Lockheed Martin awarded $60.8M for electronics and communication equipment development, spanning over 20 years

Contract Overview

Contract Amount: $60,865,077 ($60.9M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 1997-04-03

End Date: 2018-02-15

Contract Duration: 7,623 days

Daily Burn Rate: $8.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 199712!1700!0714!AA4L0!NAVAL AIR SYSTEMS COMMAND !N0001996C0005 !A!*!P00017 !19970403!20001230!867704447!867704447!834951691!N!94117!LOCKHEED MARTIN CORPORATION !65 SPIT BROOK RD !NASHUA !NH!03060!50260!011!33!NASHUA !HILLSBOROUGH !N.H. !0001!+000002686912!N!N!000000000000!AC65!RDTE/ELECTRONICS & COMMUNICATION EQ-ENG/MANUF DEV !A7 !ELECTRONICS AND COMMUNICATION !2000!NOT DISCERNABLE OR CLASSIFIED !4899!3!*!*!H!B!A!*!A !N!R!2!002!B!* !A!N!Z!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03060

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $60.9 million to LOCKHEED MARTIN CORPORATION for work described as: 199712!1700!0714!AA4L0!NAVAL AIR SYSTEMS COMMAND !N0001996C0005 !A!*!P00017 !19970403!20001230!867704447!867704447!834951691!N!94117!LOCKHEED MARTIN CORPORATION !65 SPIT BROOK RD !NASHUA !NH!03060!50260!011!33!NASHUA !HILLSB… Key points: 1. Contract awarded for R&D in electronics and communication equipment, indicating a focus on technological advancement. 2. Long contract duration of over 20 years suggests a sustained need for the developed technologies. 3. The contract was awarded through full and open competition, implying a competitive bidding process. 4. The primary contractor, Lockheed Martin, is a major defense industry player with extensive experience. 5. The contract type is Cost Plus Award Fee, which incentivizes performance while managing costs. 6. The North American Industry Classification System (NAICS) code 334511 points to a specialized manufacturing sector.

Value Assessment

Rating: fair

The contract value of $60.8 million over more than 20 years averages to approximately $3 million per year. This figure needs to be benchmarked against similar R&D contracts for electronics and communication equipment development to assess value for money. The Cost Plus Award Fee (CPAF) structure allows for flexibility but can sometimes lead to higher costs if award fees are consistently met without stringent cost controls. Without specific performance metrics and award fee payouts, 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,' suggesting that all responsible sources were permitted to submit bids. The presence of two bids indicates a degree of competition, though the specific number of bidders can vary significantly for complex R&D contracts. A higher number of bidders generally leads to better price discovery and potentially lower costs for the government.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best value through a competitive process, potentially driving down costs and encouraging innovation among bidders.

Public Impact

The primary beneficiary is the Department of Defense, which will receive advanced electronics and communication equipment. The contract supports the development and manufacturing of specialized systems crucial for defense operations. The geographic impact is primarily centered around Nashua, New Hampshire, where Lockheed Martin's facility is located. The contract likely supports a specialized workforce within Lockheed Martin, including engineers and manufacturing personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The extended duration of the contract (over 20 years) could lead to cost overruns if not managed effectively.
Cost Plus Award Fee contracts can sometimes incentivize higher spending to achieve award fees.
The specific technological advancements and their ultimate utility require ongoing monitoring to ensure alignment with defense needs.

Positive Signals

Awarded through full and open competition, suggesting a competitive environment for securing the contract.
Lockheed Martin is a reputable contractor with a strong track record in defense R&D.
The contract focuses on developing critical electronics and communication equipment, enhancing national security capabilities.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on the research, development, and manufacturing of advanced electronics and communication systems. The market for such specialized defense technology is characterized by high barriers to entry, significant R&D investment, and long product development cycles. Comparable spending benchmarks would involve analyzing other R&D contracts awarded by the Department of Defense for similar technological areas, considering factors like contract type, duration, and scope.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large prime contract awarded to Lockheed Martin, there may be opportunities for small businesses to participate as subcontractors. However, the extent of small business subcontracting is not detailed in the provided data and would require further investigation into the contract's specific clauses and performance reports.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. Accountability measures are embedded within the Cost Plus Award Fee structure, which includes performance incentives. Transparency is generally maintained through contract reporting requirements, though specific details of R&D progress and financial expenditures may be subject to classification or proprietary restrictions.

