DoD Awards $51.5M Engineering Services Contract to Lockheed Martin for Combat System
Contract Overview
Contract Amount: $51,512,670 ($51.5M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2020-09-09
End Date: 2024-11-30
Contract Duration: 1,543 days
Daily Burn Rate: $33.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: ENGINEERING SERVICES - CET 20-006 - LUSV CSL BASED COMBAT SYSTEM - NEW TASK
Place of Performance
Location: MOORESTOWN, BURLINGTON County, NEW JERSEY, 08057
Plain-Language Summary
Department of Defense obligated $51.5 million to LOCKHEED MARTIN CORPORATION for work described as: ENGINEERING SERVICES - CET 20-006 - LUSV CSL BASED COMBAT SYSTEM - NEW TASK Key points: 1. Contract awarded to a large, established defense contractor. 2. Significant contract value suggests a critical component or long-term need. 3. Potential for cost overruns exists with Cost Plus Fixed Fee contract type. 4. The sector is dominated by a few large players, limiting competition. 5. No explicit small business participation noted.
Value Assessment
Rating: fair
The Cost Plus Fixed Fee (CPFF) contract type allows for cost reimbursement plus a fixed fee, which can lead to higher costs if not managed tightly. Benchmarking against similar complex engineering services contracts for naval combat systems is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the specific nature of combat systems may inherently limit the number of capable bidders, potentially impacting price discovery.
Taxpayer Impact: Taxpayer funds are being used for advanced defense engineering. While competition is intended to ensure fair pricing, the CPFF structure requires diligent oversight to prevent cost escalation.
Public Impact
Enhances naval combat capabilities, directly impacting national security. Supports advanced technology development within the defense sector. Funds a major defense contractor, potentially creating jobs and economic activity in related industries.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type can incentivize cost overruns.
- Lack of explicit small business participation.
- Limited transparency on specific cost drivers for this complex system.
Positive Signals
- Awarded under full and open competition.
- Supports critical defense infrastructure.
- Long-term contract duration suggests sustained need and development.
Sector Analysis
This contract falls within the Engineering Services sector, specifically for defense applications. Spending in this area is substantial, driven by national security needs and technological advancements. Benchmarks are highly specific to the complexity and nature of the defense system.
Small Business Impact
The data indicates that small business participation was not a stated requirement or outcome for this specific contract. This is common for large, complex defense systems where specialized capabilities are often held by prime contractors.
Oversight & Accountability
The Department of Defense, through the Defense Microelectronics Activity, is responsible for oversight. The CPFF contract type necessitates robust monitoring of costs and performance to ensure value for taxpayer money and prevent contractor overcharging.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Microelectronics Activity Programs
Risk Flags
- Cost Plus Fixed Fee contract type.
- Potential for scope creep.
- Limited visibility into specific cost drivers.
- No explicit small business participation.
Tags
engineering-services, department-of-defense, nj, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $51.5 million to LOCKHEED MARTIN CORPORATION. ENGINEERING SERVICES - CET 20-006 - LUSV CSL BASED COMBAT SYSTEM - NEW TASK
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Microelectronics Activity).
What is the total obligated amount?
The obligated amount is $51.5 million.
What is the period of performance?
Start: 2020-09-09. End: 2024-11-30.
What specific engineering challenges does the LUSV CSL combat system address, and how does this contract contribute to overcoming them?
The LUSV CSL combat system likely addresses evolving threats and operational requirements for naval vessels, potentially involving advanced sensor integration, weapon control, and network-centric warfare capabilities. This contract funds the critical engineering services needed to design, develop, and integrate these complex systems, ensuring the platform meets its intended mission objectives and maintains technological superiority.
Given the CPFF structure, what mechanisms are in place to mitigate the risk of cost overruns and ensure efficient use of funds?
While CPFF contracts inherently carry cost overrun risk, effective oversight by the Defense Microelectronics Activity is crucial. This includes rigorous review of incurred costs, regular performance reviews, and potentially establishing target costs or fee incentives tied to performance metrics. Clear communication and defined scope management are essential to control expenditures and ensure the fixed fee remains appropriate.
How does the integration of this combat system align with broader DoD modernization goals and technological roadmaps?
The integration of the LUSV CSL combat system is likely a key component of the DoD's strategy to modernize naval forces and maintain a technological edge. It probably supports initiatives related to networked warfare, autonomous capabilities, and enhanced lethality. This contract ensures that the combat system aligns with future operational concepts and integrates seamlessly with other platforms and systems within the broader defense architecture.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: HQ072715R0001
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 1801 STATE RT 17 C, OWEGO, NY, 13827
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: $102,919,933
Exercised Options: $102,919,933
Current Obligation: $51,512,670
Subaward Activity
Number of Subawards: 123
Total Subaward Amount: $27,802,690
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HQ072716D0001
IDV Type: IDC
Timeline
Start Date: 2020-09-09
Current End Date: 2024-11-30
Potential End Date: 2024-11-30 00:00:00
Last Modified: 2025-11-05
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