DoD's $41.4M R&D contract with Lockheed Martin for attitude control systems shows fair value despite limited competition
Contract Overview
Contract Amount: $41,426,553 ($41.4M)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2017-03-09
End Date: 2021-01-31
Contract Duration: 1,424 days
Daily Burn Rate: $29.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: IGF::OT::IGF R&D DIVERT AND ATTITUDE CONTROL SYSTEM
Place of Performance
Location: SUNNYVALE, SANTA CLARA County, CALIFORNIA, 94089
Plain-Language Summary
Department of Defense obligated $41.4 million to LOCKHEED MARTIN CORP for work described as: IGF::OT::IGF R&D DIVERT AND ATTITUDE CONTROL SYSTEM Key points: 1. Contract awarded through full and open competition, indicating a broad search for qualified vendors. 2. The contract's cost-plus-fixed-fee structure allows for flexibility in research and development projects. 3. Performance period of 1424 days suggests a substantial, long-term research initiative. 4. The contractor, Lockheed Martin, is a major defense industry player with extensive experience. 5. The specific NAICS code (541712) points to specialized R&D in physical sciences. 6. The contract's value is moderate within the context of large-scale defense R&D programs.
Value Assessment
Rating: fair
The contract value of approximately $41.4 million for R&D in attitude control systems appears reasonable given the contractor's expertise and the specialized nature of the work. Benchmarking against similar R&D contracts in advanced aerospace technologies would provide a more precise value-for-money assessment. However, the cost-plus-fixed-fee (CPFF) pricing structure, while common for R&D, can sometimes lead to cost overruns if not managed tightly. The fixed fee component provides some incentive for the contractor to control costs.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, suggesting that multiple bidders were likely solicited and considered. The presence of a single award indicates that Lockheed Martin was selected as the most advantageous offer. The level of competition, while broad in its initial solicitation, ultimately resulted in a single award, which warrants further examination to ensure optimal price discovery and value for the government.
Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it aims to secure the best possible pricing and innovation by allowing a wide range of potential contractors to bid.
Public Impact
This contract directly benefits the Department of Defense by advancing missile defense capabilities through improved attitude control systems. The services delivered are critical for the operational effectiveness and precision of defense assets. The geographic impact is primarily within the United States, supporting national security objectives. The contract supports a highly specialized workforce in research and development within the aerospace and defense sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost growth inherent in Cost Plus Fixed Fee contracts if not rigorously managed.
- Limited insight into the specific performance metrics and success criteria for this R&D effort.
- The single award after full and open competition may warrant a review of the evaluation process to ensure maximum value.
Positive Signals
- Award to a highly reputable and experienced contractor (Lockheed Martin) in the defense sector.
- The contract addresses a critical technological need for missile defense systems.
- The use of full and open competition suggests an effort to leverage the broadest possible market.
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences, excluding biotechnology. The aerospace and defense industry is characterized by high R&D investment, complex technological requirements, and significant government spending. Comparable spending benchmarks for advanced R&D in missile defense systems would typically range from tens to hundreds of millions of dollars, depending on the scope and maturity of the technology.
Small Business Impact
There is no indication that this contract included a small business set-aside. Given the specialized nature of the R&D and the prime contractor's size, subcontracting opportunities for small businesses may exist, but they are not explicitly mandated by the contract terms. The impact on the small business ecosystem would depend on the extent to which Lockheed Martin engages small businesses for specialized components or services.
Oversight & Accountability
Oversight for this contract would typically be managed by the Missile Defense Agency (MDA) within the Department of Defense. Accountability measures would be tied to the contract's performance clauses and reporting requirements. Transparency is generally maintained through contract awards databases, though specific technical details of R&D may be sensitive. The Inspector General's office for the Department of Defense would have jurisdiction over potential fraud, waste, or abuse.
Related Government Programs
- Missile Defense Systems
- Aerospace Research and Development
- Advanced Guidance and Control Systems
- Department of Defense Research Contracts
- Lockheed Martin Defense Contracts
Risk Flags
- Cost Overrun Risk
- Technical Performance Uncertainty
- Limited Competition Outcome
Tags
defense, department-of-defense, missile-defense-agency, lockheed-martin-corp, research-and-development, attitude-control-system, cost-plus-fixed-fee, definitive-contract, full-and-open-competition, california, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $41.4 million to LOCKHEED MARTIN CORP. IGF::OT::IGF R&D DIVERT AND ATTITUDE CONTROL SYSTEM
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORP.
Which agency awarded this contract?
Awarding agency: Department of Defense (Missile Defense Agency).
What is the total obligated amount?
The obligated amount is $41.4 million.
What is the period of performance?
Start: 2017-03-09. End: 2021-01-31.
What is Lockheed Martin's track record with similar R&D contracts for the Department of Defense?
Lockheed Martin is a major defense contractor with a long history of performing complex research and development for the Department of Defense. They have extensive experience in areas such as missile systems, aerospace technology, and advanced materials. Analyzing their past performance on similar Cost Plus Fixed Fee (CPFF) contracts would reveal their ability to manage costs, meet technical milestones, and deliver on complex R&D objectives. While specific contract details are often proprietary, their consistent presence as a prime contractor on large-scale defense programs suggests a generally positive track record, though individual contract performance can vary.
How does the value of this contract compare to other attitude control system R&D efforts?
The $41.4 million contract value for attitude control system R&D is moderate within the context of major defense procurements. However, without specific details on the technological advancements sought, the complexity of the system, and the duration of the research, a direct comparison is challenging. R&D contracts can vary significantly in cost based on factors like the novelty of the technology, the required testing, and the level of innovation. To benchmark effectively, one would need to compare it against contracts for similar developmental stages, system complexities, and research objectives within the aerospace and defense sector, ideally from the same agency or with similar performance periods.
What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract?
The primary risk associated with a CPFF contract is the potential for cost overruns. While the contractor receives a fixed fee, the government bears the cost of all allowable expenses. If the contractor's actual costs exceed estimates, the government pays the difference. This structure can reduce the contractor's incentive to control costs rigorously, especially in complex R&D where unforeseen challenges are common. Effective oversight, detailed cost tracking, and clear performance metrics are crucial to mitigate these risks and ensure the government receives good value for its investment.
How effective is the Missile Defense Agency in managing R&D contracts of this nature?
The Missile Defense Agency (MDA) is responsible for developing and deploying a layered missile defense system, a highly complex and technologically demanding undertaking. Managing R&D contracts of this nature requires significant technical expertise and robust program management capabilities. The MDA has a history of managing large, complex R&D programs, often involving multiple contractors and advanced technologies. Their effectiveness can be assessed by reviewing program success rates, budget adherence, and the timely delivery of critical capabilities. While challenges are inherent in such advanced R&D, the MDA's continued focus on its mission suggests a functional, albeit demanding, management approach to these contracts.
What are the historical spending patterns for attitude control system R&D within the Department of Defense?
Historical spending patterns for attitude control system R&D within the Department of Defense are likely substantial and have evolved with technological advancements. The DoD invests heavily in maintaining and improving the precision and reliability of its weapon systems, where attitude control is a critical component. Spending in this area would fluctuate based on strategic priorities, the development cycles of new platforms, and the need to upgrade existing systems. Analyzing historical data would reveal trends in contract values, the types of technologies pursued (e.g., reaction wheels, thrusters, advanced sensors), and the primary contractors involved over time.
What is the significance of the NAICS code 541712 for this contract?
The North American Industry Classification System (NAICS) code 541712 designates 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology).' This classification indicates that the contract is specifically for scientific inquiry and experimentation aimed at discovering new knowledge and developing new or improved products, processes, or services within the physical and engineering sciences. For this contract, it signifies that the work involves advanced research into the physical principles and engineering applications related to attitude control systems, likely involving complex physics, materials science, and engineering design.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
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: HQ0147-15-BAA
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 1111 LOCKHEED MARTIN WAY, SUNNYVALE, CA, 94089
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $50,311,380
Exercised Options: $50,311,380
Current Obligation: $41,426,553
Subaward Activity
Number of Subawards: 19
Total Subaward Amount: $138,125,523
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2017-03-09
Current End Date: 2021-01-31
Potential End Date: 2021-01-31 00:00:00
Last Modified: 2022-06-08
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