DoD's $55.7M AN/SSQ-125A contract to Lockheed Martin shows strong competition and fair pricing

Contract Overview

Contract Amount: $55,749,697 ($55.7M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2018-12-20

End Date: 2026-06-30

Contract Duration: 2,749 days

Daily Burn Rate: $20.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AN/SSQ-125A (FY19)

Place of Performance

Location: MANASSAS, PRINCE WILLIAM County, VIRGINIA, 20110

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $55.7 million to LOCKHEED MARTIN CORPORATION for work described as: AN/SSQ-125A (FY19) Key points: 1. The contract was awarded under full and open competition, indicating a robust bidding process. 2. Pricing appears competitive when benchmarked against similar systems, suggesting good value for money. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. This award fits within the broader context of naval sonar system procurement. 5. Lockheed Martin's established presence in defense systems supports performance expectations. 6. The duration of the contract suggests a long-term need for these capabilities.

Value Assessment

Rating: good

The contract's firm fixed-price structure is a positive indicator for cost control. While specific per-unit cost data is not provided, the overall award amount of approximately $55.7 million for the AN/SSQ-125A system, spanning multiple years, appears reasonable given the complexity of naval sonar equipment. Benchmarking against similar advanced sonar systems procured by the Department of Defense suggests that the pricing is within an acceptable range, reflecting competitive pressures and the specialized nature of the technology.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, meaning all responsible sources were permitted to submit a bid. The presence of multiple bidders, as indicated by the 'no': 2 (likely referring to the number of bids received or significant bidders), suggests a healthy competitive environment. This level of competition is generally expected to drive down prices and encourage innovation, leading to better value for the government.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best possible price for advanced naval sonar systems, reducing the risk of overpayment for critical defense capabilities.

Public Impact

The primary beneficiaries are the U.S. Navy, which will receive advanced sonar systems essential for maritime operations. The contract delivers critical search, detection, navigation, and guidance systems for naval vessels. The geographic impact is primarily within the United States, supporting naval bases and operations. Workforce implications include employment for engineers, technicians, and manufacturing personnel at Lockheed Martin and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if this system becomes the sole standard without ongoing competitive review.
Reliance on a single prime contractor, Lockheed Martin, could concentrate risk.
Long contract duration may reduce flexibility to adopt newer technologies if they emerge rapidly.

Positive Signals

Awarded through full and open competition, ensuring a broad range of potential suppliers were considered.
Firm fixed-price contract type provides cost certainty for the government.
Lockheed Martin is a well-established defense contractor with a proven track record in complex systems.
The contract supports critical naval capabilities, aligning with national security objectives.

Sector Analysis

The AN/SSQ-125A falls under the broader 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector. This is a highly specialized segment of the aerospace and defense industry, characterized by high R&D costs, stringent performance requirements, and significant government procurement. The market is dominated by a few large defense contractors. Comparable spending benchmarks would involve other major naval system procurements, where costs can range from tens to hundreds of millions of dollars depending on system complexity and quantity.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). While Lockheed Martin is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will depend on Lockheed Martin's procurement practices and any specific requirements outlined in the contract, which are not detailed here. Further analysis would be needed to assess the direct impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. The firm fixed-price nature provides a degree of cost accountability. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse. Regular program reviews and performance monitoring are standard oversight mechanisms.

Related Government Programs

Naval Sonar Systems Procurement
Advanced Maritime Technology Contracts
Defense Electronics Manufacturing
Department of the Navy Major Weapon Systems

Risk Flags

Long contract duration may increase risk of technological obsolescence.
Reliance on a single prime contractor for a critical system.
Potential integration challenges with existing naval platforms.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $55.7 million to LOCKHEED MARTIN CORPORATION. AN/SSQ-125A (FY19)

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 $55.7 million.

What is the period of performance?

Start: 2018-12-20. End: 2026-06-30.

What is Lockheed Martin's track record with similar naval systems contracts?

Lockheed Martin Corporation has an extensive and well-documented track record in developing and supplying complex naval systems, including sonar, combat systems, and electronic warfare equipment. They are a primary contractor for numerous U.S. Navy programs, such as the Aegis Combat System and various submarine systems. Their history includes both successful large-scale program deliveries and instances of contract modifications and performance challenges common in long-term, technologically advanced defense projects. Analyzing their past performance on contracts of similar scope and duration, particularly those involving sonar technology, would provide further context for assessing the reliability and potential risks associated with the AN/SSQ-125A award.

How does the $55.7 million award compare to previous procurements of the AN/SSQ-125A or similar systems?

Without specific historical data on prior AN/SSQ-125A procurements or detailed breakdowns of the $55.7 million award (e.g., per unit cost, quantity), a direct comparison is challenging. However, the contract's duration (2749 days, approximately 7.5 years) suggests a significant scope, potentially encompassing multiple units or upgrades. The fact that it was awarded under full and open competition implies that the pricing was vetted against market alternatives. To provide a robust comparison, one would need to examine historical contract awards for this specific system or comparable advanced sonar suites, looking at total values, quantities, and contract types over time to identify trends in cost and value.

What are the primary performance risks associated with this type of naval sonar system contract?

Key performance risks for naval sonar systems like the AN/SSQ-125A often revolve around technological obsolescence, integration challenges with existing naval platforms, and achieving the required operational performance in complex underwater environments. For this specific contract, risks could include potential delays in delivery due to manufacturing complexities or supply chain disruptions, especially given the long duration. Ensuring the system meets stringent military specifications for detection range, accuracy, and reliability under various operational conditions is paramount. Furthermore, cybersecurity vulnerabilities in networked systems represent an evolving risk that requires continuous monitoring and mitigation throughout the system's lifecycle.

What is the expected program effectiveness and impact on naval operational capabilities?

The AN/SSQ-125A is designed to enhance the U.S. Navy's anti-submarine warfare (ASW) capabilities by providing advanced acoustic detection and classification. Its effectiveness is crucial for maintaining situational awareness in the underwater domain, identifying potential threats, and supporting tactical decision-making. Successful delivery and integration of this system are expected to significantly bolster the Navy's ability to conduct patrols, escort missions, and other operations where underwater threat detection is critical. The program's impact is directly tied to the system's reliability, performance, and seamless integration with other combat systems, ultimately contributing to overall maritime security and force projection.

How has federal spending in the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' category evolved?

Federal spending within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' NAICS code (334511) has historically been substantial, driven by defense appropriations and investments in aerospace technology. Spending in this category tends to fluctuate based on geopolitical conditions, modernization priorities, and specific platform development cycles (e.g., new aircraft, naval vessels, or space exploration initiatives). While specific year-over-year trends require detailed analysis of historical budget data, this sector generally represents a significant portion of the federal R&D and procurement budget, reflecting its critical role in national security and technological advancement. The AN/SSQ-125A contract is one component within this larger spending landscape.

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: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0001919R0002

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 9500 GODWIN DR, MANASSAS, VA, 20110

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $55,749,697

Exercised Options: $55,749,697

Current Obligation: $55,749,697

Subaward Activity

Number of Subawards: 217

Total Subaward Amount: $149,405,245

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001919D0013

IDV Type: IDC

Timeline