DoD Awards $972M for Destroyer Fire Control Equipment to Lockheed Martin

Contract Overview

Contract Amount: $972,439,591 ($972.4M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2002-12-01

End Date: 2019-05-31

Contract Duration: 6,025 days

Daily Burn Rate: $161.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200304!030707!1700!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002403C5115 !A!N! !N! !20021201!20120930!848028494!834951691!834951691!N!LOCKHEED MARTIN CORPORATION !199 BORTON LANDING ROAD !MOORESTOWN !NJ!08057!47850!005!34!MOORESTOWN !BURLINGTON !NEW JERSEY!+000047795899!N!N!000047795899!N012!INSTALLATION OF EQ/FIRE CONTROL EQUIPMENT !A7 !ELECTRONICS AND COMMUNICATION !2SCY!DESTROYER DDG-51 !541330!E! !3! ! ! ! ! !99990909!B! ! !A! !D!N!R!1!001!N!1A!Z!W!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: MOORESTOWN, BURLINGTON County, NEW JERSEY, 08057

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $972.4 million to LOCKHEED MARTIN CORPORATION for work described as: 200304!030707!1700!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002403C5115 !A!N! !N! !20021201!20120930!848028494!834951691!834951691!N!LOCKHEED MARTIN CORPORATION !199 BORTON LANDING ROAD !MOORESTOWN !NJ!08057!47850!005!34!MOORESTOWN !BURLI… Key points: 1. Significant contract value awarded to a single prime contractor. 2. Sole-source award raises questions about competition and price discovery. 3. Long contract duration (17 years) may indicate complex, evolving needs. 4. Focus on electronics and communication systems for naval vessels.

Value Assessment

Rating: concerning

The contract value of $972M over 17 years is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to similar systems or if it reflects fair market value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This was a sole-source award, meaning no other vendors were considered. This significantly limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The lack of competition in this large sole-source award likely results in a higher cost to taxpayers than a competitively bid contract.

Public Impact

Naval readiness and modernization efforts are supported by this award. Taxpayer funds are committed to advanced defense technology. Potential for long-term reliance on Lockheed Martin for this system. Impact on the defense electronics and communication sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Long contract duration
Lack of transparency in pricing
Potential for cost overruns

Positive Signals

Supports critical naval defense systems
Awarded to a known defense contractor

Sector Analysis

This contract falls within the Defense sector, specifically focusing on electronics and communication systems for naval vessels. Spending benchmarks for similar complex system installations are difficult to establish due to the specialized nature and sole-source award.

Small Business Impact

The data does not indicate any specific subcontracting goals or participation from small businesses. The prime contractor is a large corporation, suggesting limited direct opportunities for SMBs on the prime contract itself.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure the government is receiving fair value. Robust auditing and performance monitoring will be crucial throughout the contract's long duration.

Related Government Programs

Engineering Services
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Sole-source award limits competition.
Long contract duration increases risk of cost escalation.
Lack of transparency in pricing.
Potential for vendor lock-in.
Complexity of the system may lead to unforeseen issues.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $972.4 million to LOCKHEED MARTIN CORPORATION. 200304!030707!1700!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002403C5115 !A!N! !N! !20021201!20120930!848028494!834951691!834951691!N!LOCKHEED MARTIN CORPORATION !199 BORTON LANDING ROAD !MOORESTOWN !NJ!08057!47850!005!34!MOORESTOWN !BURLINGTON !NEW JERSEY!+000047795899!N!N!000047795899!N012!INSTALLATION OF EQ/FIRE CONTROL EQUIPMENT !A7 !ELECTRONICS AND COMMUNICATION !2SCY!DESTROYER DDG-51 !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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $972.4 million.

What is the period of performance?

Start: 2002-12-01. End: 2019-05-31.

What is the justification for the sole-source award, and were any alternatives explored?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Without further documentation, it's unclear if alternatives were thoroughly explored or if specific circumstances necessitated bypassing the competitive process. This lack of competition raises concerns about potential overpricing and reduced innovation.

How will the government ensure cost control and value for money over the 17-year contract term?

Given the long duration and sole-source nature, robust cost control mechanisms are essential. This includes detailed performance metrics, regular audits, and potentially incentive fee structures tied to cost savings or performance improvements. The government should actively manage the contract to prevent scope creep and ensure that pricing remains aligned with evolving market conditions and technological advancements.

What is the long-term strategic plan for maintaining and upgrading this fire control equipment?

The 17-year duration suggests a long-term commitment to this specific fire control system. Understanding the government's strategy for obsolescence management, upgrades, and potential future replacements is crucial. This includes assessing the contractor's roadmap for technological advancements and ensuring interoperability with future naval platforms and systems.

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 COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Contractor Details

Parent Company: Lockheed Martin Corp

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

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Timeline