Related Government Programs

Defense Research and Development
Electronics and Communication Equipment Manufacturing
Naval Air Systems Command Contracts
Advanced Technology Development

Risk Flags

Long contract duration may increase risk of technological obsolescence.
Cost Plus Award Fee structure requires careful monitoring to ensure cost control.
Extended performance period could lead to challenges in maintaining consistent oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $60.9 million to LOCKHEED MARTIN CORPORATION. 199712!1700!0714!AA4L0!NAVAL AIR SYSTEMS COMMAND !N0001996C0005 !A!*!P00017 !19970403!20001230!867704447!867704447!834951691!N!94117!LOCKHEED MARTIN CORPORATION !65 SPIT BROOK RD !NASHUA !NH!03060!50260!011!33!NASHUA !HILLSBOROUGH !N.H. !0001!+000002686912!N!N!000000000000!AC65!RDTE/ELECTRONICS & COMMUNICATION EQ-ENG/MANUF DEV !A7 !ELECTRONICS AND COMMUNICATION !2000!NOT DISCERNABLE OR CLASSIFIED !4899!3!*!*!H!B!A!*!A !N!R!2!0

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 $60.9 million.

What is the period of performance?

Start: 1997-04-03. End: 2018-02-15.

What is Lockheed Martin's track record with similar Cost Plus Award Fee contracts for R&D in electronics and communication?

Lockheed Martin has a long history of executing complex R&D contracts, including those utilizing Cost Plus Award Fee (CPAF) structures, particularly within the defense sector. Their experience spans a wide array of technological domains, including advanced electronics, communication systems, and aeronautical components. Analyzing their past performance on similar CPAF contracts would involve reviewing historical award fee payouts, cost performance indices, and any documented instances of cost overruns or performance issues. Generally, major defense contractors like Lockheed Martin are adept at navigating the complexities of CPAF, balancing the need to achieve performance targets with cost management. However, the effectiveness of CPAF is highly dependent on the specific metrics defined in the contract and the rigor of government oversight in evaluating performance and justifying award fees.

How does the average annual value of this contract compare to other R&D contracts in the electronics and communication sector?

This contract's average annual value is approximately $3 million ($60.8 million over 20+ years). To benchmark this, one would need to compare it against a dataset of similar R&D contracts awarded by the Department of Defense or other federal agencies within the electronics and communication equipment manufacturing (NAICS 334511) or related R&D sectors. Factors such as contract duration, specific technological focus (e.g., radar, satellite communication, cyber), and the prime contractor's size and reputation would influence comparable values. Contracts for cutting-edge, high-risk R&D often command higher annual values due to the intensive research efforts and specialized expertise required. A preliminary assessment suggests that $3 million annually for a long-term, specialized R&D effort might be within a reasonable range, but a definitive comparison requires access to a broader dataset of contemporaneous contracts.

What are the key performance indicators (KPIs) used to determine award fees for this contract?

The specific Key Performance Indicators (KPIs) used to determine award fees for this contract are not detailed in the provided data. For Cost Plus Award Fee (CPAF) contracts, KPIs are typically established during the negotiation phase and are outlined in the contract's Statement of Work (SOW) or Performance Requirements. These KPIs are designed to measure the contractor's success in achieving specific technical, schedule, and cost objectives. For an R&D contract focused on electronics and communication equipment development, potential KPIs could include milestones related to prototype development, system integration, testing success rates, adherence to technical specifications, delivery timelines, and potentially cost control measures. The government's contracting officer and technical representatives are responsible for evaluating the contractor's performance against these KPIs to determine the amount of award fee, if any, to be paid.

What is the historical spending trend for this specific contract or similar programs managed by Naval Air Systems Command?

The provided data reflects a single award of $60.8 million to Lockheed Martin for electronics and communication equipment development, with a start date of April 3, 1997, and an end date of February 15, 2018. This suggests a long-term, potentially evolving contract. To understand historical spending trends, one would need to examine the contract's funding history, including annual obligations and expenditures. If this represents a single definitive contract, the total obligated amount would be $60.8 million. However, if this is a base contract with multiple modifications or task orders, the spending pattern could be more dynamic. Naval Air Systems Command (NAVAIR) manages a vast portfolio of R&D and procurement contracts; analyzing spending trends for similar programs would involve looking at NAVAIR's overall budget allocation for electronics, communications, and related R&D efforts over the contract's lifespan.

Are there any identified risks associated with the long duration (over 20 years) of this contract?

Yes, the long duration of over 20 years presents several potential risks. Firstly, technological obsolescence is a significant concern; the technology landscape for electronics and communication evolves rapidly, and equipment developed early in the contract might be outdated by its end. Secondly, cost escalation is a risk, as extended periods increase the likelihood of unforeseen economic factors, material cost increases, or changes in labor rates impacting the overall cost. Thirdly, maintaining consistent program oversight and stakeholder engagement over such an extended period can be challenging, potentially leading to drift from original objectives or reduced accountability. Finally, the contractor's organizational stability and key personnel continuity over two decades are also factors that could introduce risk if not managed proactively.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 65 SPIT BROOK RD, NASHUA, NH, 03060

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline