Lockheed Martin awarded $40M for AN/TPS-59 Radar System, with contract duration exceeding 6 years

Contract Overview

Contract Amount: $39,995,529 ($40.0M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2000-03-15

End Date: 2006-10-30

Contract Duration: 2,420 days

Daily Burn Rate: $16.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200006!1700!000218!F9999 !MARINE CORPS SYSTEMS COMMAND !M6785400C2008 !A!*!* !20000315!20010314!130956345!787662220!834951691!N!D3538!LOCKHEED MARTIN CORPORATION !ELECTRONICS PARKWAY BLDG 7!SYRACUSE !NY!13221!73000!067!36!SYRACUSE !ONONDAGA !NEW YORK !0001!+000001470000!N!N!000000000000!5840!RADAR EQUIPMENT, EXCEPT AIRBORNE !A2 !MISSILE AND SPACE SYSTEMS !2GQD!AN/TPS-59 RADAR SYS !3669!3!*!*!*!B!A!*!D !N!U!1!001!N!1A!A!Y!Z!* !* !N!C!*!A!A!A!A!A!A!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: LIVERPOOL, ONONDAGA County, NEW YORK, 13088

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $40.0 million to LOCKHEED MARTIN CORPORATION for work described as: 200006!1700!000218!F9999 !MARINE CORPS SYSTEMS COMMAND !M6785400C2008 !A!*!* !20000315!20010314!130956345!787662220!834951691!N!D3538!LOCKHEED MARTIN CORPORATION !ELECTRONICS PARKWAY BLDG 7!SYRACUSE !NY!13221!73000!067!36!SYRACUSE !ONO… Key points: 1. Contract value of $40M for radar systems suggests a significant investment in defense technology. 2. The sole-source nature of this award warrants scrutiny regarding potential price inflation and limited market engagement. 3. A contract duration of over 6 years indicates a long-term need for the specified radar equipment. 4. The award to Lockheed Martin, a major defense contractor, positions this within the established defense industrial base. 5. The 'Radar Equipment, Except Airborne' classification points to ground-based or ship-based radar systems, crucial for surveillance and targeting. 6. The 'Cost Plus Fixed Fee' contract type can lead to cost overruns if not managed tightly.

Value Assessment

Rating: fair

The contract value of approximately $40 million for the AN/TPS-59 Radar System appears substantial. Benchmarking against similar radar system procurements is difficult without more specific technical details and market data. However, the 'Cost Plus Fixed Fee' (CPFF) contract type, while offering flexibility, can sometimes lead to higher final costs compared to fixed-price contracts if cost controls are not rigorously enforced. The absence of competitive bidding further complicates a direct value-for-money assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Lockheed Martin Corporation, was solicited. This typically occurs when a specific capability is unique or when there are compelling reasons to award to a particular contractor, such as follow-on work or proprietary technology. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices or spurred innovation from multiple vendors.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as there is no competitive pressure to ensure the most economical price. It also limits opportunities for other businesses to compete for this defense spending.

Public Impact

The U.S. Marine Corps is the primary beneficiary, receiving advanced radar systems for operational readiness. The contract delivers critical electronic equipment, specifically the AN/TPS-59 Radar System, essential for defense operations. The geographic impact is primarily within the United States, with potential deployment to various operational theaters. This contract supports high-skilled jobs within Lockheed Martin's defense electronics sector, particularly in Syracuse, NY.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Cost Plus Fixed Fee contract type carries inherent risks of cost escalation if not closely monitored.
Long contract duration (over 6 years) increases exposure to potential scope creep or changing technological requirements.
Lack of transparency in the sole-source justification could mask underlying issues.
Limited visibility into the specific performance metrics and success criteria for the radar system.

Positive Signals

Award to a reputable defense contractor, Lockheed Martin, suggests a level of expected quality and reliability.
The AN/TPS-59 is a known radar system, implying a degree of maturity and established operational use.
The contract addresses a clear defense need for radar equipment, contributing to national security.
The fixed fee component of the CPFF contract provides some level of cost certainty for the government.
The contract is managed by the Defense Contract Management Agency, indicating established oversight processes.

Sector Analysis

The defense electronics sector is characterized by high barriers to entry, significant R&D investment, and long product lifecycles. Lockheed Martin is a dominant player in this market. Spending on radar systems is a critical component of defense budgets, supporting surveillance, early warning, and targeting capabilities. This contract fits within the broader category of electronic warfare and command and control systems, where spending can reach billions annually across various government agencies.

Small Business Impact

There is no indication of small business set-asides or subcontracting plans in the provided data. As a sole-source award to a large prime contractor, the direct impact on small businesses is likely minimal unless Lockheed Martin voluntarily includes them in its supply chain. Further investigation into subcontracting opportunities would be necessary to assess the broader impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The 'Cost Plus Fixed Fee' structure necessitates rigorous financial oversight to control costs. Transparency regarding the justification for the sole-source award and ongoing performance reports would be key indicators of accountability.

Related Government Programs

AN/TPS Radar Systems
Ground-Based Air Defense Systems
Defense Electronics Procurement
Marine Corps Systems Command Contracts
Lockheed Martin Defense Contracts

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Long contract duration
Lack of competitive bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.0 million to LOCKHEED MARTIN CORPORATION. 200006!1700!000218!F9999 !MARINE CORPS SYSTEMS COMMAND !M6785400C2008 !A!*!* !20000315!20010314!130956345!787662220!834951691!N!D3538!LOCKHEED MARTIN CORPORATION !ELECTRONICS PARKWAY BLDG 7!SYRACUSE !NY!13221!73000!067!36!SYRACUSE !ONONDAGA !NEW YORK !0001!+000001470000!N!N!000000000000!5840!RADAR EQUIPMENT, EXCEPT AIRBORNE !A2 !MISSILE AND SPACE SYSTEMS !2GQD!AN/TPS-59 RADAR SYS !3669!3!*!*!*!B!A!*!D !N!U!

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 $40.0 million.

What is the period of performance?

Start: 2000-03-15. End: 2006-10-30.

What is the specific technical capability and operational role of the AN/TPS-59 Radar System?

The AN/TPS-59 is a mobile, 3D, medium-power air-defense radar system designed for early warning and surveillance. It is capable of detecting and tracking a wide range of airborne targets, including aircraft and missiles, at significant ranges. Its primary role is to provide situational awareness to command and control elements, enabling timely defensive responses. The system is known for its mobility, allowing it to be deployed rapidly to support ground forces or protect critical assets. Its specific technical specifications, such as frequency band, power output, and tracking resolution, would determine its effectiveness against various threats.

How does the 'Cost Plus Fixed Fee' (CPFF) contract type compare to other contract types in terms of risk and value for this type of procurement?

The CPFF contract type is often used for research and development or complex systems where costs are uncertain. It reimburses the contractor for allowable costs plus a fixed fee representing profit. While it allows for flexibility and encourages innovation, it carries a higher risk of cost overruns for the government compared to fixed-price contracts. The government bears most of the cost risk. For a mature system like the AN/TPS-59, a fixed-price contract might have been more appropriate to incentivize cost control. The value is realized if the system meets all requirements and the fixed fee remains reasonable relative to the effort.

What are the historical spending patterns for the AN/TPS-59 Radar System or similar radar systems procured by the Marine Corps?

Historical spending data for the AN/TPS-59 specifically is not detailed in the provided snippet. However, radar systems are a significant and recurring procurement category within defense budgets. The Marine Corps, like other branches, invests heavily in surveillance and early warning capabilities. Annual spending on radar equipment can fluctuate based on modernization cycles, threat assessments, and specific program requirements. Without access to broader contract databases or program budget justifications, it's challenging to establish precise historical spending trends for this particular system or its direct comparators.

What is Lockheed Martin's track record with sole-source defense contracts, particularly for radar systems?

Lockheed Martin is a major defense contractor with extensive experience across various platforms, including radar systems. They have a history of both competitive and sole-source awards, often stemming from proprietary technology, unique capabilities, or being the incumbent provider for a system. Their track record with sole-source contracts is generally viewed through the lens of their overall performance and the specific justifications provided for non-competitive awards. Scrutiny often focuses on whether the sole-source justification was robust and if the pricing reflects fair market value in the absence of competition.

What are the potential risks associated with a sole-source award for a critical defense system like a radar system?

The primary risk of a sole-source award for a critical defense system is the lack of competitive pressure, which can lead to inflated prices and reduced incentives for efficiency and innovation. Taxpayers may end up paying more than necessary. Additionally, it can create vendor lock-in, making it difficult and costly to switch providers or technologies in the future. It also limits opportunities for other capable companies to enter the market or demonstrate their offerings. For critical systems, reliance on a single source can also pose a supply chain risk if that source encounters production issues.

How does the geographic location of the contractor (Syracuse, NY) influence the contract's execution and oversight?

The contractor's location in Syracuse, NY, primarily influences the logistics of contract oversight and potential site visits by government personnel. The Defense Contract Management Agency (DCMA) likely has a local office or personnel responsible for monitoring Lockheed Martin's operations in Syracuse. While the physical location doesn't inherently affect the technical execution of the radar system itself, it does mean that oversight activities, such as factory inspections or progress reviews, will be conducted at that site. It also contributes to the local economy in New York through job creation and associated spending.

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: ELECTRONICS PARKWAY BLDG 7, SYRACUSE, NY, 13221

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline