DoD's $53.3M Combat Convoy Simulator contract awarded to Lockheed Martin shows fair value with 3 bidders

Contract Overview

Contract Amount: $53,322,387 ($53.3M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2007-10-16

End Date: 2009-07-16

Contract Duration: 639 days

Daily Burn Rate: $83.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: COMBAT CONVOY SIMULATOR (CAMP PENDLETON)

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32825

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $53.3 million to LOCKHEED MARTIN CORPORATION for work described as: COMBAT CONVOY SIMULATOR (CAMP PENDLETON) Key points: 1. The contract achieved a competitive outcome with three bids, suggesting a reasonable price discovery process. 2. While specific performance metrics are not detailed, the firm-fixed-price structure incentivizes contractor efficiency. 3. The duration of the contract (639 days) is moderate for a complex simulation system. 4. This award falls within the custom computer programming services sector, a common area for defense simulation needs. 5. The absence of small business set-asides indicates a focus on large prime contractors for this specific requirement.

Value Assessment

Rating: good

The contract's total value of approximately $53.3 million for a combat convoy simulator appears reasonable given the complexity of such systems. Benchmarking against similar large-scale simulation contracts is challenging without more detailed scope information, but the firm-fixed-price nature suggests the government secured a defined cost. The award was made under full and open competition, which typically leads to better pricing than sole-source or limited competition scenarios. The contractor, Lockheed Martin, is a major defense contractor with extensive experience in simulation and training systems.

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 bids. Three bids were received, which suggests a healthy level of competition for this requirement. A competitive process like this generally allows for price discovery and encourages bidders to offer their best pricing and technical solutions to win the contract. The presence of multiple bidders helps mitigate the risk of overpayment and ensures the government receives a competitive offer.

Taxpayer Impact: The full and open competition with multiple bidders is beneficial for taxpayers as it likely resulted in a more cost-effective solution compared to a sole-source award. This process helps ensure that taxpayer funds are used efficiently by driving down prices through market forces.

Public Impact

Military personnel at Camp Pendleton will benefit from enhanced training capabilities provided by the combat convoy simulator. The simulator will deliver realistic training scenarios for convoy operations, improving soldier preparedness and safety. The primary geographic impact is at Camp Pendleton, California, where the training will be conducted. The contract supports specialized technical roles within Lockheed Martin and potentially its subcontractors for the development and maintenance of the simulator.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the firm-fixed-price contract does not adequately account for all development and integration complexities.
Risk of performance degradation if the simulator does not meet the rigorous training requirements of combat convoy operations.
Dependence on a single large prime contractor (Lockheed Martin) for a critical training capability.

Positive Signals

Awarded under full and open competition, indicating a robust bidding process.
Firm-fixed-price contract type incentivizes contractor cost control and efficiency.
Contractor (Lockheed Martin) possesses significant experience in defense simulation and training systems.

Sector Analysis

This contract falls within the defense sector, specifically in the area of simulation and training systems. The market for defense simulation is substantial, driven by the need for realistic and cost-effective training solutions that reduce risks associated with live training. Companies like Lockheed Martin are key players in this market, offering advanced technological solutions. Spending in this category is often characterized by large, complex contracts requiring specialized expertise and significant R&D investment.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have a specific small business subcontracting goal explicitly mentioned in the provided data. The prime contractor, Lockheed Martin, is a large aerospace and defense company. While large prime contractors often utilize small businesses in their supply chains, the absence of a specific set-aside or reporting requirement in this data suggests that small business participation may not have been a primary focus for this particular award, or it was managed through Lockheed Martin's broader subcontracting programs.

Oversight & Accountability

The oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. As a definitive contract awarded under full and open competition, it is subject to standard federal procurement regulations and oversight. Transparency is generally maintained through contract award databases and reporting requirements. The Inspector General for the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.

Related Government Programs

Military Training Simulators
Combat Vehicle Simulation
Virtual Training Environments
Department of Defense Simulation and Training Programs
Custom Computer Programming Services Contracts

Risk Flags

Potential for performance issues if simulator fidelity does not meet training objectives.
Risk of cost overruns if unforeseen technical challenges arise during development.
Technological obsolescence if the system is not designed for future upgrades.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $53.3 million to LOCKHEED MARTIN CORPORATION. COMBAT CONVOY SIMULATOR (CAMP PENDLETON)

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $53.3 million.

What is the period of performance?

Start: 2007-10-16. End: 2009-07-16.

What is Lockheed Martin's track record with similar defense simulation contracts?

Lockheed Martin has a long and extensive track record in developing and delivering complex simulation and training systems for various branches of the U.S. military and international partners. Their portfolio includes flight simulators, combat vehicle simulators, and virtual training environments. They have consistently been awarded large-scale contracts in this domain due to their technological capabilities and established presence in the defense industry. While specific performance details for past contracts are often classified or not publicly disclosed, their continued success in winning competitive bids for simulation programs indicates a generally positive track record and perceived capability by the Department of Defense.

How does the value of this contract compare to other combat convoy simulators?

Direct comparison of the $53.3 million value for the Combat Convoy Simulator (Camp Pendleton) to other similar contracts is challenging without detailed specifications of scope, complexity, and technology used. However, for a sophisticated system designed to train personnel in realistic combat convoy scenarios, this figure appears within a reasonable range for a large defense contractor like Lockheed Martin. Factors influencing cost include the fidelity of the simulation, the number of concurrent users, the integration of various vehicle types, and the realism of the virtual environment. Given it was awarded under full and open competition with three bidders, the price likely reflects market conditions for such specialized systems.

What are the primary risks associated with this type of simulation contract?

The primary risks associated with this type of simulation contract include technological obsolescence, where the system may become outdated before its intended lifecycle ends due to rapid advancements in technology. Performance risk is also significant, as the simulator must accurately replicate complex combat scenarios to be effective for training; failure to meet these requirements can render the system useless. Integration risk is another concern, ensuring the simulator interfaces correctly with existing training infrastructure and doctrine. Finally, cost overrun risk, even in a firm-fixed-price contract, can arise from unforeseen technical challenges or scope creep if not managed tightly.

How effective are combat convoy simulators in improving soldier preparedness?

Combat convoy simulators are generally considered highly effective tools for improving soldier preparedness, particularly in enhancing decision-making, situational awareness, and tactical execution in complex convoy operations. They provide a safe and repeatable environment to practice responses to various threats, such as IEDs, ambushes, and vehicle malfunctions, without the risks and costs associated with live training. Studies and anecdotal evidence from military training programs suggest that simulator training significantly improves crew coordination, communication, and the ability to react appropriately under stress. This leads to better mission outcomes and reduced casualties in real-world scenarios.

What has been the historical spending trend for simulation and training systems by the Department of Defense?

Historical spending by the Department of Defense (DoD) on simulation and training systems has been substantial and generally increasing over the past two decades. Driven by the need for realistic training in complex operational environments, advancements in technology, and a desire to reduce the costs and risks of live training, the DoD consistently allocates significant portions of its budget to these capabilities. Spending often fluctuates based on geopolitical events, technological shifts (e.g., adoption of virtual and augmented reality), and strategic priorities. The trend indicates a sustained investment in maintaining a technologically advanced and well-trained fighting force through simulation.

What is the typical contract duration for large-scale defense simulation projects?

The typical contract duration for large-scale defense simulation projects can vary significantly based on the complexity, scope, and phase of the contract (e.g., development, production, sustainment). Development and initial fielding contracts, like the one for the Combat Convoy Simulator, often range from 1 to 5 years. However, contracts that include long-term sustainment, upgrades, and operational support can extend for 10 years or more, often through multiple contract modifications or follow-on awards. The 639-day duration (approximately 1.75 years) for this specific contract falls within the shorter end for initial development and delivery phases.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services

Product/Service Code: TRAINING AIDS AND DEVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: M6785407R8022

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 12506 LAKE UNDERHILL RD, ORLANDO, FL, 32825

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $53,654,965

Exercised Options: $53,322,387

Current Obligation: $53,322,387

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline