DoD's $61.7M Blackjack Satellite Integration contract awarded to Lockheed Martin shows strong competition
Contract Overview
Contract Amount: $61,666,169 ($61.7M)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2020-02-26
End Date: 2024-01-31
Contract Duration: 1,435 days
Daily Burn Rate: $43.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 7
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: BLACKJACK SATELLITE INTEGRATION
Place of Performance
Location: SUNNYVALE, SANTA CLARA County, CALIFORNIA, 94089
Plain-Language Summary
Department of Defense obligated $61.7 million to LOCKHEED MARTIN CORP for work described as: BLACKJACK SATELLITE INTEGRATION Key points: 1. The contract value of $61.7 million represents a significant investment in advanced satellite technology. 2. Awarded to a single, large defense contractor, this suggests a focus on specialized capabilities. 3. The 'definitive contract' type indicates a long-term commitment to the project. 4. The contract duration of over 3 years points to a substantial development or integration effort. 5. The 'Research and Development' NAICS code highlights the innovative nature of the work. 6. The presence of 7 bidders indicates a healthy level of interest and competition for this specialized R&D effort.
Value Assessment
Rating: good
Benchmarking the value of this $61.7 million contract is challenging without specific performance metrics or comparable project data. However, the presence of 7 bidders suggests that the pricing was competitive within the market for advanced satellite integration and R&D. The cost-plus-fixed-fee (CPFF) contract type allows for flexibility in research and development while providing the contractor with a defined profit margin, which can be a reasonable approach for complex, uncertain projects.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, with 7 bids received. This indicates a robust bidding process where multiple qualified contractors had the opportunity to compete. The level of competition suggests that the agency sought the best value and technical solution available in the market, and that the pricing was likely influenced by the competitive landscape.
Taxpayer Impact: A high level of competition generally benefits taxpayers by driving down prices and encouraging innovation. For this contract, it suggests that the government likely secured a competitive price for the satellite integration services.
Public Impact
The Department of Defense benefits through the advancement of its satellite capabilities. This contract supports the development and integration of advanced satellite technologies for national security purposes. The primary geographic impact is likely within California, where the contractor is located. The contract supports highly skilled jobs in the aerospace and defense sector, particularly in R&D and engineering roles.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee contracts can sometimes lead to cost overruns if not carefully managed.
- The long contract duration may present risks if technology or requirements change significantly.
- Reliance on a single large contractor could limit future flexibility or innovation from smaller players.
Positive Signals
- Full and open competition ensures a broad range of potential solutions are considered.
- The award to Lockheed Martin, a major defense contractor, suggests a high likelihood of technical success.
- The R&D focus indicates investment in cutting-edge technology.
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on satellite technology and research and development. The market for satellite integration and R&D is highly specialized, characterized by significant technological complexity and substantial government investment. Comparable spending benchmarks would typically be found within other advanced R&D contracts for space systems or defense electronics.
Small Business Impact
This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. The award to a large prime contractor like Lockheed Martin suggests that the primary focus is on leveraging established large-scale capabilities rather than fostering small business participation directly through this specific award.
Oversight & Accountability
Oversight for this contract would typically be managed by the Department of Defense, likely through the Defense Contract Management Agency (DCMA) and the contracting officer's representative (COR). The cost-plus-fixed-fee structure necessitates close monitoring of costs and performance to ensure adherence to the contract terms and prevent cost overruns. Transparency is generally maintained through contract reporting mechanisms, though specific details of ongoing oversight are not publicly detailed.
Related Government Programs
- Military Satellite Communications
- Space-Based Intelligence, Surveillance, and Reconnaissance (ISR)
- Advanced Research Projects Agency (ARPA) Initiatives
- National Security Space Programs
- Satellite Ground Systems Development
Risk Flags
- Cost-Plus-Fixed-Fee contract type requires diligent oversight to manage costs.
- Long contract duration may be subject to changing technological landscapes.
- Reliance on a single large prime contractor.
Tags
defense, department-of-defense, darpa, research-and-development, satellite-technology, lockheed-martin-corp, definitive-contract, full-and-open-competition, cost-plus-fixed-fee, california, large-contractor
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $61.7 million to LOCKHEED MARTIN CORP. BLACKJACK SATELLITE INTEGRATION
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 $61.7 million.
What is the period of performance?
Start: 2020-02-26. End: 2024-01-31.
What is Lockheed Martin's track record with similar satellite integration contracts for the DoD?
Lockheed Martin Corporation is a major defense contractor with extensive experience in satellite development, integration, and launch services for the Department of Defense and other government agencies. They have a long history of delivering complex space systems, including communication satellites, intelligence satellites, and missile warning systems. Their track record includes numerous successful programs, though like any large contractor, they have also faced challenges and scrutiny on specific projects. For contracts similar to 'Blackjack Satellite Integration,' their experience would likely encompass a wide range of technical challenges, from component integration to full system testing and deployment, often involving advanced technologies and stringent performance requirements.
How does the $61.7 million value compare to other DoD satellite integration contracts?
The $61.7 million value for the 'Blackjack Satellite Integration' contract is moderate within the context of large-scale satellite programs. Major satellite acquisition programs, especially those involving new constellations or highly advanced capabilities, can easily run into hundreds of millions or even billions of dollars. However, for specific integration efforts, research and development phases, or specialized component development for existing platforms, $61.7 million represents a significant but not exceptionally large investment. It suggests a focused effort on a particular aspect of satellite technology or a specific project phase, rather than the complete procurement of a new satellite system.
What are the primary risks associated with this type of R&D contract?
The primary risks associated with this Research and Development (R&D) contract, particularly a Cost Plus Fixed Fee (CPFF) type, include technical uncertainty, schedule delays, and potential cost growth. R&D inherently involves exploring unknown technical challenges, which can lead to unforeseen difficulties and require more resources or time than initially estimated. The CPFF structure, while providing a fixed profit, still requires careful management to control the overall cost base. Furthermore, the rapid evolution of satellite technology means that requirements could change mid-contract, necessitating costly adjustments. Contractor performance and the ability to integrate complex systems from various sources also pose inherent risks.
How effective is the 'full and open competition' strategy for acquiring advanced satellite technology?
The 'full and open competition' strategy is generally considered highly effective for acquiring advanced satellite technology as it maximizes the pool of potential offerors, encouraging a wider range of innovative solutions and potentially leading to better pricing. By allowing all responsible sources to submit bids, the government can identify the most capable contractors and the most advantageous technical approaches. This approach fosters a competitive environment that can drive down costs and spur technological advancements. The fact that 7 bids were received for this contract indicates that the strategy was successful in attracting significant industry interest, suggesting a robust market for this type of R&D.
What is the historical spending trend for satellite integration R&D by DARPA?
The Defense Advanced Research Projects Agency (DARPA) historically invests heavily in cutting-edge research and development across various domains, including satellite technology. Their spending on satellite integration R&D is characterized by a focus on high-risk, high-reward projects aimed at developing breakthrough capabilities. While specific historical spending figures for 'satellite integration R&D' by DARPA would require detailed analysis of their budget allocations over time, it is known that DARPA consistently funds projects that push the boundaries of space technology, often leading to advancements adopted by military services. Their approach typically involves shorter-term, project-based funding rather than long-term sustainment contracts.
What are the implications of the 'definitive contract' award type for long-term program stability?
A 'definitive contract' is a fixed-price contract that represents a firm commitment by the government to purchase a specified quantity of supplies or services at a fixed price. For a program like satellite integration, awarding a definitive contract suggests a clear understanding of the scope of work and a commitment to completing the project. This award type provides a degree of stability and predictability for both the government and the contractor, as it locks in the terms of the agreement. It implies that the project is beyond the conceptual or initial R&D phase and is moving towards a more defined production or integration outcome, offering assurance of continued effort and funding within the agreed-upon parameters.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: HR001119S0015
Offers Received: 7
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corporation
Address: 1111 LOCKHEED MARTIN WAY, SUNNYVALE, CA, 94089
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $118,523,855
Exercised Options: $66,387,233
Current Obligation: $61,666,169
Actual Outlays: $2,642,514
Subaward Activity
Number of Subawards: 48
Total Subaward Amount: $13,976,182
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2020-02-26
Current End Date: 2024-01-31
Potential End Date: 2024-12-22 00:00:00
Last Modified: 2024-03-12
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