DoD awards $206M for Dry Combat Submersibles to Lockheed Martin, with a 5-year performance period

Contract Overview

Contract Amount: $205,976,096 ($206.0M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2016-07-13

End Date: 2026-06-30

Contract Duration: 3,639 days

Daily Burn Rate: $56.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: DRY COMBAT SUBMERSIBLE CONTRACT AWARD, IGF::OT::IGF

Place of Performance

Location: RIVIERA BEACH, PALM BEACH County, FLORIDA, 33404

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $206.0 million to LOCKHEED MARTIN CORPORATION for work described as: DRY COMBAT SUBMERSIBLE CONTRACT AWARD, IGF::OT::IGF Key points: 1. The contract value of $206 million over approximately 5 years suggests a significant investment in specialized underwater capabilities. 2. Lockheed Martin, a major defense contractor, was awarded this definitive contract, indicating a strong existing relationship or competitive advantage. 3. The fixed-price incentive (FPI) contract type suggests that cost overruns are shared between the government and the contractor, incentivizing cost control. 4. The contract's performance period spans nearly 10 years, from award in 2016 to completion in 2026, allowing for development and integration. 5. The absence of small business set-asides indicates this contract was likely awarded based on specialized technical requirements rather than broad socioeconomic goals. 6. The primary performance location in Florida suggests a concentration of specialized shipbuilding or integration facilities in that region.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable systems. However, the $206 million award for specialized submersible technology over a decade suggests a substantial investment. The fixed-price incentive structure aims to balance cost control with performance, but the ultimate value for money will depend on the successful development and operational effectiveness of the Dry Combat Submersible.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The specific number of bidders is not provided, but this approach generally fosters a competitive environment, potentially leading to better pricing and innovation. The definitive contract award suggests a thorough evaluation process.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it maximizes the potential for competitive pricing and ensures that the government explores a wide range of solutions.

Public Impact

This contract directly benefits U.S. Special Operations Command (SOCOM) by providing advanced capabilities for special warfare and clandestine operations. The delivered service is the development and production of Dry Combat Submersibles, which are designed for covert insertion and extraction of special forces personnel. The primary geographic impact is within SOCOM's operational theaters, though the manufacturing and development may be concentrated in Florida. The contract supports a specialized segment of the defense industrial base, potentially involving highly skilled engineers, technicians, and manufacturing personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in fixed-price incentive contracts if performance targets are not met efficiently.
Long development cycles for highly specialized defense systems can introduce risks of technological obsolescence or changing operational requirements.
Dependence on a single prime contractor, Lockheed Martin, for a critical and unique capability.
Limited public information on the specific performance metrics and testing outcomes of the submersible.

Positive Signals

Awarded through full and open competition, suggesting a robust evaluation of multiple potential solutions.
Fixed-price incentive contract type aims to align contractor and government interests in cost control and performance.
Long contract duration allows for thorough development, testing, and integration of a complex system.
Award to a major defense contractor with established expertise in complex systems integration.

Sector Analysis

This contract falls within the Defense sector, specifically focusing on advanced maritime systems and special operations equipment. The market for such highly specialized underwater vehicles is niche, dominated by a few large defense contractors capable of undertaking complex R&D and manufacturing. Spending in this area is driven by evolving military requirements for stealth, endurance, and operational flexibility in contested maritime environments.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the specialized nature of the Dry Combat Submersible technology and the scale of the contract likely favored large, established defense contractors with the necessary infrastructure, expertise, and financial capacity. Subcontracting opportunities for small businesses may exist within the supply chain for components or specialized services, but the prime contract is not directly aimed at fostering small business participation.

Oversight & Accountability

Oversight for this contract would primarily fall under the U.S. Special Operations Command (SOCOM) and the Department of Defense's contracting and acquisition oversight bodies. The fixed-price incentive contract type includes performance targets that are subject to monitoring. Transparency is generally limited for highly sensitive defense programs, but standard DoD reporting mechanisms and potential Inspector General reviews would apply to ensure accountability.

Related Government Programs

Special Operations Forces Equipment
Naval Systems
Submersible Vehicles
Advanced Maritime Technology
Defense Acquisition Programs

Risk Flags

Long contract performance period increases risk of technological obsolescence.
Fixed-price incentive contracts can lead to cost overruns if not managed carefully.
Specialized nature of the system may limit competition and increase reliance on a single contractor.
Potential for classified performance metrics to limit public understanding of value for money.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $206.0 million to LOCKHEED MARTIN CORPORATION. DRY COMBAT SUBMERSIBLE CONTRACT AWARD, IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (U.S. Special Operations Command).

What is the total obligated amount?

The obligated amount is $206.0 million.

What is the period of performance?

Start: 2016-07-13. End: 2026-06-30.

What is the specific operational capability gap that the Dry Combat Submersible is intended to address for U.S. Special Operations Command?

The Dry Combat Submersible (DCS) is designed to address the need for clandestine, long-range insertion and extraction of special operations forces (SOF) personnel in denied or contested maritime environments. Traditional methods may carry higher risks of detection or have limitations in range and payload. The DCS aims to provide SOF with a platform that offers greater stealth, endurance, and the ability to carry a larger number of personnel and equipment, thereby enhancing mission flexibility and survivability during sensitive operations such as reconnaissance, direct action, or support missions.

How does the fixed-price incentive (FPI) contract structure influence cost management and contractor performance for this program?

The Fixed-Price Incentive (FPI) contract structure for the Dry Combat Submersible program creates a shared risk and reward mechanism between the government and Lockheed Martin. It establishes a target cost, a target profit, and a ceiling price. If the final cost is below the target, both parties share in the savings according to a pre-defined formula. Conversely, if the final cost exceeds the target, the contractor assumes a larger portion of the overrun up to the ceiling price. This incentivizes the contractor to control costs while meeting performance specifications, as they bear more financial risk for significant overruns beyond the target cost.

What are the key performance parameters (KPPs) or critical capabilities expected from the Dry Combat Submersible, and how are they measured?

While specific Key Performance Parameters (KPPs) are often classified for special operations equipment, typical critical capabilities for a Dry Combat Submersible would likely include: range (distance it can travel submerged), endurance (duration of submerged operation), speed (both submerged and surfaced), payload capacity (number of personnel and equipment), stealth characteristics (acoustic and radar signature reduction), depth rating, and reliability. Measurement would involve rigorous testing protocols, including sea trials, simulated operational scenarios, and independent verification of technical specifications against contract requirements.

What is Lockheed Martin's track record with developing and delivering complex underwater or special operations systems?

Lockheed Martin has a significant and extensive track record in developing and delivering complex defense systems, including naval platforms, submarines, and underwater vehicles. They are a major player in the submarine construction industry and have experience with various unmanned underwater vehicles (UUVs) and autonomous systems. Their expertise spans advanced materials, propulsion systems, sonar, and command and control for maritime applications. This background suggests they possess the technical and manufacturing capabilities required for a program as specialized as the Dry Combat Submersible.

How does the $206 million contract value compare to other major defense procurements for specialized maritime assets?

The $206 million award for the Dry Combat Submersible is a substantial sum, reflecting the highly specialized and technologically advanced nature of the system. When compared to broader naval procurements like destroyers or submarines, it appears modest. However, for a niche capability like a specialized submersible designed for special operations, this value is significant. It aligns with the procurement costs of other advanced unmanned systems or specialized aircraft programs, indicating a high investment in cutting-edge technology for a specific, high-value mission set.

What are the potential risks associated with the long performance period (2016-2026) for this contract?

The extended performance period of nearly ten years for the Dry Combat Submersible contract presents several potential risks. Firstly, technological advancements could outpace the system's capabilities by the time it is fully delivered and operational, potentially rendering it less effective against future threats. Secondly, evolving operational requirements or strategic shifts within SOCOM could alter the mission profile or necessity of the DCS. Thirdly, long development cycles increase the likelihood of encountering unforeseen technical challenges, cost growth, or integration issues. Finally, maintaining contractor focus and program oversight over such an extended duration requires sustained effort.

Industry Classification

NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: H9222215R0039

Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 100 E 17TH ST, RIVIERA BEACH, FL, 33404

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: $211,126,935

Exercised Options: $208,371,691

Current Obligation: $205,976,096

Subaward Activity

Number of Subawards: 263

Total Subaward Amount: $2,340,821,106

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline