DoD awards $177M+ for aeronautical instrument manufacturing, with Lockheed Martin as prime contractor

Contract Overview

Contract Amount: $177,396,160 ($177.4M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2002-06-28

End Date: 2013-01-22

Contract Duration: 3,861 days

Daily Burn Rate: $45.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE AWARD FEE

Sector: Defense

Place of Performance

Location: LIVERPOOL, ONONDAGA County, NEW YORK, 13088

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $177.4 million to LOCKHEED MARTIN CORPORATION for work described as: Key points: 1. Contract value exceeds $177 million over its duration. 2. The contract was awarded through full and open competition. 3. Lockheed Martin Corporation is the sole prime contractor. 4. The contract spans over 9 years, indicating a long-term need. 5. The award type is Fixed Price Award Fee, suggesting performance incentives. 6. The North American Industry Classification System (NAICS) code is 334511, related to instrument manufacturing.

Value Assessment

Rating: fair

The contract value of over $177 million for a 9-year period for aeronautical instrument manufacturing appears substantial. Benchmarking this against similar long-term, complex system procurements would be necessary for a definitive value assessment. The Fixed Price Award Fee structure suggests an attempt to control costs while incentivizing performance, but the ultimate value depends heavily on the awarded fees and the contractor's efficiency. Without specific details on the instruments or systems procured, a precise comparison to market rates 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 all responsible sources were permitted to submit bids. The data does not specify the number of bidders, which is crucial for understanding the intensity of the competition. A robust competition typically leads to better pricing and innovation for the government. The absence of this detail limits the assessment of price discovery effectiveness.

Taxpayer Impact: A full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down costs and improve the quality of goods and services received.

Public Impact

The Department of Defense is the primary beneficiary, receiving critical aeronautical instruments. This contract supports the manufacturing and supply of specialized navigation, guidance, and search systems. The geographic impact is centered in New York, where the contractor is located. The contract likely supports a workforce involved in advanced manufacturing and engineering within the aerospace sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific details on the number of bidders limits the assessment of competitive pressure.
The long duration of the contract could introduce risks related to technological obsolescence or changing requirements.
The Fixed Price Award Fee structure requires careful monitoring to ensure fair pricing and prevent cost overruns.
No information is provided on small business subcontracting, which could be a missed opportunity for smaller enterprises.

Positive Signals

Awarded through full and open competition, suggesting a broad search for the best value.
The use of a Fixed Price Award Fee contract indicates an effort to balance cost control with performance incentives.
Lockheed Martin is a well-established defense contractor with significant experience in this sector.
The contract's long duration suggests a stable, long-term requirement for critical defense systems.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on instruments for navigation, guidance, and search systems. This is a highly specialized and technologically advanced segment of the manufacturing industry, characterized by significant R&D investment and stringent quality requirements. Comparable spending benchmarks would likely involve other large-scale, long-term procurements of complex electronic and mechanical systems for military applications, often involving sole-source or limited competition due to unique technical capabilities.

Small Business Impact

The data indicates that small business participation was not a specific set-aside (ss: false, sb: false). This suggests that the primary competition was not geared towards small businesses. While Lockheed Martin is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors. However, without specific subcontracting plans or data, the direct impact on the small business ecosystem is unclear, and it represents a potential area for further investigation regarding set-aside utilization.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contract management and administration processes, potentially involving the Defense Contract Management Agency (DCMA) given the agency's role. Accountability measures are embedded within the Fixed Price Award Fee structure, linking payment to performance. Transparency is generally facilitated through contract award databases, though detailed performance metrics and fee structures may not always be publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Aeronautical Systems Manufacturing
Navigation and Guidance Systems
Defense Electronics Procurement
Aerospace Instrument Development
Military Search and Detection Equipment

Risk Flags

Potential for technological obsolescence due to long contract duration.
Lack of specific bidder count limits assessment of competition effectiveness.
Award Fee structure requires careful government oversight to ensure fair value.
No explicit mention of small business subcontracting goals.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $177.4 million to LOCKHEED MARTIN CORPORATION. See the official description on USAspending.

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 $177.4 million.

What is the period of performance?

Start: 2002-06-28. End: 2013-01-22.

What specific types of aeronautical instruments are being procured under this contract?

The provided data indicates the contract falls under NAICS code 334511, which covers 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing.' This suggests the procurement involves sophisticated systems critical for military aircraft operations. Examples could include advanced radar systems, inertial navigation units, flight control computers, electronic warfare systems, or specialized sensors for reconnaissance and targeting. The exact nature of the instruments would be detailed in the contract's statement of work, which is not publicly available in this data extract. Understanding the specific instruments is key to assessing their technological relevance and the necessity of a long-term contract.

How does the $177 million contract value compare to historical spending on similar systems by the DoD?

Comparing the $177 million contract value requires context regarding the specific systems procured and their complexity. For long-term procurements of advanced aeronautical instruments, this figure may represent a reasonable investment over a nearly decade-long period, especially if it covers research, development, production, and sustainment. However, without knowing the exact nature of the instruments, it's difficult to benchmark against historical spending. If these are mature, mass-produced components, the value might be high. If they represent cutting-edge technology or encompass significant integration and support, it could be competitive. A detailed analysis would involve examining spending trends for comparable systems and contractors over similar timeframes.

What are the key performance metrics and award fee criteria for this Fixed Price Award Fee contract?

The specific performance metrics and award fee criteria for this Fixed Price Award Fee contract are not detailed in the provided data. Typically, for such contracts, metrics would relate to delivery schedules, quality standards (e.g., defect rates), technical performance (e.g., system reliability, accuracy), and adherence to specifications. The 'Award Fee' component means that a portion of the total potential contract value is contingent upon the contractor exceeding minimum performance requirements, as determined by the government. The government would evaluate the contractor's performance against pre-defined criteria, and a fee would be awarded based on that evaluation. Without these specifics, it's impossible to fully assess the incentive structure and its potential impact on value for money.

What is Lockheed Martin's track record with the Department of Defense for similar types of contracts?

Lockheed Martin Corporation is a major defense contractor with an extensive history of performing complex, high-value contracts for the Department of Defense across various domains, including aeronautics, electronics, and systems integration. They have a well-established track record in manufacturing sophisticated systems, including those related to navigation, guidance, and detection. While specific performance details for this particular contract are not available, Lockheed Martin's general reputation and experience suggest a high likelihood of technical capability. However, past performance on similar contracts, including any issues related to cost overruns, schedule delays, or quality problems, would be a critical factor in a comprehensive risk assessment.

Given the 9-year duration, what are the potential risks associated with technological obsolescence or changing military requirements?

A contract duration of 3861 days (approximately 9 years) inherently carries risks related to technological obsolescence and evolving military requirements. Technology in the aerospace and defense sector can advance rapidly. By the end of this contract period, the instruments procured might be based on technology that is no longer state-of-the-art, potentially impacting their effectiveness or interoperability with newer systems. Similarly, military strategies, threats, and operational needs can shift significantly over nearly a decade. This could render the procured systems less relevant or require costly modifications. Mitigation strategies often include incorporating technology refresh clauses, modular designs, and regular reviews to adapt the contract to changing circumstances, though the effectiveness of these depends on the contract's specific terms.

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: SHIP AND MARINE EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 1

Pricing Type: FIXED PRICE AWARD FEE (M)

Contractor Details

Address: ELECTRONICS PARKWAY BLDG 7, SYRACUSE, NY, 13221

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $229,812,152

Exercised Options: $229,812,152

Current Obligation: $177,396,160

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline