FILLER RADAR system to similar procurements is challenging without more specific technical details and contract terms. Radar systems vary significantly in complexity, capability, and scale. However, for context, major radar system procurements for military aircraft or ground installations can range from tens of millions to hundreds of millions of dollars. The firm-fixed-price nature of this contract suggests a defined scope. To assess value, one would ideally compare it against systems with comparable performance metrics (e.g., detection range, target tracking capacity, environmental operating conditions) procured under competitive conditions. The lack of competition here makes a direct benchmark difficult.

What is Lockheed Martin Corporation's track record with similar defense electronics and radar system contracts?

Lockheed Martin Corporation is a major defense contractor with extensive experience in developing and producing a wide array of defense electronics, including radar systems. They are known for producing advanced radar technologies for various platforms, such as fighter jets (e.g., F-35, F-22), surveillance aircraft, and missile defense systems. Their track record generally includes successful delivery of complex systems, though like any large contractor, they have also faced scrutiny over cost and performance on specific programs. For this particular 'GAP FILLER' radar, their established expertise in radar technology suggests a capability to deliver, but the sole-source nature warrants careful monitoring of execution.

Are there any performance metrics or key performance indicators (KPIs) associated with this contract that can be used to evaluate its success?

The provided data does not include specific performance metrics or Key Performance Indicators (KPIs) for the RJAF - GAP FILLER RADAR system contract. Typically, such details would be outlined in the contract's Statement of Work (SOW) or Performance Work Statement (PWS). These metrics would define the acceptable levels of performance, reliability, availability, and maintainability for the radar system. Without access to these KPIs, it is difficult to objectively evaluate whether the system is meeting the government's needs and whether the $42.5 million investment is yielding the expected operational benefits. Post-award performance reports would be necessary for a thorough assessment.

What has been the historical spending trend for similar radar systems or 'gap filler' technologies within the Department of Defense?

Historical spending on radar systems and related technologies within the Department of Defense is substantial and spans decades, reflecting the critical role of radar in military operations. 'Gap filler' technologies, specifically, are often part of modernization efforts addressing obsolescence or capability gaps in existing systems. While precise figures for 'gap filler' radar spending are not readily available without deep dives into specific program budgets, the DoD consistently allocates billions annually to radar research, development, and procurement across various services (Air Force, Navy, Army). This contract represents a specific instance within that broader, ongoing investment in advanced sensor capabilities.

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 AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 497 ELECTRONICS PKWY BLDG 5, LIVERPOOL, NY, 13088

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: $42,459,174

Exercised Options: $42,459,174

Current Obligation: $42,459,174

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline