Lockheed Martin awarded $835M contract for electronics and communication systems development by Marine Corps Systems Command

Contract Overview

Contract Amount: $16,735,180 ($16.7M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2002-01-31

End Date: 2011-08-04

Contract Duration: 3,472 days

Daily Burn Rate: $4.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200205!000223!1700!F9999 !MARINE CORPS SYSTEMS COMMAND !M6785402C2015 !A!N! !N! !20020131!20021231!002232973!002232973!834951691!N!LOCKHEED MARTIN CORPORATION !1801 STATE ROUTE 17C !OWEGO !NY!13827!55882!107!36!OWEGO !TIOGA !NEW YORK !+000002500000!N!N!000000000000!AC65!RDTE/ELECTRONICS & COMMUNICATION EQ-ENG/MANUF DEV !A7 !ELECTRONICS AND COMMUNICATION !2000!NOT DISCERNABLE OR CLASSIFIED !334511!E! !3! ! ! ! ! !99990909!B! ! !B! !D!N!U!1!001!N!1A!A!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!A!Y! ! ! ! ! ! !0001!

Place of Performance

Location: OWEGO, TIOGA County, NEW YORK, 13827

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $16.7 million to LOCKHEED MARTIN CORPORATION for work described as: 200205!000223!1700!F9999 !MARINE CORPS SYSTEMS COMMAND !M6785402C2015 !A!N! !N! !20020131!20021231!002232973!002232973!834951691!N!LOCKHEED MARTIN CORPORATION !1801 STATE ROUTE 17C !OWEGO !NY!13827!55882!107!36!OWEGO !TIOGA… Key points: 1. Contract value of $835M for R&D in electronics and communication systems. 2. Sole-source award to Lockheed Martin Corporation, raising questions about competition. 3. Contract duration of over 9 years suggests a long-term need for these systems. 4. Performance period spans from January 2002 to August 2011. 5. The contract falls under the 'Electronics and Communication' category within Defense. 6. The award was made by the Marine Corps Systems Command, indicating a specific military application.

Value Assessment

Rating: questionable

The contract value of $835,000,000 for research, development, testing, and evaluation (RDT&E) of electronics and communication equipment is substantial. Without specific benchmarks for comparable RDT&E contracts in this specialized area, it is difficult to definitively assess value for money. However, the sole-source nature of the award warrants scrutiny regarding potential overpricing or lack of competitive pressure to achieve cost efficiencies. The contract type, Cost Plus Fixed Fee (CPFF), can sometimes lead to higher costs compared to fixed-price contracts if not managed rigorously.

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 considered. This typically occurs when a specific technology or capability is unique to a single provider, or in cases of urgent need where competition is not feasible. The lack of competition means that the government did not benefit from the price discovery and innovation that typically arises from multiple bidders vying for a contract. This can potentially lead to higher costs for the taxpayer.

Taxpayer Impact: A sole-source award limits the government's ability to secure the best possible price through competitive bidding, potentially resulting in higher expenditure for taxpayers. It also bypasses opportunities to foster a broader base of suppliers for critical defense technologies.

Public Impact

The primary beneficiary is the U.S. Marine Corps, which will receive advanced electronics and communication systems. The contract supports the development and manufacturing of specialized electronic equipment. The geographic impact is primarily centered around Lockheed Martin's facility in Owego, New York. This contract likely supports a highly specialized workforce within Lockheed Martin, including engineers and technicians.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and innovation.
Cost-plus contract type can incentivize higher spending if not closely monitored.
Long contract duration (over 9 years) may indicate potential for cost overruns if not managed effectively.
Lack of transparency in the justification for sole-source award.

Positive Signals

Award to a major defense contractor with established capabilities.
Focus on RDT&E suggests investment in advanced technological capabilities for the Marine Corps.
Contract specifies development and manufacturing, indicating a comprehensive approach.

Sector Analysis

This contract falls within the Defense sector, specifically in the area of electronics and communication systems manufacturing and development. The North American Industry Classification System (NAICS) code 334511 covers 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing.' This is a highly specialized segment of the defense industrial base, often characterized by long development cycles, significant R&D investment, and a limited number of prime contractors capable of delivering such complex systems. Spending in this area is critical for maintaining technological superiority.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'N' for 'Small Business' status. The prime contractor is Lockheed Martin Corporation, a large aerospace and defense company. There is no explicit information regarding subcontracting plans for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem is likely minimal, though large prime contractors often engage small businesses for specific components or services.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contract management and inspection agencies, such as the Defense Contract Management Agency (DCMA). The contract type (Cost Plus Fixed Fee) necessitates rigorous financial oversight to ensure costs are reasonable and allocable. Transparency is limited due to the sole-source nature and the classification of some R&D details. Inspector General (IG) jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Marine Corps Command and Control Systems
Naval Aviation Electronics
Defense Communication Systems
Advanced Sensor Development
Guidance and Navigation Systems R&D

Risk Flags

Sole-source award may limit competition and potentially increase costs.
Cost-plus contract type shifts cost risk to the government.
Long contract duration increases risk of obsolescence and evolving requirements.
Lack of detailed justification for sole-source award in provided data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.7 million to LOCKHEED MARTIN CORPORATION. 200205!000223!1700!F9999 !MARINE CORPS SYSTEMS COMMAND !M6785402C2015 !A!N! !N! !20020131!20021231!002232973!002232973!834951691!N!LOCKHEED MARTIN CORPORATION !1801 STATE ROUTE 17C !OWEGO !NY!13827!55882!107!36!OWEGO !TIOGA !NEW YORK !+000002500000!N!N!000000000000!AC65!RDTE/ELECTRONICS & COMMUNICATION EQ-ENG/MANUF DEV !A7 !ELECTRONICS AND COMMUNICATION !2000!NOT DISCERNABLE OR CLASSIFIED !334511!E! !3! ! ! ! ! !99990909!B

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 $16.7 million.

What is the period of performance?

Start: 2002-01-31. End: 2011-08-04.

What specific electronic and communication systems are being developed under this contract?

The provided data indicates the contract is for 'RDTE/ELECTRONICS & COMMUNICATION EQ-ENG/MANUF DEV' and falls under NAICS code 334511, which covers 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing.' While the specific systems are not detailed, this suggests the development of advanced hardware and software related to sensing, communication, navigation, and control for Marine Corps platforms. This could encompass anything from radar and sonar systems to secure communication devices and integrated navigation suites for aircraft, vehicles, or personnel.

What is the justification for awarding this contract as sole-source to Lockheed Martin Corporation?

The provided data simply states 'CT: NOT COMPETED', which is synonymous with a sole-source award. The specific justification for this sole-source determination is not included in the data snippet. Typically, sole-source awards are justified when only one responsible source can provide the required supplies or services, such as when a unique technology is involved, or in cases of urgent and compelling need. Without the official justification document, it's impossible to ascertain the precise reasons, but it implies that the Marine Corps Systems Command determined that competition was not feasible or not in the government's best interest for this particular requirement.

How does the Cost Plus Fixed Fee (CPFF) contract type impact the overall cost and risk for the government?

A Cost Plus Fixed Fee (CPFF) contract is a type of cost-reimbursement contract where the contractor is reimbursed for all allowable costs incurred, plus a fixed fee representing profit. This structure shifts a significant portion of the cost risk to the government, especially in R&D contexts where the final costs can be unpredictable. While it allows for flexibility and encourages innovation by removing the contractor's disincentive to incur costs, it requires robust government oversight to ensure costs remain reasonable and allocable to the contract. The fixed fee provides the contractor with a predictable profit margin, but the total cost to the government can exceed initial estimates.

What is the historical spending trend for similar electronics and communication R&D contracts by the Marine Corps?

The provided data snippet focuses on a single contract awarded in 2002. To analyze historical spending trends for similar contracts, one would need access to a broader dataset encompassing multiple years and various contracts within the 'Electronics & Communication EQ-ENG/MANUF DEV' category for the Marine Corps. This would involve querying databases like FPDS or USAspending for contracts under relevant NAICS codes (e.g., 334511) and PSC codes (Product Service Codes) related to R&D and electronic equipment. Without this broader data, it's impossible to establish a trend or benchmark this specific contract's value against historical spending patterns.

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

Lockheed Martin Corporation is a major defense contractor and frequently receives large contracts from the Department of Defense. While this specific data point highlights a sole-source award, it is not uncommon for large, specialized defense contractors to be awarded sole-source contracts, particularly in areas requiring unique technological expertise or proprietary systems. Analyzing Lockheed Martin's broader contract history would reveal numerous sole-source awards across various defense programs. A comprehensive assessment would require examining the frequency, value, and justification of these sole-source awards over time, compared to their competitively awarded contracts, to understand their overall performance and pricing in such scenarios.

What are the potential performance risks associated with this long-term R&D contract?

Long-term R&D contracts, especially those spanning over nine years like this one (2002-2011), carry inherent performance risks. These can include technological obsolescence, where the developed systems become outdated before or shortly after deployment; scope creep, where the project's objectives expand beyond the original intent, leading to increased costs and delays; contractor performance issues, such as missed milestones or quality deficiencies; and challenges in adapting to evolving military requirements. The CPFF structure can also mitigate some contractor risk, potentially reducing their incentive to aggressively manage performance and costs, necessitating strong government oversight.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 1801 STATE ROUTE 17C, OWEGO, NY, 23

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline