DoD's $20.6M Aero-Adaptive Beam Control R&D contract awarded to Lockheed Martin without competition

Contract Overview

Contract Amount: $20,622,401 ($20.6M)

Contractor: Lockheed Martin Corp

Awarding Agency: Department of Defense

Start Date: 2008-05-07

End Date: 2012-05-31

Contract Duration: 1,485 days

Daily Burn Rate: $13.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: AERO-ADAPTIVE/AERO-OPTIC BEAM CONTROL (ABC) RESEARCH AND DEVELOPMENT (PHASE 1A - BASE, PHASE 1B - OPTION 1, PHASE 2 - OPTION 2)

Place of Performance

Location: SUNNYVALE, SANTA CLARA County, CALIFORNIA, 94089

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $20.6 million to LOCKHEED MARTIN CORP for work described as: AERO-ADAPTIVE/AERO-OPTIC BEAM CONTROL (ABC) RESEARCH AND DEVELOPMENT (PHASE 1A - BASE, PHASE 1B - OPTION 1, PHASE 2 - OPTION 2) Key points: 1. Contract awarded to a single, large defense contractor, raising questions about competitive pricing. 2. Research and Development in physical sciences, a high-risk, high-reward area for innovation. 3. Long contract duration of nearly 5 years suggests a complex, multi-stage project. 4. Cost-Plus-Fixed-Fee contract type may incentivize cost overruns. 5. Focus on beam control technology indicates potential applications in advanced defense systems. 6. No small business participation noted, potentially limiting broader economic impact.

Value Assessment

Rating: questionable

The contract's value of $20.6 million for R&D over nearly five years is difficult to benchmark without specific technical details and comparable projects. However, the Cost-Plus-Fixed-Fee (CPFF) pricing structure, while common for R&D, can lead to higher final costs compared to fixed-price contracts if not managed closely. The lack of competition further complicates a value assessment, as there was no market pressure to drive down costs. Without more granular data on the specific research outcomes and the contractor's efficiency, it's challenging to definitively assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor, Lockheed Martin Corp, was solicited. This approach bypasses the standard competitive bidding process. While sole-source awards can be justified for unique capabilities or urgent needs, they limit the government's ability to explore alternative solutions and potentially secure better pricing through competition. The absence of multiple bidders means there's no direct comparison of technical approaches or cost proposals to evaluate.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as the government does not benefit from the price discovery mechanisms inherent in a competitive procurement process.

Public Impact

The primary beneficiary is the Department of Defense, which stands to gain advancements in beam control technology for potential future defense applications. The contract supports research and development activities, aiming to push the boundaries of physical and engineering sciences. The geographic impact is primarily within California, where Lockheed Martin Corp is headquartered and likely where the R&D activities will be conducted. The contract supports a highly specialized workforce within Lockheed Martin, including scientists and engineers focused on advanced optics and control systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential taxpayer savings.
Cost-Plus-Fixed-Fee contract type carries inherent risk of cost overruns.
Long contract duration may indicate project complexity or potential for scope creep.
Lack of transparency regarding the justification for sole-source award.

Positive Signals

Award to a major defense contractor suggests access to significant technical expertise.
Focus on R&D aligns with strategic goals for technological advancement.
Definitive contract structure provides a framework for a multi-year research effort.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical sciences and engineering. The market for advanced beam control technology is highly specialized, dominated by large aerospace and defense contractors. Spending in this area is driven by national security imperatives and the pursuit of technological superiority. Comparable spending benchmarks are difficult to establish due to the proprietary nature of R&D and the unique specifications of such projects. However, the Department of Defense is a significant investor in R&D, with substantial budgets allocated to innovation in areas like directed energy and advanced sensing.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the contractor, Lockheed Martin Corp, is a large aerospace and defense company. There is no information provided regarding subcontracting plans for small businesses. Consequently, this contract is unlikely to have a direct positive impact on the small business ecosystem; instead, it represents a direct award to a prime contractor that may or may not engage small businesses in its supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Advanced Research Projects Agency (DARPA) and potentially the Department of Defense's Inspector General. Given the R&D nature and CPFF structure, oversight would likely focus on tracking research progress, managing costs, and ensuring adherence to the contract's technical objectives. Transparency is often limited in sole-source R&D contracts due to the sensitive or proprietary nature of the research, but periodic reporting requirements would be in place.

Related Government Programs

Advanced Directed Energy Research
Aerospace Technology Development
Optics and Photonics Research
Defense Science and Technology Programs
Lockheed Martin Research and Development Contracts

Risk Flags

Sole-source award
Cost-Plus-Fixed-Fee contract type
Long contract duration
Lack of small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.6 million to LOCKHEED MARTIN CORP. AERO-ADAPTIVE/AERO-OPTIC BEAM CONTROL (ABC) RESEARCH AND DEVELOPMENT (PHASE 1A - BASE, PHASE 1B - OPTION 1, PHASE 2 - OPTION 2)

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Advanced Research Projects Agency).

What is the total obligated amount?

The obligated amount is $20.6 million.

What is the period of performance?

Start: 2008-05-07. End: 2012-05-31.

What was the specific justification for awarding this contract on a sole-source basis to Lockheed Martin Corp?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source procurements are justified when only one responsible source is capable of providing the required supply or service, or when there is a compelling urgency. For R&D contracts, this could stem from unique intellectual property, highly specialized facilities, or a critical need for a specific contractor's expertise that cannot be replicated or developed in time through competition. Without access to the Justification and Approval (J&A) document, the precise rationale remains unknown, making it difficult to assess if the sole-source decision was appropriate and in the government's best interest.

How does the Cost-Plus-Fixed-Fee (CPFF) contract type potentially impact the final cost compared to other contract types for R&D?

The Cost-Plus-Fixed-Fee (CPFF) contract type reimburses the contractor for allowable costs incurred plus a predetermined fixed fee representing profit. While common for R&D where the scope and final costs are uncertain, it can incentivize contractors to incur higher costs, as their fee (profit) is a fixed percentage of those costs. This contrasts with fixed-price contracts, where the contractor bears more risk and has a greater incentive to control costs to maximize profit. For taxpayers, CPFF contracts can potentially lead to higher final expenditures if cost controls are not rigorously enforced by the government. However, it allows for flexibility in R&D projects where innovation and exploration are paramount.

What are the potential risks associated with a nearly 5-year duration for this R&D contract?

A contract duration of approximately 1485 days (nearly 5 years) for R&D presents several potential risks. Firstly, the scope of work may evolve significantly over such a long period, potentially leading to scope creep or the need for costly contract modifications. Secondly, technological advancements in the field could render the initial research objectives obsolete before the contract concludes. Thirdly, maintaining consistent oversight and engagement from the government contracting team over an extended period can be challenging due to personnel turnover. Finally, the longer the contract, the greater the potential for cost increases due to inflation or unforeseen technical hurdles, especially with a CPFF structure.

What are the implications of 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)' for the contract's objectives?

The classification 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)' indicates that this contract focuses on fundamental scientific inquiry and applied engineering solutions within these broad domains. This suggests the project likely involves theoretical work, experimentation, prototyping, and analysis related to physical phenomena, engineering principles, or biological processes (excluding biotech). For beam control technology, this could encompass areas like advanced optics, materials science, control systems engineering, or physics-based modeling. The 'except Biotechnology' clause clarifies that the research is not centered on biological organisms or processes for therapeutic or diagnostic purposes.

How does the lack of small business participation impact the broader defense innovation ecosystem?

The absence of small business participation, as indicated by 'sb': false, means that opportunities for innovation, agility, and specialized expertise often found in smaller firms are not being leveraged through this specific contract. While large contractors like Lockheed Martin are crucial for large-scale programs, a sole-source award to a prime without mandated small business subcontracting can limit the infusion of new ideas and technologies from the broader small business innovation ecosystem. This can potentially stifle competition in the long run and reduce the pipeline of emerging defense technology companies that could become future prime contractors or key suppliers.

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 › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1111 LOCKHEED MARTIN WAY BLDG 157, SUNNYVALE, CA, 94089

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $20,834,234

Exercised Options: $20,834,234

Current Obligation: $20,622,401

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline