DoD awards $21.3M to Lockheed Martin for REACT program, a 2014 R&D contract with a 2021 end date

Contract Overview

Contract Amount: $21,265,686 ($21.3M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2014-06-02

End Date: 2021-03-31

Contract Duration: 2,494 days

Daily Burn Rate: $8.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 102

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: CONTRACT AWARD FOR THE RETROACTIVE ARRAY FOR COHERENT TRANSMISSION (REACT) PROGRAM.

Place of Performance

Location: CHERRY HILL, CAMDEN County, NEW JERSEY, 08002

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $21.3 million to LOCKHEED MARTIN CORPORATION for work described as: CONTRACT AWARD FOR THE RETROACTIVE ARRAY FOR COHERENT TRANSMISSION (REACT) PROGRAM. Key points: 1. Contract awarded for research and development in physical, engineering, and life sciences. 2. The contract was competed on a full and open basis. 3. Awarded as a Cost Plus Fixed Fee type, indicating potential for cost overruns. 4. The contract duration was significantly extended from its initial award. 5. The contractor, Lockheed Martin, is a major defense contractor with extensive experience. 6. The contract falls under the R&D sector, focusing on advanced transmission technologies.

Value Assessment

Rating: fair

The contract value of $21.3 million for a research and development project is within a typical range for advanced technology development. However, the extended duration and Cost Plus Fixed Fee structure warrant scrutiny regarding cost control and efficiency. Benchmarking against similar R&D contracts for advanced transmission systems would provide a clearer picture of value for money, but such specific data is not readily available. The fixed fee component suggests a defined profit margin for the contractor, but the overall cost efficiency is contingent on effective management of the variable cost elements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, suggesting that multiple bidders had the opportunity to submit proposals. The presence of 102 offers indicates a robust competitive environment at the time of award. A high number of bidders generally leads to better price discovery and can drive down costs for the government. The specific details of the evaluation process and the number of proposals that advanced beyond initial screening are not provided, but the initial competition level is a positive indicator.

Taxpayer Impact: The full and open competition likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition award. This process ensures that the government explores a wide range of solutions and capabilities, maximizing the potential for innovation and cost-effectiveness.

Public Impact

The Department of Defense is the primary beneficiary, receiving advanced transmission technology research. The contract supports research and development in physical, engineering, and life sciences. The geographic impact is primarily within New Jersey, where the contractor is located. The contract likely involves highly skilled engineers and researchers, contributing to the specialized workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Extended contract duration raises questions about initial planning and potential scope creep.
Cost Plus Fixed Fee contract type can incentivize higher spending if not managed tightly.
Lack of specific performance metrics makes it difficult to assess R&D success.
The significant time lag between award and completion suggests potential delays or evolving requirements.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process.
Lockheed Martin is a reputable contractor with extensive experience in defense R&D.
The contract addresses a specific technological need within the Department of Defense.
The fixed fee component provides a degree of cost certainty for contractor profit.

Sector Analysis

The contract falls within the Research and Development (R&D) sector, specifically NAICS code 541712. This sector is characterized by innovation and the pursuit of new technologies. The market for defense R&D is substantial, with significant government investment aimed at maintaining technological superiority. Comparable spending benchmarks for advanced transmission R&D are difficult to ascertain without more specific technical details, but the overall R&D spending by the DoD is in the tens of billions annually.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. There is no information provided regarding subcontracting plans or their impact on the small business ecosystem. Given the nature of the contractor and the R&D focus, it is less likely that significant subcontracting opportunities for small businesses would be a primary feature, though not impossible for specialized components or services.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The contract type (Cost Plus Fixed Fee) necessitates close monitoring of costs and progress. Transparency is generally maintained through contract reporting requirements, but specific public access to detailed progress reports or cost breakdowns may be limited. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Research and Development Programs
Advanced Communications Technology Initiatives
Lockheed Martin Defense Contracts
Cost Plus Fixed Fee Contracts

Risk Flags

Extended contract duration
Cost Plus Fixed Fee contract type
Long R&D cycle

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.3 million to LOCKHEED MARTIN CORPORATION. CONTRACT AWARD FOR THE RETROACTIVE ARRAY FOR COHERENT TRANSMISSION (REACT) PROGRAM.

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 Contract Management Agency).

What is the total obligated amount?

The obligated amount is $21.3 million.

What is the period of performance?

Start: 2014-06-02. End: 2021-03-31.

What was the specific technological objective of the REACT program, and how did Lockheed Martin's proposal address it?

The provided data does not detail the specific technological objectives of the REACT (Retroactive Array for Coherent Transmission) program. However, the contract's classification under NAICS 541712 (Research and Development in the Physical, Engineering, and Life Sciences) suggests a focus on developing novel physical or engineering principles for advanced transmission systems. Lockheed Martin, as a major defense contractor, likely proposed a research plan involving theoretical modeling, simulation, and potentially prototype development to achieve these objectives. Without access to the original solicitation and proposal documents, the precise technical approach and its alignment with program goals remain unspecified.

How does the $21.3 million award compare to other R&D contracts for similar advanced transmission technologies?

Directly comparing the $21.3 million award for the REACT program to similar R&D contracts is challenging without more granular data on the specific technologies involved and the scope of work. However, R&D contracts within the defense sector can range from a few million to hundreds of millions of dollars, depending on the complexity, maturity, and strategic importance of the technology. Contracts for advanced materials, signal processing, or novel communication systems often fall into this value range. The fact that this was a full and open competition with 102 offers suggests that the perceived value and potential of the technology attracted significant industry interest, implying the award amount was competitive within its niche.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D, and how were they mitigated?

The primary risk with a CPFF contract for R&D is that the government bears the cost risk, while the contractor is assured a fixed profit. This can incentivize the contractor to incur higher costs than necessary, as their profit margin is fixed regardless of the final cost. For R&D, where outcomes are inherently uncertain, this structure can lead to cost overruns if not managed diligently. Mitigation strategies typically involve robust government oversight, detailed cost tracking, performance metrics tied to milestones, and clear definition of the 'fixed fee' and 'cost' elements. The extended duration of this contract (2494 days) suggests that effective cost control and scope management were critical throughout its lifecycle.

Given the contract's award in 2014 and completion in 2021, what does this suggest about the program's effectiveness and the contractor's performance?

The extended period from 2014 to 2021 (approximately 7 years) for a contract initially awarded suggests several possibilities regarding program effectiveness and contractor performance. It could indicate that the R&D objectives were complex and required a longer development cycle than initially anticipated. Alternatively, it might point to scope changes, unforeseen technical challenges, or potential inefficiencies in project management by either the contractor or the government. Without specific performance reviews or milestone achievements, it's difficult to definitively assess effectiveness. However, a lengthy R&D cycle is not uncommon for cutting-edge defense technologies, and Lockheed Martin's continued engagement suggests they were able to meet evolving requirements or overcome hurdles.

How has spending on R&D contracts like REACT evolved within the Department of Defense since 2014?

Defense spending on R&D has generally remained a significant priority for the Department of Defense, although specific allocations can fluctuate based on strategic priorities and budget cycles. Since 2014, the DoD has continued to invest heavily in areas such as artificial intelligence, cyber warfare, hypersonics, and advanced materials, all of which fall under the broad R&D umbrella. While the exact figures for R&D spending vary year to year, the overall trend has been towards maintaining or increasing investment in these critical technological areas to counter evolving threats. Contracts like REACT, focusing on fundamental transmission technologies, are part of this broader effort to ensure technological superiority.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Offers Received: 102

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 3 EXECUTIVE CAMPUS, CHERRY HILL, NJ, 08002

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: $27,552,893

Exercised Options: $21,311,661

Current Obligation: $21,265,686

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $411,005

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline