DoD Awards $45M to Lockheed Martin for IMU Obsolescence Redesign NRE, Facing Limited Competition
Contract Overview
Contract Amount: $45,007,729 ($45.0M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2023-12-12
End Date: 2027-10-19
Contract Duration: 1,407 days
Daily Burn Rate: $32.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: IMU OBSOLESCENCE REDESIGN NRE
Place of Performance
Location: STRATFORD, FAIRFIELD County, CONNECTICUT, 06614
Plain-Language Summary
Department of Defense obligated $45.0 million to LOCKHEED MARTIN CORPORATION for work described as: IMU OBSOLESCENCE REDESIGN NRE Key points: 1. Significant investment in critical aircraft component redesign. 2. Sole-source award to Lockheed Martin raises competition concerns. 3. Long contract duration (1407 days) suggests complex development. 4. Focus on obsolescence mitigation is a key driver.
Value Assessment
Rating: questionable
The award value of $45M for NRE (Non-Recurring Engineering) is substantial. Without specific benchmarks for this type of redesign, it's difficult to definitively assess value. However, the lack of competition suggests potential for inflated pricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, indicating a lack of competitive bidding. This method limits price discovery and may result in higher costs for the government compared to a fully competed contract.
Taxpayer Impact: The sole-source nature of this award means taxpayers may be paying a premium due to the absence of competitive pressure to lower prices.
Public Impact
Ensures continued operational readiness of naval aircraft by addressing critical component obsolescence. Supports a major defense contractor, Lockheed Martin, and its supply chain. Potential for follow-on production contracts after the NRE phase. Impacts the availability and cost of future aircraft maintenance and upgrades.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- High NRE cost
Positive Signals
- Addresses critical obsolescence
- Ensures platform readiness
- Long-term contract stability
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on aircraft parts and auxiliary equipment. Spending in this area is often driven by national security needs and the lifecycle management of complex defense systems.
Small Business Impact
The awardee is Lockheed Martin Corporation, a large prime contractor. There is no indication in the provided data that small businesses are involved as subcontractors, which is common in sole-source awards to major defense firms.
Oversight & Accountability
As a sole-source award, this contract warrants close oversight to ensure the contractor is performing efficiently and that costs are reasonable. The Department of the Navy's contracting activity will be responsible for monitoring progress and expenditures.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits competition and price discovery.
- Potential for cost overruns in NRE phase.
- Dependency on a single contractor for critical component redesign.
- Long contract duration may indicate complexity or potential for delays.
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, ct, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $45.0 million to LOCKHEED MARTIN CORPORATION. IMU OBSOLESCENCE REDESIGN NRE
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 $45.0 million.
What is the period of performance?
Start: 2023-12-12. End: 2027-10-19.
What specific obsolescence issues are being addressed, and what is the projected impact on aircraft availability and safety?
The contract specifies 'IMU Obsolescence Redesign NRE,' indicating the Inertial Measurement Unit is facing obsolescence. This redesign is crucial for maintaining the operational readiness and safety of naval aircraft that rely on this component. Without this redesign, the aircraft could face grounding or mission capability limitations, impacting naval operations.
What is the justification for the sole-source award, and were alternative solutions or contractors considered?
The justification for a sole-source award typically involves factors like unique capabilities, proprietary technology, or urgent needs where only one source can reasonably fulfill the requirement. For this contract, the government would need to demonstrate why Lockheed Martin is the only viable option for the IMU redesign, potentially due to existing system integration or specific technical expertise.
How does the $45M NRE cost compare to similar redesign efforts for critical aircraft components in the defense sector?
Benchmarking NRE costs for complex component redesigns is challenging due to proprietary data and varying technical complexities. However, $45M represents a significant investment. A thorough cost analysis by the DoD would be necessary to validate if this figure is reasonable compared to industry standards for similar scope and risk profiles in defense aerospace.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0001924N2573
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1801 STATE RT 17 C, OWEGO, NY, 13827
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $45,007,729
Exercised Options: $45,007,729
Current Obligation: $45,007,729
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0001923G0002
IDV Type: BOA
Timeline
Start Date: 2023-12-12
Current End Date: 2027-10-19
Potential End Date: 2027-10-19 00:00:00
Last Modified: 2025-09-02
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