DoD awards $112M for undersea vehicles, with Lockheed Martin securing the contract

Contract Overview

Contract Amount: $112,303,744 ($112.3M)

Contractor: Lockheed Martin Sippican, Inc.

Awarding Agency: Department of Defense

Start Date: 2005-02-07

End Date: 2013-02-06

Contract Duration: 2,921 days

Daily Burn Rate: $38.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MOD 2 TARGET UNDERSEA VEHICLE (TUV) TAS::17 1804::TAS

Place of Performance

Location: MARION, PLYMOUTH County, MASSACHUSETTS, 02738

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $112.3 million to LOCKHEED MARTIN SIPPICAN, INC. for work described as: MOD 2 TARGET UNDERSEA VEHICLE (TUV) TAS::17 1804::TAS Key points: 1. The contract value of $112.3 million over its period of performance suggests a significant investment in undersea vehicle technology. 2. Competition dynamics for this contract are not detailed, but the award type indicates a competitive process. 3. The firm-fixed-price contract type generally shifts risk to the contractor, potentially leading to more predictable costs. 4. The duration of the contract (over 8 years) implies a long-term need for these specialized vehicles. 5. The procurement falls under 'All Other Transportation Equipment Manufacturing,' indicating a niche but critical area of defense spending. 6. The contract was awarded to Lockheed Martin Sippican, Inc., a known entity in defense contracting.

Value Assessment

Rating: good

The total award of $112.3 million over approximately 8 years averages to about $14 million annually. Without specific unit details or comparable contract data, a precise value-for-money assessment is challenging. However, the firm-fixed-price structure suggests an effort to control costs. Benchmarking against similar advanced undersea vehicle procurements would be necessary for a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The presence of two bids suggests a degree of competition, though the exact number of solicitations and proposals is not specified. This level of competition is generally favorable for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: Full and open competition helps ensure taxpayer dollars are used efficiently by driving down prices through a competitive bidding process.

Public Impact

The primary beneficiaries are the U.S. Navy and other Department of Defense entities requiring advanced undersea vehicle capabilities for surveillance, reconnaissance, and potentially other mission sets. The services delivered include the manufacturing and potentially support of Unmanned Undersea Vehicles (UUVs) or similar systems. The geographic impact is national, supporting defense readiness across various operational theaters. Workforce implications include employment in specialized manufacturing and engineering roles within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to potential cost overruns if not managed tightly.
Reliance on a single contractor for a critical technology could pose supply chain risks.
The specific capabilities and performance metrics of the awarded vehicles are not detailed, making it hard to assess if they meet evolving threats.

Positive Signals

Firm-fixed-price contract type shifts cost risk to the contractor.
Full and open competition suggests a robust selection process.
Award to a known defense contractor like Lockheed Martin implies experience and established production capabilities.

Sector Analysis

This contract falls within the broader 'Transportation Equipment Manufacturing' sector, specifically focusing on specialized vehicles for defense applications. The market for advanced undersea vehicles is a niche but critical segment of the defense industrial base, characterized by high technological barriers to entry and significant R&D investment. Spending in this area is driven by evolving geopolitical threats and the need for sophisticated surveillance and operational capabilities.

Small Business Impact

The contract details indicate that small business participation was not a primary set-aside consideration (ss: false, sb: false). While Lockheed Martin Sippican, Inc. is the prime contractor, there is potential for subcontracting opportunities to small businesses within their supply chain. The extent of this subcontracting and its impact on the small business ecosystem would require further investigation into the contractor's subcontracting plan.

Oversight & Accountability

The contract is managed by the Defense Contract Management Agency (DCMA), which provides contract administration services to ensure compliance with terms and conditions. Oversight would typically involve monitoring performance, quality, and delivery schedules. Transparency is facilitated through contract databases like FPDS, though detailed performance metrics are often proprietary. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Unmanned Maritime Systems (UMS)
Naval Systems
Defense Manufacturing
Undersea Warfare Technology
Defense Procurement

Risk Flags

Long-term contract duration
Potential for technological obsolescence
Reliance on a single prime contractor for specialized equipment

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $112.3 million to LOCKHEED MARTIN SIPPICAN, INC.. MOD 2 TARGET UNDERSEA VEHICLE (TUV) TAS::17 1804::TAS

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN SIPPICAN, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $112.3 million.

What is the period of performance?

Start: 2005-02-07. End: 2013-02-06.

What is the specific type and capability of the MOD 2 TARGET UNDERSEA VEHICLE (TUV)?

The provided data does not specify the exact capabilities or model of the MOD 2 TARGET UNDERSEA VEHICLE (TUV). However, the designation 'Target Undersea Vehicle' suggests it could be used for training, testing, or simulating adversary undersea platforms. The contract's duration of over eight years and its firm-fixed-price nature indicate a need for a reliable and potentially advanced system. Further details on its payload, endurance, speed, and operational depth would be required to fully understand its role and technological sophistication within naval operations.

How does the $112.3 million award compare to historical spending on similar undersea vehicles by the DoD?

Comparing the $112.3 million award to historical spending requires access to detailed historical procurement data for similar undersea vehicles. Without specific comparable contract information (e.g., number of units, specific capabilities, contract type, and duration), a direct benchmark is difficult. However, the award represents a significant, multi-year investment. To provide context, one would need to analyze trends in DoD spending on UUVs, target drones, and other autonomous underwater systems over the past decade, looking at average contract values and quantities to determine if this award is within the expected range for such specialized defense assets.

What are the key performance indicators (KPIs) and success metrics for this contract?

The provided data does not explicitly list the Key Performance Indicators (KPIs) or success metrics for the MOD 2 TARGET UNDERSEA VEHICLE (TUV) contract. Typically, for defense procurements of this nature, KPIs would focus on aspects such as vehicle reliability (e.g., mean time between failures), operational availability, performance against specified mission parameters (e.g., speed, endurance, depth capabilities), adherence to delivery schedules, and compliance with quality standards. The firm-fixed-price nature of the contract implies that meeting these defined performance requirements within the agreed budget is a primary measure of success for the contractor.

What is Lockheed Martin Sippican, Inc.'s track record with similar undersea vehicle contracts?

Lockheed Martin Sippican, Inc. has a significant track record in developing and manufacturing naval systems, including undersea vehicles. They are known for producing various types of unmanned underwater vehicles (UUVs) and related technologies for the U.S. Navy and other defense customers. Their experience likely encompasses the design, production, testing, and sustainment of complex underwater systems. While specific details of past 'Target Undersea Vehicle' contracts are not provided here, their established presence in the defense sector suggests a capability to deliver on such requirements, though performance on individual contracts can vary.

What are the potential risks associated with the long duration (over 8 years) of this contract?

The long duration of this contract presents several potential risks. Firstly, technological obsolescence is a concern; undersea vehicle technology evolves rapidly, and a system procured today might be less effective against future threats by the end of the contract period. Secondly, cost escalation, despite the firm-fixed-price structure, can occur if unforeseen issues arise or if the initial cost estimates were inaccurate, potentially leading to contract modifications or disputes. Thirdly, maintaining contractor focus and performance over such an extended period can be challenging. Finally, there's a risk of supply chain disruptions or the contractor experiencing financial instability over the long term, impacting delivery schedules and support.

How does the 'All Other Transportation Equipment Manufacturing' NAICS code reflect the nature of this procurement?

The NAICS code 336999, 'All Other Transportation Equipment Manufacturing,' is a broad category that encompasses establishments primarily engaged in manufacturing transportation equipment not elsewhere classified. For this contract, it signifies that the undersea vehicles produced do not fit neatly into more specific categories like aircraft, motor vehicles, or shipbuilding. This suggests a specialized, niche product within the broader transportation equipment sector. It highlights the unique nature of defense-specific equipment that requires specialized manufacturing processes and expertise, differentiating it from mass-produced transportation goods.

Industry Classification

NAICS: Manufacturing › Other Transportation Equipment Manufacturing › All Other Transportation Equipment Manufacturing

Product/Service Code: WEAPONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 7 BARNABAS RD, MARION, MA, 02738

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $3,429,099,363

Exercised Options: $467,512,721

Current Obligation: $112,303,744

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline