DoD's $22.6M contract for navigation systems awarded to Lockheed Martin, raising questions about competition

Contract Overview

Contract Amount: $22,635,545 ($22.6M)

Contractor: Lockheed Martin Corp

Awarding Agency: Department of Defense

Start Date: 2022-07-28

End Date: 2025-06-30

Contract Duration: 1,068 days

Daily Burn Rate: $21.2K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: OMS

Place of Performance

Location: MARIETTA, COBB County, GEORGIA, 30063

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $22.6 million to LOCKHEED MARTIN CORP for work described as: OMS Key points: 1. The contract's value of $22.6 million is significant for specialized navigation systems. 2. Awarded to a single, large defense contractor, it suggests limited competition. 3. The 'NOT AVAILABLE FOR COMPETITION' status is a key risk indicator. 4. The contract duration of 1068 days (approx. 3 years) indicates a long-term need. 5. The Cost Plus Fixed Fee (CPFF) pricing structure can lead to cost overruns. 6. The absence of small business involvement warrants further investigation.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without more specific details on the navigation systems procured. However, the CPFF contract type, while common in R&D or uncertain scope projects, carries inherent risk for cost control. Compared to similar sole-source awards for specialized defense equipment, the $22.6 million may be within a typical range, but the lack of competitive bidding prevents a true value-for-money assessment. Without competitive pressure, the pricing may not reflect the lowest achievable cost.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'NOT AVAILABLE FOR COMPETITION' justification, indicating that only one source, Lockheed Martin Corp., was deemed capable or available to fulfill the requirement. This severely limits the competitive landscape. The absence of multiple bidders means there was no opportunity for price discovery through a bidding process, potentially leading to higher costs for the government and taxpayers.

Taxpayer Impact: The lack of competition means taxpayers did not benefit from potential cost savings that could have arisen from a competitive bidding process. This could translate to a higher overall expenditure for the required navigation systems.

Public Impact

The U.S. Special Operations Command (SOCOM) is the primary beneficiary, receiving critical navigation systems. The contract supports the development, manufacturing, or sustainment of advanced navigation and guidance systems. The geographic impact is likely concentrated within defense operations and potentially related to SOCOM's global mission. The contract supports specialized roles within the defense industrial base, potentially impacting a niche workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential innovation.
Cost Plus Fixed Fee (CPFF) contract type can incentivize cost overruns.
Lack of transparency in the 'NOT AVAILABLE FOR COMPETITION' justification.
No indication of small business participation or subcontracting opportunities.

Positive Signals

Award to a major defense contractor like Lockheed Martin suggests access to advanced technology and expertise.
The contract addresses a critical need for specialized navigation systems for U.S. Special Operations Command.
The long-term duration indicates a sustained requirement and potential for stable support.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on the manufacturing of navigation, guidance, and control systems. The market for such specialized defense electronics is often characterized by high barriers to entry due to technological complexity and stringent security requirements. Spending in this sub-sector is driven by national security needs and technological advancements. Comparable spending benchmarks would typically involve other sole-source or limited-competition awards for similar high-tech defense components.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. The award to a large prime contractor like Lockheed Martin often means that small business participation is not a primary focus unless specifically mandated. This could limit opportunities for small businesses within the defense supply chain for these specialized navigation systems.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense and U.S. Special Operations Command. The Inspector General's office within the DoD would have jurisdiction to investigate potential fraud, waste, or abuse. Transparency is limited by the sole-source nature of the award and the 'NOT AVAILABLE FOR COMPETITION' justification, making public scrutiny of the procurement process challenging.

Related Government Programs

Defense Advanced Research Projects Agency (DARPA) programs
Naval Air Systems Command (NAVAIR) contracts
Air Force Life Cycle Management Center (AFLCMC) procurements
Missile Defense Agency (MDA) contracts

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Lack of competition justification
No small business participation indicated

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.6 million to LOCKHEED MARTIN CORP. OMS

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORP.

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 $22.6 million.

What is the period of performance?

Start: 2022-07-28. End: 2025-06-30.

What specific navigation systems are being procured under this contract, and what is their intended use by U.S. Special Operations Command?

The contract is for 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing.' While the specific systems are not detailed in the provided data, this broad category suggests advanced equipment critical for SOCOM's diverse operational requirements. This could include components for aircraft, unmanned aerial vehicles (UAVs), maritime vessels, or ground-based navigation and targeting systems. The 'Search and Detection' aspect implies capabilities beyond basic navigation, potentially involving sensor integration for situational awareness or target acquisition in complex environments. The exact use is classified but undoubtedly tied to SOCOM's special operations missions, which demand high reliability and precision in challenging conditions.

What is the justification for awarding this contract on a sole-source basis, and were alternative sources considered?

The contract was awarded under the justification 'NOT AVAILABLE FOR COMPETITION.' This typically implies that only one responsible source is available or that the agency is authorized to award on a sole-source basis under specific circumstances, such as urgent and compelling needs, unique capabilities, or follow-on work to a previous sole-source award. Without further details from the contracting agency (U.S. Special Operations Command), the precise reason remains undisclosed. However, such justifications are subject to review, and agencies are generally required to explore competition to the maximum extent practicable. The lack of transparency here is a concern for ensuring fair and efficient use of taxpayer funds.

How does the Cost Plus Fixed Fee (CPFF) pricing structure impact cost control and potential for overruns in this contract?

The Cost Plus Fixed Fee (CPFF) contract type is used when the government agrees to pay the contractor's actual costs plus a fixed fee representing profit. This structure is often employed for research and development or when the scope of work is uncertain. While the fixed fee provides some incentive for the contractor to control costs (as their profit is capped), it shifts the primary cost risk to the government. If actual costs exceed estimates, the government pays the higher amount. This can lead to cost overruns, especially if the initial cost estimates are inaccurate or if unforeseen technical challenges arise during the contract period. Effective government oversight is crucial to manage costs under a CPFF arrangement.

What is Lockheed Martin Corp.'s track record with similar navigation system contracts for the Department of Defense or SOCOM?

Lockheed Martin Corporation is a major defense contractor with extensive experience in developing and manufacturing complex systems, including navigation, guidance, and control technologies for various military platforms. They have a long history of supporting the Department of Defense and its various branches, including Special Operations Command. While specific details on their past navigation system contracts with SOCOM are not provided here, their broad capabilities in aerospace, defense electronics, and systems integration suggest a strong, albeit potentially expensive, capability. Their track record generally involves large-scale, technologically advanced projects, often awarded through competitive or sole-source means depending on the specific requirement and market dynamics.

What is the historical spending trend for navigation system manufacturing (NAICS 334511) by the Department of Defense?

The provided data includes NAICS code 334511, which covers 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing.' Historical spending trends for this sector by the Department of Defense are substantial, reflecting the critical role of advanced navigation and guidance systems in modern warfare. While specific annual figures for DoD spending within this NAICS code are not in the provided data, the defense industry as a whole invests billions annually in R&D, procurement, and sustainment of such technologies. Spending is influenced by geopolitical factors, technological advancements, and specific platform modernization programs. The trend generally shows consistent, high-level investment due to the strategic importance of these systems.

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: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 86 SOUTH COBB DR, MARIETTA, GA, 30063

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: $28,221,766

Exercised Options: $28,221,766

Current Obligation: $22,635,545

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: H9240822D0001

IDV Type: IDC

Timeline