DoD Awards $31.8M Engineering Services Contract for Vessel Combat System to Lockheed Martin
Contract Overview
Contract Amount: $31,764,797 ($31.8M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2023-08-01
End Date: 2026-08-31
Contract Duration: 1,126 days
Daily Burn Rate: $28.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: THIS TASK IS FOR ENGINEERING SERVICES TO ANALYZE, DESIGN, DEVELOP, PROTOTYPE, BUILD, INTEGRATE, TEST, AND DELIVER BUILDS OF A VESSEL COMBAT SYSTEM
Place of Performance
Location: OWEGO, TIOGA County, NEW YORK, 13827
State: New York Government Spending
Plain-Language Summary
Department of Defense obligated $31.8 million to LOCKHEED MARTIN CORPORATION for work described as: THIS TASK IS FOR ENGINEERING SERVICES TO ANALYZE, DESIGN, DEVELOP, PROTOTYPE, BUILD, INTEGRATE, TEST, AND DELIVER BUILDS OF A VESSEL COMBAT SYSTEM Key points: 1. Significant investment in advanced defense technology. 2. Lockheed Martin, a major defense contractor, is the awardee. 3. Contract duration extends over three years, indicating a substantial project. 4. Engineering services sector is critical for complex defense systems.
Value Assessment
Rating: good
The contract is a Cost Plus Fixed Fee type, which allows for flexibility in project scope but can lead to cost overruns if not managed carefully. The total award amount is substantial for engineering services.
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 that should drive favorable pricing. The award type is a delivery order against a contract.
Taxpayer Impact: Taxpayer funds are being used for the development of a critical defense system, aiming to enhance national security capabilities.
Public Impact
Enhances naval defense capabilities with a modern combat system. Supports technological advancement in military hardware. Potential for job creation within the defense industry.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contracts can be susceptible to scope creep and cost escalation.
- Long project duration may introduce risks related to technological obsolescence.
Positive Signals
- Awarded through full and open competition, indicating potential for good value.
- Experienced contractor with a strong track record in defense systems.
Sector Analysis
This contract falls within the Engineering Services sector, specifically for defense applications. Benchmarks for similar complex system development contracts can vary widely based on scope and technology.
Small Business Impact
The data does not indicate any specific set-aside for small businesses. Large prime contractors like Lockheed Martin often subcontract portions of their work, which could provide opportunities for small businesses.
Oversight & Accountability
The Department of Defense, through the Defense Microelectronics Activity, is overseeing this contract. Robust oversight will be crucial to manage costs and ensure successful delivery of the combat system.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Microelectronics Activity Programs
Risk Flags
- Cost Plus Fixed Fee contract type.
- Long contract duration.
- Complexity of integrating advanced combat systems.
- Potential for technological obsolescence.
- Reliance on a single large prime contractor.
Tags
engineering-services, department-of-defense, ny, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $31.8 million to LOCKHEED MARTIN CORPORATION. THIS TASK IS FOR ENGINEERING SERVICES TO ANALYZE, DESIGN, DEVELOP, PROTOTYPE, BUILD, INTEGRATE, TEST, AND DELIVER BUILDS OF A VESSEL COMBAT SYSTEM
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 $31.8 million.
What is the period of performance?
Start: 2023-08-01. End: 2026-08-31.
What is the estimated total cost of the vessel combat system development, considering the Cost Plus Fixed Fee structure?
The current award is $31.8 million, but the Cost Plus Fixed Fee (CPFF) structure means the final cost can fluctuate based on actual expenses incurred during development. The government will pay the negotiated fixed fee plus allowable costs. Effective oversight is critical to manage potential cost increases and ensure the project stays within reasonable financial bounds.
What are the primary risks associated with the long-term development of a vessel combat system under this contract?
Key risks include technological obsolescence, as advancements in combat systems can occur rapidly over a three-year development cycle. There's also a risk of scope creep, where additional requirements are added, increasing costs and timelines. Furthermore, integration challenges with existing naval platforms and potential supply chain disruptions for specialized components pose significant threats to successful and timely delivery.
How will the effectiveness of the delivered vessel combat system be measured and validated?
Effectiveness will likely be measured through rigorous testing and evaluation phases, including system integration tests, performance trials, and operational assessments. The system must meet defined performance metrics and operational requirements outlined in the contract. Successful validation will involve demonstrating its capability to perform its intended functions reliably under various operational scenarios and environmental conditions.
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: $45,144,168
Exercised Options: $45,144,168
Current Obligation: $31,764,797
Subaward Activity
Number of Subawards: 35
Total Subaward Amount: $4,938,620
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: 2023-08-01
Current End Date: 2026-08-31
Potential End Date: 2026-08-31 00:00:00
Last Modified: 2025-12-10
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