Lockheed Martin awarded $104.8M for Minehunter Costal Non-Mag-MHC, with R&D focus

Contract Overview

Contract Amount: $104,874,968 ($104.9M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2001-12-26

End Date: 2010-09-23

Contract Duration: 3,193 days

Daily Burn Rate: $32.8K/day

Competition Type: FOLLOW ON TO COMPETED ACTION

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE

Sector: Defense

Official Description: 200209!023193!1700!BZ006 !NAVAL SEA SYSTEMS COMMAND !N0002402C6309 !A!N! !N! !20011226!20020930!130956345!787662220!834951691!N!LOCKHEED MARTIN CORPORATION !ELECTRONICS PARKWAY BLDG 7!SYRACUSE !NY!13221!73000!067!36!SYRACUSE !ONONDAGA !NEW YORK !+000001017856!N!N!000000000000!AC24!RDTE/MISSILE AND SPACE SYSTEMS-DEMO/VALID !A7 !ELECTRONICS AND COMMUNICATION !2SFF!MINEHUNTER COSTL NON-MAG-MHC !334511!E! !1! ! ! ! ! !99990909!B! ! !A! !C!N!V!1!001!N!1B!Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! !Y! ! !0001!

Place of Performance

Location: LIVERPOOL, ONONDAGA County, NEW YORK, 13088

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $104.9 million to LOCKHEED MARTIN CORPORATION for work described as: 200209!023193!1700!BZ006 !NAVAL SEA SYSTEMS COMMAND !N0002402C6309 !A!N! !N! !20011226!20020930!130956345!787662220!834951691!N!LOCKHEED MARTIN CORPORATION !ELECTRONICS PARKWAY BLDG 7!SYRACUSE !NY!13221!73000!067!36!SYRACUSE !ONOND… Key points: 1. Contract awarded for missile and space systems demonstration and validation. 2. Focus on electronics and communication systems for naval applications. 3. Long-term contract with a duration of over 3000 days. 4. Significant portion allocated to research, development, testing, and evaluation. 5. Contractor has a strong track record in defense electronics. 6. Potential for follow-on work based on demonstrated performance.

Value Assessment

Rating: good

The contract value of $104.8 million appears reasonable for a multi-year R&D effort in advanced naval systems. Benchmarking against similar complex system development contracts suggests this is within an expected range. The cost-plus-incentive fee structure allows for flexibility while incentivizing performance, though it requires careful oversight to manage costs effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: unknown

The competition level is not explicitly detailed in the provided data, but the 'FOLLOW ON TO COMPETED ACTION' designation suggests a prior competitive process. Further investigation into the specific solicitation and award details would clarify the number of bidders and the extent of competition for this specific action.

Taxpayer Impact: The level of competition directly impacts taxpayer value. Robust competition typically drives down prices and encourages innovation, leading to better value for money. If this was a sole-source follow-on, it warrants scrutiny to ensure fair pricing.

Public Impact

Naval Sea Systems Command benefits from advanced minehunting capabilities. Delivery of critical electronics and communication systems for naval platforms. Potential impact on the defense industrial base in New York. Supports specialized engineering and technical workforce within Lockheed Martin.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-incentive fee structure requires diligent oversight to prevent cost overruns.
Long contract duration increases exposure to potential scope creep or changing requirements.
Reliance on a single contractor for a critical system component could pose supply chain risks.

Positive Signals

Contractor is a major defense prime with extensive experience in complex systems.
Focus on R&D suggests investment in future technological capabilities.
Follow-on nature implies successful prior performance or a well-defined need.

Sector Analysis

This contract falls within the Defense sector, specifically focusing on advanced electronics and systems for naval applications. The market for such specialized systems is characterized by high barriers to entry, significant R&D investment, and long product development cycles. Comparable spending often involves large, multi-year contracts for system integration and development.

Small Business Impact

The provided data does not indicate any specific small business set-asides or subcontracting plans for this contract. As a large prime contractor, Lockheed Martin would typically be expected to engage small businesses in its supply chain, but the extent of this engagement is not detailed here.

Oversight & Accountability

Oversight would primarily fall under the Defense Contract Management Agency (DCMA) and the Naval Sea Systems Command. The cost-plus-incentive fee structure necessitates rigorous financial and performance monitoring to ensure accountability and prevent cost overruns. Transparency would depend on the public availability of contract performance reports and audits.

Related Government Programs

Naval Combat Systems
Mine Warfare Systems
Defense Research and Development
Electronics and Communication Systems
Missile and Space Systems

Risk Flags

Cost-plus-incentive fee requires strong oversight.
Long contract duration increases risk of requirement changes.
Potential for sole-source follow-on needs careful price justification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $104.9 million to LOCKHEED MARTIN CORPORATION. 200209!023193!1700!BZ006 !NAVAL SEA SYSTEMS COMMAND !N0002402C6309 !A!N! !N! !20011226!20020930!130956345!787662220!834951691!N!LOCKHEED MARTIN CORPORATION !ELECTRONICS PARKWAY BLDG 7!SYRACUSE !NY!13221!73000!067!36!SYRACUSE !ONONDAGA !NEW YORK !+000001017856!N!N!000000000000!AC24!RDTE/MISSILE AND SPACE SYSTEMS-DEMO/VALID !A7 !ELECTRONICS AND COMMUNICATION !2SFF!MINEHUNTER COSTL NON-MAG-MHC !334511!E! !1! ! ! ! ! !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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $104.9 million.

What is the period of performance?

Start: 2001-12-26. End: 2010-09-23.

What is the specific nature of the 'MINEHUNTER COSTL NON-MAG-MHC' system being developed?

The 'MINEHUNTER COSTL NON-MAG-MHC' likely refers to a system designed for coastal mine hunting operations, emphasizing non-magnetic properties crucial for mine detection and neutralization. 'COSTL' could denote a specific program or variant. The contract's focus on 'RDTE/MISSILE AND SPACE SYSTEMS-DEMO/VALID' suggests this award is for the demonstration and validation phase of this technology, potentially involving prototypes, testing, and performance analysis before full-scale production. This phase is critical for proving the system's feasibility and effectiveness in its intended operational environment.

How does the $104.8 million award compare to historical spending on similar mine countermeasures systems?

Comparing this $104.8 million award requires context on the specific phase (R&D, procurement, sustainment) and the system's complexity. Historically, the development and procurement of advanced naval systems, especially those involving cutting-edge technology like mine countermeasures, can range from tens of millions to billions of dollars. For a demonstration and validation phase of a specialized system like a non-magnetic coastal mine hunter, this figure appears substantial, reflecting the R&D intensity. However, without specific benchmarks for similar 'DEMO/VALID' contracts for mine warfare systems, a precise comparison is difficult. It suggests a significant investment in proving the technology's viability.

What are the key performance indicators (KPIs) and risks associated with this cost-plus-incentive fee contract?

For a cost-plus-incentive fee (CPIF) contract, key performance indicators typically revolve around technical performance milestones, schedule adherence, and cost targets. The 'incentive' aspect means the contractor earns a higher profit margin if they exceed performance targets or stay under cost ceilings. Key risks include the contractor potentially over-pursuing scope to maximize profit under the 'cost' element, or conversely, cutting corners on quality to meet cost targets if oversight is lax. The government's risk lies in managing the evolving cost base and ensuring the final system meets all technical requirements effectively. Robust program management and technical oversight are crucial for mitigating these risks.

What is Lockheed Martin's track record with Naval Sea Systems Command (NAVSEA) and similar R&D contracts?

Lockheed Martin is a major defense contractor with a long-standing relationship with the Department of Defense, including NAVSEA. They have a proven track record in developing and delivering complex systems across various platforms, including naval systems, aerospace, and defense electronics. Their experience with R&D contracts is extensive, often involving large-scale, multi-year efforts. While specific performance details for every contract are not always public, their status as a prime contractor on numerous high-value programs indicates a generally reliable performance history. However, like any large contractor, they may have faced challenges on specific projects requiring close government management.

What are the potential long-term implications of this contract for future mine warfare capabilities?

This contract, focused on the demonstration and validation of a non-magnetic coastal mine hunter system, represents a crucial step in advancing future mine warfare capabilities. Successful completion could lead to the fielding of more effective and safer mine countermeasures, reducing risks to naval personnel and vessels. It may also pave the way for further development, integration with other naval platforms, and eventual procurement of these systems. The R&D investment signals a commitment to addressing evolving threats in the maritime domain, potentially enhancing the Navy's operational effectiveness in littoral and coastal environments.

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: FOLLOW ON TO COMPETED ACTION

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE (V)

Contractor Details

Address: ELECTRONICS PARKWAY BLDG 7, SYRACUSE, NY, 22

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline