Naval Sea Systems Command awards $94.2M contract for electronics and communication systems to Lockheed Martin

Contract Overview

Contract Amount: $30,850,090 ($30.9M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2003-05-30

End Date: 2007-07-22

Contract Duration: 1,514 days

Daily Burn Rate: $20.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS INCENTIVE

Sector: Defense

Official Description: 200312!035010!1700!BZ006 !NAVAL SEA SYSTEMS COMMAND !N0002403C6308 !A!N! !N! !20030530!20080530!942512757!942512757!834951691!N!LOCKHEED MARTIN CORPORATION !100 E 17TH STREET !RIVIERA BEACH !FL!33404!60975!099!12!RIVIERA BEACH !PALM BEACH !FLORIDA !+000006750000!N!N!000000000000!1906!MINELAYERS AND MINESWEEPERS !A7 !ELECTRONICS AND COMMUNICATION !2000!NOT DISCERNABLE OR CLASSIFIED !335999!E! !3! ! ! ! ! !99990909!B! ! !B! !A!N!V!2!002!B! !Z!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: WEST PALM BEACH, PALM BEACH County, FLORIDA, 33404

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $30.9 million to LOCKHEED MARTIN CORPORATION for work described as: 200312!035010!1700!BZ006 !NAVAL SEA SYSTEMS COMMAND !N0002403C6308 !A!N! !N! !20030530!20080530!942512757!942512757!834951691!N!LOCKHEED MARTIN CORPORATION !100 E 17TH STREET !RIVIERA BEACH !FL!33404!60975!099!12!RIVIERA BEACH !PALM … Key points: 1. Contract awarded for electronics and communication systems, indicating a need for advanced naval technology. 2. The contract value of $94.2M suggests a significant investment in naval defense capabilities. 3. Lockheed Martin, a major defense contractor, secured this award, highlighting its role in the sector. 4. The contract duration of approximately 4 years points to a substantial project timeline. 5. The 'Electronics and Communication' product service code suggests a focus on sophisticated naval systems. 6. Awarded under full and open competition, implying a competitive bidding process.

Value Assessment

Rating: good

The contract value of $94.2 million for electronics and communication systems appears reasonable given the nature of naval defense procurement. Benchmarking against similar contracts for complex electronic systems on naval vessels would provide a more precise value assessment. However, the duration of the contract (over 4 years) suggests a significant scope of work, which can justify the overall cost.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of two bids suggests a moderately competitive environment. While not a large number of bidders, full and open competition generally promotes price discovery and can lead to more favorable pricing for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: The full and open competition process for this contract likely resulted in a more competitive price for taxpayers, as multiple companies vied for the award.

Public Impact

The U.S. Navy benefits from enhanced electronics and communication systems for its vessels. Services delivered include the provision and integration of advanced electronic and communication equipment. The geographic impact is primarily within the United States, supporting naval operations and defense infrastructure. The contract supports jobs within Lockheed Martin and its supply chain, particularly in specialized electronics manufacturing and integration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns in complex electronics integration projects.
Dependence on a single prime contractor (Lockheed Martin) for critical systems.
Risk of technological obsolescence if systems are not adaptable to future upgrades.

Positive Signals

Awarded through full and open competition, suggesting competitive pricing.
Lockheed Martin has a strong track record in defense contracting.
The contract addresses a critical need for modern naval communication and electronics.

Sector Analysis

This contract falls within the broader defense electronics sector, a significant segment of the aerospace and defense industry. The market for naval electronics and communication systems is characterized by high barriers to entry due to specialized technology requirements and stringent performance standards. Spending in this area is driven by ongoing modernization efforts and the need to maintain a technological edge in naval warfare. Comparable spending benchmarks would typically involve other major naval platform upgrades or system procurements.

Small Business Impact

There is no explicit indication of a small business set-aside for this contract. Given the prime contractor is Lockheed Martin, a large corporation, the primary impact on small businesses would likely be through subcontracting opportunities. The extent of small business participation would depend on Lockheed Martin's subcontracting plan and the availability of qualified small businesses for specific components or services.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), ensuring compliance with contract terms, quality standards, and delivery schedules. Accountability measures are embedded in the contract's performance requirements and payment terms. Transparency is facilitated through contract databases and reporting requirements, although specific technical details may be classified or proprietary.

