Navy Awards $848M for Engineering Services to Lockheed Martin for DDG-51 Destroyers

Contract Overview

Contract Amount: $15,229,267 ($15.2M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2001-10-23

End Date: 2008-06-30

Contract Duration: 2,442 days

Daily Burn Rate: $6.2K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200206!021696!1700!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002400C5147 !A!N! !Y!P00002 !20011023!20060331!848028494!150049880!834951691!N!LOCKHEED MARTIN CORPORATION !199 BORTON LANDING ROAD !MOORESTOWN !NJ!08057!47850!005!34!MOORESTOWN !BURLINGTON !NEW JERSEY!+000000250000!Y!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A3 !SHIPS !2SCY!DESTROYER DDG-51 !541330!E! !3! ! !B! ! !99990909!B! ! !A! !B!U!U!1!001!N!4A!A!Y!Z! ! !N!C!N! ! ! !A!A!A!A!* !A!D!N! ! ! !Y! ! !0001!

Place of Performance

Location: MOORESTOWN, BURLINGTON County, NEW JERSEY, 08057, UNITED STATES OF AMERICA

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $15.2 million to LOCKHEED MARTIN CORPORATION for work described as: 200206!021696!1700!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002400C5147 !A!N! !Y!P00002 !20011023!20060331!848028494!150049880!834951691!N!LOCKHEED MARTIN CORPORATION !199 BORTON LANDING ROAD !MOORESTOWN !NJ!08057!47850!005!34!MOORESTOWN !BURLI… Key points: 1. The contract is for engineering technical services related to the Arleigh Burke-class (DDG-51) destroyer program. 2. Lockheed Martin Corporation, a major defense contractor, is the sole recipient of this award. 3. The contract value is substantial at $848,028,494, indicating significant scope and complexity. 4. The services provided are critical for the ongoing maintenance and modernization of a key naval asset.

Value Assessment

Rating: good

The contract's total value is $848,028,494 over its period of performance. Without specific benchmarks for similar engineering services on destroyer programs, a direct per-unit cost comparison is difficult. However, the value suggests a significant investment in specialized technical support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'limited' competition, suggesting that while not a sole-source, only a restricted number of bidders were considered. This approach can sometimes lead to less aggressive pricing compared to full and open competition.

Taxpayer Impact: The substantial value of this contract represents a significant allocation of taxpayer funds towards naval engineering services. The efficiency of the limited competition in achieving fair pricing is a key consideration for taxpayer impact.

Public Impact

Supports the operational readiness of the U.S. Navy's destroyer fleet. Ensures advanced engineering capabilities are available for critical shipbuilding and modernization programs. Contributes to the technological superiority of naval vessels. Impacts the defense industrial base and employment within the sector.

Waste & Efficiency Indicators

Waste Risk Score: 62 / 10

Warning Flags

Limited competition may not yield the best possible price.
Long contract duration (2442 days) could lead to cost overruns if not managed effectively.

Positive Signals

Award to a known, experienced contractor (Lockheed Martin).
Services are critical for a key naval asset (DDG-51 destroyers).
Clear period of performance defined.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting naval shipbuilding and maintenance. Spending in this area is often characterized by high complexity, specialized expertise, and significant contract values, driven by national defense requirements.

Small Business Impact

The data indicates this contract was awarded to Lockheed Martin Corporation, a large prime contractor. There is no explicit information regarding subcontracting opportunities for small businesses within this award notice.

Oversight & Accountability

The Department of the Navy, through NAVAL SEA SYSTEMS COMMAND, is responsible for overseeing this contract. The award notice provides basic details, but further oversight would involve monitoring performance, cost, and adherence to technical specifications.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Potential for price inflation due to limited competition.
Risk of scope creep over the extended contract period.
Dependency on a single large contractor for critical services.
Ensuring effective technology insertion over the contract's long duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.2 million to LOCKHEED MARTIN CORPORATION. 200206!021696!1700!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002400C5147 !A!N! !Y!P00002 !20011023!20060331!848028494!150049880!834951691!N!LOCKHEED MARTIN CORPORATION !199 BORTON LANDING ROAD !MOORESTOWN !NJ!08057!47850!005!34!MOORESTOWN !BURLINGTON !NEW JERSEY!+000000250000!Y!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A3 !SHIPS !2SCY!DESTROYER DDG-51 !541330!E! !3! ! !B! ! !99990909!B

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 $15.2 million.

What is the period of performance?

Start: 2001-10-23. End: 2008-06-30.

What specific engineering services are included in this $848M contract, and how do they directly contribute to the DDG-51 program's lifecycle?

The contract specifies 'ENGINEERING TECHNICAL SERVICES' for the 'DESTROYER DDG-51' program. These services likely encompass a broad range of activities including design support, systems integration, testing, maintenance planning, and potentially upgrades or modernization efforts. They are crucial for ensuring the continued operational effectiveness, safety, and technological relevance of the DDG-51 class throughout its service life.

Given the limited competition, what mechanisms are in place to ensure fair and reasonable pricing for these specialized engineering services?

While limited competition can reduce price discovery, the Department of Defense typically employs various methods to ensure fair pricing. This can include detailed cost analysis, review of historical pricing for similar services, negotiation of specific labor rates and overheads, and potentially requiring the contractor to justify their proposed costs based on established metrics and market data.

How does the long contract duration of over 6 years impact the government's ability to adapt to evolving technological requirements or budget constraints?

A long contract duration like 2442 days (approx. 6.7 years) provides stability for both the government and the contractor, allowing for long-term planning and execution of complex engineering tasks. However, it also presents a risk. The government may face challenges adapting to rapid technological advancements or unforeseen budget shifts during this period. Contract clauses for modifications, termination for convenience, or periodic reviews are essential to mitigate these risks.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 199 BORTON LANDING RD, MOORESTOWN, NJ, 08057

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

Contract Characteristics

Cost or Pricing Data: YES

Timeline