DoD awards $17M for Aerial Dragnet R&D to Lockheed Martin, raising value-for-money questions

Contract Overview

Contract Amount: $17,066,589 ($17.1M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2017-05-03

End Date: 2021-09-30

Contract Duration: 1,611 days

Daily Burn Rate: $10.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 11

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: IGF::OT::IGF CONTRACT AWARD FOR THE AERIAL DRAGNET PROGRAM.

Place of Performance

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

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $17.1 million to LOCKHEED MARTIN CORPORATION for work described as: IGF::OT::IGF CONTRACT AWARD FOR THE AERIAL DRAGNET PROGRAM. Key points: 1. Contract awarded via full and open competition, suggesting a competitive process. 2. Research and Development focus in physical sciences, with potential for technological advancement. 3. Contract duration of 1611 days indicates a long-term commitment to the project. 4. Awarded to a single, large defense contractor, potentially limiting broader industry engagement. 5. Cost Plus Fixed Fee pricing structure can incentivize cost overruns if not closely monitored. 6. Performance context is within the Department of Defense, implying national security implications.

Value Assessment

Rating: questionable

The contract's value-for-money is questionable given the Cost Plus Fixed Fee (CPFF) structure, which can lead to cost overruns if not managed stringently. Benchmarking against similar R&D contracts in the physical sciences is difficult without more specific project details. However, the award amount of over $17 million for a nearly four-year R&D effort suggests a significant investment. The lack of detailed performance metrics in the provided data makes a definitive assessment of value challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The presence of 10 offers suggests a healthy level of competition for this R&D effort. A competitive process like this generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers, as it likely resulted in a more efficient use of funds compared to a sole-source procurement.

Public Impact

The primary beneficiary is the Department of Defense, which will receive advancements in aerial technology. The services delivered are research and development in physical sciences, aiming to enhance defense capabilities. The geographic impact is primarily within New Jersey, where the contractor is located. Workforce implications may include specialized R&D roles within Lockheed Martin and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type carries inherent risk of cost escalation.
Long contract duration (1611 days) requires sustained oversight to ensure project stays on track.
Limited information on specific deliverables makes it hard to assess progress and final value.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
Multiple offers (10) suggest significant interest and a competitive market for this type of R&D.
Contractor is a well-established defense entity with a track record in complex R&D projects.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical sciences. The market for defense-related R&D is substantial, driven by continuous technological evolution and national security needs. Comparable spending benchmarks would typically involve other large-scale R&D efforts within the DoD, often in the tens to hundreds of millions of dollars, depending on the scope and complexity.

Small Business Impact

The data indicates this contract was not set aside for small businesses (sb: false). As a large prime contractor award, there may be opportunities for small businesses to participate as subcontractors. However, without specific subcontracting plans or data, the direct impact on the small business ecosystem is unclear. Further analysis would be needed to determine if small business participation goals were established or met.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor compliance with terms and conditions. Accountability measures are inherent in the CPFF structure, requiring detailed reporting and justification of costs. Transparency is facilitated through contract award databases, but detailed project progress and spending breakdowns may be less publicly accessible due to national security considerations.

Related Government Programs

Department of Defense Research and Development Programs
Aerial Systems Development
Advanced Technology Research Contracts
Lockheed Martin Corporation Contracts

Risk Flags

Cost Plus Fixed Fee contract type
Long contract duration
Limited public information on program specifics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.1 million to LOCKHEED MARTIN CORPORATION. IGF::OT::IGF CONTRACT AWARD FOR THE AERIAL DRAGNET 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 $17.1 million.

What is the period of performance?

Start: 2017-05-03. End: 2021-09-30.

What is the specific nature of the 'Aerial Dragnet Program' and its intended capabilities?

The provided data does not specify the exact nature or intended capabilities of the 'Aerial Dragnet Program.' However, given the contract's classification under 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)' and the awarding agency being the Department of Defense, it can be inferred that the program likely involves the development of advanced aerial systems or technologies. This could range from surveillance and reconnaissance platforms to electronic warfare systems or novel drone technologies. The term 'Dragnet' suggests a capability related to detection, capture, or containment, possibly in an aerial domain. Further details would require access to program-specific documentation or public disclosures from the DoD.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other R&D contract types used by the DoD?

The Cost Plus Fixed Fee (CPFF) structure is a common, albeit complex, contract type used by the Department of Defense (DoD) for research and development (R&D) efforts, particularly when the scope of work is not precisely defined or is expected to evolve. In a CPFF contract, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This contrasts with other R&D contract types such as Firm-Fixed-Price (FFP), which offers the government price certainty but can be risky for contractors if costs escalate unexpectedly, or Cost Plus Incentive Fee (CPIF), which includes incentives for the contractor to meet or exceed certain performance targets, potentially leading to cost savings. While CPFF provides flexibility for evolving R&D, it carries a higher risk of cost overruns for the government if not rigorously managed and overseen, as the contractor has less financial incentive to control costs compared to FFP or CPIF.

What is Lockheed Martin Corporation's track record with similar R&D contracts for the Department of Defense?

Lockheed Martin Corporation is a major defense contractor with an extensive track record of performing large-scale research and development (R&D) contracts for the Department of Defense (DoD). They are consistently among the top recipients of DoD contract awards, particularly in areas like aerospace, advanced technologies, and weapon systems. Their portfolio includes numerous complex R&D programs spanning decades, covering areas such as fighter aircraft development (e.g., F-35), missile systems, satellite technology, and advanced simulation and training systems. While specific details of past performance on programs directly analogous to the 'Aerial Dragnet Program' are not provided here, Lockheed Martin's overall history indicates significant experience and capability in executing complex, high-value R&D initiatives for the DoD. Their performance on such contracts is generally characterized by technological innovation, though like any large contractor, they may have faced challenges related to cost, schedule, or technical performance on specific projects.

What are the potential risks associated with a long-duration R&D contract like this one?

Long-duration R&D contracts, such as this 1611-day (approximately 4.4 years) award, present several potential risks. Firstly, the technological landscape can shift significantly over such a period, potentially rendering the initial research objectives obsolete or less relevant by the time the contract concludes. Secondly, maintaining consistent oversight and stakeholder engagement over an extended timeframe can be challenging, increasing the risk of scope creep or deviations from the original intent without timely detection. Thirdly, cost estimation becomes more uncertain over longer periods due to potential inflation, changes in labor rates, and unforeseen technical hurdles. Finally, there's a risk of contractor 'fatigue' or shifting priorities within the performing organization, which could impact the dedication and effectiveness of the R&D effort. Effective risk mitigation requires robust program management, regular reviews, and flexibility to adapt to evolving requirements and technological advancements.

How does the number of bidders (10) influence the potential value for money achieved in this contract?

A relatively high number of bidders, such as the 10 offers received for this contract, generally indicates a healthy competitive environment. This level of competition typically strengthens the government's position in negotiating terms and pricing, potentially leading to better value for money. When multiple capable contractors vie for a contract, they are incentivized to offer competitive pricing and innovative solutions to win the award. This reduces the likelihood of the government overpaying for the goods or services. Furthermore, a competitive process helps in price discovery, providing the government with a clearer understanding of fair market value for the R&D effort. While the CPFF structure itself introduces cost risks, the competitive initial award is a positive indicator for achieving better overall value compared to a sole-source or low-competition scenario.

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: 11

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, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $17,081,423

Exercised Options: $17,081,423

Current Obligation: $17,066,589

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $854,669

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline