DoD awards $22.9M for sonobuoys, with Lockheed Martin securing the option year procurement

Contract Overview

Contract Amount: $22,934,610 ($22.9M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2022-03-30

End Date: 2027-05-19

Contract Duration: 1,876 days

Daily Burn Rate: $12.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: OPTION YEAR 2 PROCUREMENT OF AN/SSQ-125A SONOBUOYS

Place of Performance

Location: COLUMBIA CITY, WHITLEY County, INDIANA, 46725

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $22.9 million to LOCKHEED MARTIN CORPORATION for work described as: OPTION YEAR 2 PROCUREMENT OF AN/SSQ-125A SONOBUOYS Key points: 1. This contract represents an option year procurement, suggesting a continuation of existing services or products. 2. The firm fixed-price contract type indicates that costs are largely predictable, with less risk of cost overruns for the government. 3. The award was made under full and open competition, implying a competitive bidding process. 4. The duration of the contract is substantial, spanning over 1800 days, which requires careful performance monitoring. 5. The procurement is for sonobuoys, a critical component for naval operations, highlighting its strategic importance. 6. The contractor, Lockheed Martin Corporation, is a major defense contractor, suggesting established capabilities.

Value Assessment

Rating: good

The contract value of $22.9 million for an option year procurement of sonobuoys appears reasonable within the defense sector. Benchmarking against similar procurements for advanced sonar equipment would provide a more precise value-for-money assessment. The firm fixed-price structure generally offers good value by capping government expenditure. However, without detailed cost breakdowns or comparisons to alternative technologies, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. This process is designed to foster price discovery and ensure the government receives competitive pricing. The presence of multiple bidders typically leads to better value for the government compared to sole-source or limited competition scenarios. Specific details on the number of bidders are not provided, which would offer further insight into the intensity of the competition.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through a robust bidding process, ensuring that government funds are used efficiently.

Public Impact

The primary beneficiaries are the Department of the Navy and its operational forces, who receive essential sonobuoy technology. The services delivered include the procurement of AN/SSQ-125A sonobuoys, crucial for naval intelligence, surveillance, and reconnaissance. The geographic impact is primarily within the operational theaters of the U.S. Navy, with potential implications for naval bases and deployment locations. Workforce implications may include continued employment for personnel involved in the manufacturing and support of sonobuoys at Lockheed Martin facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if this is a sole-source follow-on without sufficient market research.
Long contract duration could lead to complacency if not actively managed.
Reliance on a single large prime contractor may limit opportunities for smaller, innovative suppliers.

Positive Signals

Award under full and open competition suggests a competitive market for sonobuoys.
Firm fixed-price contract type provides cost certainty for the government.
Contractor is a well-established defense manufacturer with proven capabilities.
Option year procurement indicates successful past performance and a stable supply chain.

Sector Analysis

The procurement of sonobuoys falls within the broader defense electronics and systems manufacturing sector. This sector is characterized by high research and development costs, stringent quality requirements, and long product lifecycles. The market for naval acoustic systems is specialized, with a few key players dominating. Comparable spending benchmarks would involve analyzing other procurements for sonar systems, acoustic sensors, and related naval warfare equipment, which often represent significant investments for defense agencies.

Small Business Impact

This contract does not appear to have a small business set-aside, as indicated by 'ss': false. The prime contractor, Lockheed Martin, is a large business. There is no explicit information regarding subcontracting plans for small businesses within this specific award. The impact on the small business ecosystem would depend on whether Lockheed Martin actively seeks small business subcontractors for components or specialized services related to this sonobuoy procurement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which holds the contractor responsible for delivering within the agreed price. Transparency is facilitated by the contract award being made under full and open competition. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Naval Sonar Systems Procurement
Acoustic Sensor Manufacturing
Defense Electronics and Systems
Naval Warfare Systems
Department of Defense Procurement

Risk Flags

Potential for technological obsolescence
Reliance on a single prime contractor
Long contract duration requires sustained oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.9 million to LOCKHEED MARTIN CORPORATION. OPTION YEAR 2 PROCUREMENT OF AN/SSQ-125A SONOBUOYS

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 $22.9 million.

What is the period of performance?

Start: 2022-03-30. End: 2027-05-19.

What is the historical spending trend for AN/SSQ-125A sonobuoys or similar systems by the Department of the Navy?

Analyzing historical spending on AN/SSQ-125A sonobuoys or comparable systems by the Department of the Navy is crucial for understanding budget allocation and identifying potential trends in demand and pricing. Without access to specific historical contract data for this particular sonobuoy model, a comprehensive trend analysis is difficult. However, generally, naval systems like sonobuoys are subject to cyclical procurement based on fleet modernization, operational tempo, and technological obsolescence. Spending can fluctuate significantly year-over-year due to major program milestones, competitive bidding outcomes, and shifts in defense priorities. For instance, periods of heightened geopolitical tension or increased naval presence might correlate with higher spending on acoustic detection systems. Conversely, budget constraints or the introduction of disruptive new technologies could lead to reduced or reallocated spending. A detailed review of past solicitations, awards, and contract modifications for sonobuoys would reveal patterns in quantity, unit prices, and total contract values over time, providing context for the current $22.9 million option year award.

How does the unit cost of these sonobuoys compare to previous procurements or other similar systems?

Comparing the unit cost of these sonobuoys to previous procurements or similar systems is essential for assessing value for money. The provided data does not include the number of units procured under this $22.9 million award, making a direct unit cost calculation impossible. However, if the number of units were known, it could be compared against historical contract awards for the AN/SSQ-125A or other sonobuoy variants. Factors influencing unit cost include technological advancements, manufacturing efficiencies, raw material prices, and the competitive landscape at the time of procurement. A higher unit cost in this option year compared to previous ones might be justified by inflation, improved features, or increased production costs. Conversely, a lower unit cost could indicate successful cost reduction initiatives by the contractor or more intense competition. Benchmarking against systems with similar capabilities but from different manufacturers would also provide valuable insights into market pricing and the government's negotiating position.

What are the key performance metrics and delivery schedules associated with this contract?

Key performance metrics and delivery schedules are critical for ensuring the successful execution of this sonobuoy contract. While the contract duration is specified as ending on May 19, 2027, with a start date of March 30, 2022, the specific delivery milestones and performance standards are not detailed in the provided summary. Typically, such contracts would outline requirements for reliability, operational effectiveness (e.g., detection range, accuracy), and compliance with technical specifications. Delivery schedules would likely involve phased deliveries of sonobuoys to designated naval facilities, potentially tied to operational readiness needs. The Department of the Navy would monitor adherence to these metrics through contract surveillance and performance reviews. Failure to meet performance standards or delivery deadlines could result in penalties, contract modifications, or even termination, underscoring the importance of clearly defined and measurable performance expectations.

What is Lockheed Martin Corporation's track record with similar defense procurements, particularly in sonar and acoustic systems?

Lockheed Martin Corporation has a substantial and well-established track record in defense procurements, including significant experience with sonar and acoustic systems. As one of the largest defense contractors globally, the company is involved in a wide array of naval systems, electronic warfare, and sensor technologies. Their portfolio often includes advanced sonar suites, acoustic sensors, and related underwater warfare capabilities for various military branches. This extensive experience suggests a high level of technical expertise, manufacturing capability, and program management proficiency. When evaluating this specific sonobuoy contract, Lockheed Martin's history of delivering complex systems on time and within budget, their success in previous competitive bids for similar technologies, and their overall performance ratings on past contracts would be key indicators. Their established presence in the defense market provides a degree of confidence in their ability to meet the requirements, though rigorous oversight remains necessary.

Are there any identified risks associated with the technology or the contractor for this sonobuoy procurement?

Risks associated with this sonobuoy procurement can be categorized into technological and contractor-related aspects. Technologically, the AN/SSQ-125A, while a current system, may face risks related to obsolescence as newer acoustic technologies emerge. There's also the inherent risk of performance degradation or failure in harsh maritime environments. For the contractor, Lockheed Martin, while a reputable firm, risks could include potential supply chain disruptions, labor issues, or unforeseen cost increases that might strain the firm fixed-price agreement. Past performance data, if available, would reveal any history of delivery delays, quality issues, or cost overruns on similar contracts. Furthermore, the reliance on a single prime contractor, even with competition in the initial award, can pose a risk if they face significant financial or operational challenges. The government's risk mitigation strategies would involve robust contract oversight, clear performance metrics, and contingency planning.

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: $22,934,610

Exercised Options: $22,934,610

Current Obligation: $22,934,610

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