Navy Awards $210M Contract to Lockheed Martin for AEGIS Ship Development

Contract Overview

Contract Amount: $210,311,213 ($210.3M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2003-03-28

End Date: 2009-07-08

Contract Duration: 2,294 days

Daily Burn Rate: $91.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: IT

Official Description: 200307!034349!1700!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002403C5101 !A!N! !N! !20030328!20080308!848028494!834951691!834951691!N!LOCKHEED MARTIN CORPORATION !199 BORTON LANDING ROAD !MOORESTOWN !NJ!08057!47850!005!34!MOORESTOWN !BURLINGTON !NEW JERSEY!+000028896405!Y!N!000164200000!AC35!RDTE/SHIPS-ENG/MANUF DEVELOP !A3 !SHIPS !2CNZ!CG-47 AEGIS !541330!E! !3! ! ! ! ! !99990909!B! ! !A! !C!Y!R!1!001!N!1A!Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!* !A!D!N! ! ! ! ! ! !0001! !

Place of Performance

Location: MOORESTOWN, BURLINGTON County, NEW JERSEY, 08057

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $210.3 million to LOCKHEED MARTIN CORPORATION for work described as: 200307!034349!1700!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002403C5101 !A!N! !N! !20030328!20080308!848028494!834951691!834951691!N!LOCKHEED MARTIN CORPORATION !199 BORTON LANDING ROAD !MOORESTOWN !NJ!08057!47850!005!34!MOORESTOWN !BURLI… Key points: 1. The contract is for research, development, testing, and evaluation (RDTE) related to the AEGIS Combat System. 2. Lockheed Martin is the sole awardee, indicating a non-competitive procurement. 3. The contract duration is over 5 years, suggesting a long-term development effort. 4. The primary sector is IT and Defense, focusing on advanced combat systems.

Value Assessment

Rating: fair

The contract value is $210,311,213. Without detailed cost breakdowns or benchmarks for similar AEGIS development phases, a precise value assessment is difficult. However, the cost-plus award fee structure suggests potential for cost overruns if not managed tightly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning competition was not sought. This limits price discovery and may result in higher costs than if multiple vendors had competed.

Taxpayer Impact: Taxpayers may bear a higher cost due to the lack of competition, as the government did not leverage market forces to secure the best possible price.

Public Impact

Enhances naval defense capabilities through advanced AEGIS system development. Supports high-tech jobs in engineering and manufacturing within the defense sector. Ensures the U.S. Navy maintains a technological edge in maritime warfare.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and potentially increases cost.
Cost-plus award fee structure can incentivize spending.
Long contract duration increases exposure to potential scope creep or changing requirements.

Positive Signals

Award to a prime contractor with established expertise in AEGIS.
Focus on critical RDTE for national security.
Potential for technological advancements in naval warfare.

Sector Analysis

This contract falls within the Defense sector, specifically focusing on IT and engineering services for naval combat systems. Spending in this area is critical for maintaining military readiness and technological superiority, with significant government investment typically allocated to advanced platforms like AEGIS.

Small Business Impact

The data does not indicate any subcontracting goals or participation from small businesses in this sole-source award. The primary contractor, Lockheed Martin, is a large aerospace and defense corporation.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure the contractor is meeting all performance requirements and that costs are reasonable and justified. The cost-plus award fee structure necessitates diligent monitoring of expenditures and performance metrics.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competition
Cost-plus award fee structure
Potential for cost overruns
Long contract duration
Limited transparency on specific R&D objectives

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $210.3 million to LOCKHEED MARTIN CORPORATION. 200307!034349!1700!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002403C5101 !A!N! !N! !20030328!20080308!848028494!834951691!834951691!N!LOCKHEED MARTIN CORPORATION !199 BORTON LANDING ROAD !MOORESTOWN !NJ!08057!47850!005!34!MOORESTOWN !BURLINGTON !NEW JERSEY!+000028896405!Y!N!000164200000!AC35!RDTE/SHIPS-ENG/MANUF DEVELOP !A3 !SHIPS !2CNZ!CG-47 AEGIS !541330!E! !3! ! ! ! ! !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 $210.3 million.

What is the period of performance?

Start: 2003-03-28. End: 2009-07-08.

What specific technological advancements are expected from this RDTE funding for the AEGIS system?

The contract focuses on research, development, testing, and evaluation for the AEGIS Combat System. Specific advancements are not detailed in the provided data but typically involve upgrades to radar capabilities, missile defense integration, electronic warfare enhancements, and improved command and control functionalities to counter evolving threats.

What are the risks associated with a sole-source, cost-plus award fee contract for long-term R&D?

Sole-source awards eliminate competitive pressure, potentially leading to higher prices and less innovation. Cost-plus contracts can incentivize spending rather than cost control, especially when coupled with an award fee structure that might be influenced by subjective performance assessments. Long durations increase the risk of scope creep and misalignment with evolving strategic needs.

How does this contract contribute to the overall effectiveness and modernization of the U.S. Navy's fleet?

This contract is crucial for the continued modernization and effectiveness of the U.S. Navy's AEGIS-equipped fleet. AEGIS is a cornerstone of naval air and missile defense. Ongoing RDTE ensures the system remains capable of countering advanced threats, thereby maintaining the fleet's operational readiness and strategic advantage at sea.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 199 BORTON LANDING ROAD, MOORESTOWN, NJ, 03

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline