DoD's $44.4M Lockheed Martin contract for AWD Combat Systems Engineering faces competition concerns
Contract Overview
Contract Amount: $44,438,772 ($44.4M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2009-06-30
End Date: 2010-08-31
Contract Duration: 427 days
Daily Burn Rate: $104.1K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: AUSTRALIAN AIR WARFARE DESTROYER (AWD) COMBAT SYSTEMS ENGINEERING AND COMPUTER PROGRAM DEVELOPMENT
Place of Performance
Location: MOORESTOWN, BURLINGTON County, NEW JERSEY, 08057
Plain-Language Summary
Department of Defense obligated $44.4 million to LOCKHEED MARTIN CORPORATION for work described as: AUSTRALIAN AIR WARFARE DESTROYER (AWD) COMBAT SYSTEMS ENGINEERING AND COMPUTER PROGRAM DEVELOPMENT Key points: 1. Contract awarded to Lockheed Martin Corporation for critical combat systems engineering. 2. Significant funding of $44.4M allocated for engineering and computer program development. 3. Contract type is Cost Plus Fixed Fee, indicating potential for cost overruns. 4. Limited competition due to 'NOT AVAILABLE FOR COMPETITION' status raises concerns. 5. No small business participation noted, impacting broader economic inclusion.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee structure, combined with a lack of readily available benchmark data for similar specialized engineering services, makes a definitive value assessment challenging. The $44.4M obligated amount requires careful scrutiny to ensure it aligns with the scope and complexity of the combat systems engineering.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was not available for competition, suggesting a sole-source or limited source award. This lack of competitive bidding likely resulted in less price discovery and potentially higher costs for the government compared to a fully competitive scenario.
Taxpayer Impact: The absence of competition may lead to taxpayers bearing a higher cost for these essential defense systems engineering services.
Public Impact
Impacts the capability and readiness of the Australian Air Warfare Destroyer program. Potential for cost overruns due to the Cost Plus Fixed Fee contract type. Lack of transparency in the procurement process due to limited competition. Missed opportunities for innovation and cost savings through competitive bidding.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition
- Cost Plus Fixed Fee contract type
- No small business participation
Positive Signals
- Awarded to a major defense contractor
- Addresses critical combat systems engineering needs
Sector Analysis
This contract falls within the Engineering Services sector, specifically related to defense systems. Benchmarks for similar complex combat systems development are often proprietary or highly specialized, making direct comparisons difficult. The $44.4M value is substantial for a single contract in this niche.
Small Business Impact
The contract explicitly states no small business participation (sb: false). This indicates a missed opportunity to engage smaller, innovative firms in the defense supply chain and potentially limits the diversity of solutions and economic benefits.
Oversight & Accountability
The 'NOT AVAILABLE FOR COMPETITION' status warrants further oversight to ensure the justification for limited competition was robust and that the pricing negotiated reflects fair and reasonable value, despite the lack of competitive pressure.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition
- Cost Plus Fixed Fee contract type
- Potential for cost overruns
- No small business involvement
- Limited transparency in pricing
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 $44.4 million to LOCKHEED MARTIN CORPORATION. AUSTRALIAN AIR WARFARE DESTROYER (AWD) COMBAT SYSTEMS ENGINEERING AND COMPUTER PROGRAM DEVELOPMENT
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 $44.4 million.
What is the period of performance?
Start: 2009-06-30. End: 2010-08-31.
What specific factors justified the 'NOT AVAILABLE FOR COMPETITION' status for this critical combat systems engineering contract?
The justification for 'NOT AVAILABLE FOR COMPETITION' typically involves unique capabilities, specialized knowledge, or urgent requirements that only a specific contractor can meet. For complex defense systems like the AWD combat suite, this could stem from proprietary technology, existing integration expertise, or critical program timelines where re-competition would cause unacceptable delays or risks.
How does the Cost Plus Fixed Fee (CPFF) structure impact the government's risk exposure and potential for cost overruns in this contract?
The CPFF structure shifts a significant portion of the cost risk to the government. While the contractor receives a fixed fee, the government bears the actual costs incurred. This can incentivize cost overruns if not managed stringently, as the contractor's profit (the fee) remains constant regardless of the final project cost, potentially leading to higher overall expenditures than anticipated.
What is the long-term strategic value of awarding this contract solely to Lockheed Martin for the AWD combat systems?
The long-term strategic value hinges on Lockheed Martin's ability to deliver a highly integrated and effective combat system that meets the demanding requirements of the Australian Air Warfare Destroyer. While potentially ensuring continuity and leveraging existing expertise, this sole-source approach limits opportunities for competitive innovation and could create vendor lock-in, impacting future upgrades or alternative solutions.
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
Address: 199 BORTON LANDING RD, MOORESTOWN, NJ, 08057
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $44,910,868
Exercised Options: $44,910,868
Current Obligation: $44,438,772
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2009-06-30
Current End Date: 2010-08-31
Potential End Date: 2010-08-31 00:00:00
Last Modified: 2024-07-12
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