DoD's $42.2M Contract for Norwegian Frigate Support Raises Questions on Competition and Value
Contract Overview
Contract Amount: $42,218,838 ($42.2M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2007-07-01
End Date: 2015-02-28
Contract Duration: 2,799 days
Daily Burn Rate: $15.1K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: OPERATION AND MAINTENANCE OF A LIMITED IN-SERVICE SUPPORT PROGRAM FOR THE ROYAL NORWEGIAN NAVY (RNON) NORWEGIAN NEW FRIGATE (NNF) F310 CL PROGRAM. THESE EFFORTS INCLUDE SOFTWARE BASELINE DEVELOPMENT/MAINTENANCE, SOFTWARE MAINTENANCE MANAGEMENT, ENGINEERING SUPPORT, CONFIGURATION MANAGEMENT, LOGISTICS REPAIR, SPARES SUPPORT AND DIMINISHING MANUFACTURING SOURCES/MATERIAL SHORTAGES (DMS/MS).
Place of Performance
Location: MOORESTOWN, BURLINGTON County, NEW JERSEY, 08057
Plain-Language Summary
Department of Defense obligated $42.2 million to LOCKHEED MARTIN CORPORATION for work described as: OPERATION AND MAINTENANCE OF A LIMITED IN-SERVICE SUPPORT PROGRAM FOR THE ROYAL NORWEGIAN NAVY (RNON) NORWEGIAN NEW FRIGATE (NNF) F310 CL PROGRAM. THESE EFFORTS INCLUDE SOFTWARE BASELINE DEVELOPMENT/MAINTENANCE, SOFTWARE MAINTENANCE MANAGEMENT, ENGINEERING SUPPORT, CONFIGURATION… Key points: 1. The contract, awarded to Lockheed Martin Corporation, focuses on software and logistics support for the Royal Norwegian Navy's new frigate program. 2. Awarded as 'Not Available for Competition', this raises concerns about the lack of competitive bidding and potential impact on pricing. 3. The 'Cost Plus Fixed Fee' contract type can incentivize cost overruns, especially without competitive pressure. 4. The sector is Engineering Services, with a significant portion related to IT and specialized defense logistics.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee structure, combined with a lack of competition, makes a direct pricing assessment difficult. Without benchmarks from competing bids, it's hard to determine if the $42.2 million represents fair market value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was not available for competition, indicating a sole-source or limited source award. This significantly restricts price discovery and potentially leads to higher costs for the government and the end-user.
Taxpayer Impact: While this contract supports a foreign military sale, the lack of competition could set a precedent for higher costs in future similar arrangements, impacting overall defense spending efficiency.
Public Impact
Supports a key NATO ally's naval modernization efforts, enhancing interoperability and collective security. Ensures the operational readiness of advanced naval platforms through critical software and logistics support. The contract's duration (2007-2015) suggests a long-term commitment to maintaining complex defense systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus contract type
- Potential for cost overruns
Positive Signals
- Supports allied defense capabilities
- Focus on critical software maintenance
- Long-term support program
Sector Analysis
This contract falls within the Engineering Services sector, specifically supporting specialized defense systems. Benchmarks for similar international naval support contracts are difficult to ascertain due to the unique nature of the NNF F310 CL program and the limited competition.
Small Business Impact
The contract was awarded to Lockheed Martin Corporation, a large prime contractor. There is no indication of small business participation in the provided data, suggesting this was not a focus for this specific award.
Oversight & Accountability
The 'Not Available for Competition' status warrants further scrutiny to ensure the justification for limited competition was robust and that appropriate oversight was in place to manage costs and performance.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competitive bidding
- Potential for cost overruns due to CPFF structure
- Limited transparency on pricing justification
- No clear small business participation
Tags
engineering-services, department-of-defense, nj, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $42.2 million to LOCKHEED MARTIN CORPORATION. OPERATION AND MAINTENANCE OF A LIMITED IN-SERVICE SUPPORT PROGRAM FOR THE ROYAL NORWEGIAN NAVY (RNON) NORWEGIAN NEW FRIGATE (NNF) F310 CL PROGRAM. THESE EFFORTS INCLUDE SOFTWARE BASELINE DEVELOPMENT/MAINTENANCE, SOFTWARE MAINTENANCE MANAGEMENT, ENGINEERING SUPPORT, CONFIGURATION MANAGEMENT, LOGISTICS REPAIR, SPARES SUPPORT AND DIMINISHING MANUFACTURING SOURCES/MATERIAL SHORTAGES (DMS/MS).
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 $42.2 million.
What is the period of performance?
Start: 2007-07-01. End: 2015-02-28.
What was the specific justification for awarding this contract as 'Not Available for Competition'?
The justification for a 'Not Available for Competition' award typically stems from unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. For this contract, it likely relates to Lockheed Martin's specific role in the development or integration of the NNF frigate's systems, making them the sole viable provider for ongoing support and maintenance.
How does the Cost Plus Fixed Fee structure impact the government's risk in this contract?
The Cost Plus Fixed Fee (CPFF) structure shifts significant financial risk to the government. While the contractor receives a fixed fee, the government bears the cost of all allowable expenses. Without competitive pressure or strict cost controls, this structure can incentivize the contractor to incur higher costs, as their fee remains constant, potentially leading to budget overruns.
What is the long-term value proposition for the US taxpayer given this contract supports a foreign military sale?
The long-term value for US taxpayers is indirect. Supporting allied military readiness through Foreign Military Sales (FMS) strengthens alliances and enhances collective security, which indirectly benefits US national security interests. Furthermore, maintaining proficiency in supporting advanced naval systems can bolster the US defense industrial base and potentially lead to future opportunities.
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 AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp
Address: 199 BORTON LANDING RD, MOORESTOWN, NJ, 08057
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $43,095,846
Exercised Options: $43,095,846
Current Obligation: $42,218,838
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2007-07-01
Current End Date: 2015-02-28
Potential End Date: 2015-02-28 00:00:00
Last Modified: 2023-01-26
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