Related Government Programs

Naval Ship Systems
Defense Electronics Procurement
Military Communication Systems
Naval Warfare Technology

Risk Flags

Potential for cost growth
Integration complexity
Technological obsolescence risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.9 million to LOCKHEED MARTIN CORPORATION. 200312!035010!1700!BZ006 !NAVAL SEA SYSTEMS COMMAND !N0002403C6308 !A!N! !N! !20030530!20080530!942512757!942512757!834951691!N!LOCKHEED MARTIN CORPORATION !100 E 17TH STREET !RIVIERA BEACH !FL!33404!60975!099!12!RIVIERA BEACH !PALM BEACH !FLORIDA !+000006750000!N!N!000000000000!1906!MINELAYERS AND MINESWEEPERS !A7 !ELECTRONICS AND COMMUNICATION !2000!NOT DISCERNABLE OR CLASSIFIED !335999!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 $30.9 million.

What is the period of performance?

Start: 2003-05-30. End: 2007-07-22.

What is Lockheed Martin's track record with similar naval electronics contracts?

Lockheed Martin has an extensive and generally strong track record with naval electronics and communication systems contracts. As one of the largest defense contractors globally, the company has been involved in numerous complex programs for the U.S. Navy and other allied navies, including combat systems integration, sonar systems, radar, and communication suites. While specific performance metrics for past contracts are not detailed here, their consistent selection for major naval programs suggests a high level of capability and reliability. However, like many large defense projects, some contracts may have experienced cost or schedule adjustments, which is common in highly technical and evolving fields.

How does the $94.2 million contract value compare to other naval electronics procurements?

The $94.2 million contract value for electronics and communication systems is a substantial but not extraordinary amount within the context of major naval procurements. Large naval vessels, such as destroyers, aircraft carriers, or submarines, often involve electronics and combat systems contracts ranging from tens of millions to several billion dollars. This particular contract, awarded to Lockheed Martin, likely represents a significant upgrade or new system installation for a specific class of naval assets. To provide a precise comparison, one would need to analyze contracts for similar systems (e.g., integrated bridge systems, electronic warfare suites, communication networks) on comparable naval platforms, considering factors like system complexity, technology generation, and contract duration.

What are the primary risks associated with this type of contract?

The primary risks associated with this contract include technological obsolescence, integration challenges, and potential cost overruns. Naval electronics are subject to rapid technological advancement, meaning the systems procured today could be outdated relatively quickly. Integrating complex electronic and communication systems onto naval platforms is inherently challenging, requiring precise engineering and testing to ensure interoperability and reliability in harsh maritime environments. Cost overruns are a common risk in large defense contracts due to unforeseen technical difficulties, scope creep, or changes in material costs. Furthermore, reliance on a single prime contractor like Lockheed Martin introduces program risk if the contractor faces financial difficulties or performance issues.

How effective are 'full and open competition' contracts in ensuring value for money in defense?

Full and open competition is generally considered the most effective method for ensuring value for money in defense contracting. By allowing all responsible sources to submit bids, it fosters a competitive environment that drives down prices and encourages innovation. The government can compare multiple proposals based on technical merit, past performance, and price, selecting the best overall value. However, the effectiveness can be diminished if the solicitation requirements are overly restrictive, if potential bidders lack the necessary capabilities, or if the evaluation process is flawed. For complex systems like naval electronics, ensuring that all bidders truly understand the technical requirements and can deliver the necessary performance is crucial for realizing the full benefits of competition.

What is the historical spending trend for naval electronics and communication systems?

Historical spending on naval electronics and communication systems has generally trended upwards, driven by continuous modernization efforts, the need to counter evolving threats, and the increasing complexity of naval platforms. The U.S. Navy consistently allocates significant portions of its budget to acquiring and upgrading electronic warfare systems, communication networks, radar, sonar, and command and control systems. Factors influencing this trend include geopolitical dynamics, technological advancements (e.g., AI, cyber capabilities, advanced sensors), and the lifecycle replacement of aging systems. While specific year-over-year figures fluctuate based on program cycles and budget appropriations, the overall investment in this domain remains a high priority for naval readiness and technological superiority.

Industry Classification

NAICS: Manufacturing › Other Electrical Equipment and Component Manufacturing › All Other Miscellaneous Electrical Equipment and Component Manufacturing

Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST PLUS INCENTIVE (V)

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 100 E 17TH STREET, RIVIERA BEACH, FL, 90

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

Contract Characteristics

Cost or Pricing Data: NO

Timeline