DoD's $1.69B SEWIP Block 2 Contract with Lockheed Martin: A Deep Dive
Contract Overview
Contract Amount: $168,791,300 ($168.8M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2009-09-30
End Date: 2016-01-31
Contract Duration: 2,314 days
Daily Burn Rate: $72.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: PRE DESIGN AN/SLQ-32X(V) SEWIP BLOCK 2
Place of Performance
Location: LIVERPOOL, ONONDAGA County, NEW YORK, 13088
State: New York Government Spending
Plain-Language Summary
Department of Defense obligated $168.8 million to LOCKHEED MARTIN CORPORATION for work described as: PRE DESIGN AN/SLQ-32X(V) SEWIP BLOCK 2 Key points: 1. The contract for the AN/SLQ-32X(V) SEWIP Block 2, awarded to Lockheed Martin, represents a significant investment in naval electronic warfare capabilities. 2. While Lockheed Martin is a major defense contractor, the specific nature of SEWIP Block 2 might involve specialized components or integration challenges, potentially limiting direct competition. 3. Key risks include potential cost overruns common in complex defense systems and the long-term sustainment costs of advanced electronic warfare technology. 4. This spending falls within the broader Defense sector, specifically focusing on advanced electronic warfare systems crucial for naval operations.
Value Assessment
Rating: fair
The contract type is Cost Plus Incentive Fee, which can lead to cost overruns if not managed tightly. Benchmarking against similar complex electronic warfare system development contracts is difficult due to the specialized nature of SEWIP Block 2.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the specific technical requirements and the established nature of the SEWIP program may have favored incumbent or specialized bidders.
Taxpayer Impact: Taxpayer funds are allocated to enhance naval defense capabilities, aiming for technological superiority in electronic warfare, which is a critical national security interest.
Public Impact
Enhances U.S. Navy's electronic warfare capabilities, providing critical threat detection and response systems. Supports advanced technological development in a highly specialized defense sector. Ensures operational readiness and strategic advantage for naval forces. Represents a significant portion of the budget allocated to naval modernization and defense systems.
Waste & Efficiency Indicators
Waste Risk Score: 75 / 10
Warning Flags
- Cost Plus Incentive Fee contract type can incentivize higher costs.
- Long duration of contract performance (2314 days) increases risk of cost escalation.
- Lack of specific performance metrics in provided data makes value assessment challenging.
Positive Signals
- Awarded under full and open competition.
- Addresses a critical national security need for electronic warfare.
- Involves a major defense contractor with established expertise.
Sector Analysis
This contract falls under the Defense sector, specifically focusing on advanced electronic warfare systems. Spending benchmarks for similar complex, integrated naval systems are typically in the hundreds of millions to billions of dollars, reflecting the high R&D and manufacturing costs.
Small Business Impact
The data indicates the prime contractor is Lockheed Martin Corporation. There is no explicit information provided regarding small business participation or subcontracting goals within this specific contract award.
Oversight & Accountability
The Department of Defense and Department of the Navy are responsible for oversight. The use of a Cost Plus Incentive Fee contract requires diligent monitoring of costs and performance to ensure value for taxpayer money.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Cost Plus Incentive Fee contract type.
- Long contract duration.
- Potential for cost overruns in complex defense systems.
- Reliance on a single prime contractor for a critical system.
- Evolving threat landscape requiring continuous upgrades and sustainment.
Tags
search-detection-navigation-guidance-aer, department-of-defense, ny, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $168.8 million to LOCKHEED MARTIN CORPORATION. PRE DESIGN AN/SLQ-32X(V) SEWIP BLOCK 2
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 $168.8 million.
What is the period of performance?
Start: 2009-09-30. End: 2016-01-31.
What is the specific technological advancement SEWIP Block 2 offers over previous versions, and how does this justify the investment?
SEWIP Block 2 represents an upgrade to the AN/SLQ-32 system, enhancing the Navy's ability to detect, identify, and respond to threats. It integrates improved processing capabilities and potentially new sensor technologies for better situational awareness and electronic countermeasures. The justification lies in maintaining a technological edge against evolving adversary capabilities, crucial for fleet survivability and mission success in contested environments.
Given the Cost Plus Incentive Fee structure, what mechanisms are in place to control costs and ensure the government receives fair value?
Cost Plus Incentive Fee contracts typically include target costs, incentive fees tied to performance metrics (like cost reduction or schedule adherence), and ceiling prices. The Navy's contracting officers and program managers must rigorously monitor expenditures, conduct audits, and ensure that Lockheed Martin meets defined performance objectives to earn its incentive fees. Regular reviews and negotiations are crucial to manage potential cost escalations.
How does the performance of SEWIP Block 2 contribute to overall naval effectiveness and mission accomplishment?
SEWIP Block 2 is vital for electronic warfare, enabling ships to detect radar signals, identify threats, and deploy countermeasures. This directly enhances survivability by protecting the vessel from anti-ship missiles and other electronic attacks. Improved electronic warfare capabilities also support offensive electronic attack missions and contribute to overall battlespace awareness, ensuring naval forces can operate effectively in complex and dangerous environments.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N0002409R5300
Offers Received: 3
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: 497 ELECTRONICS PKWY BLDG 5, LIVERPOOL, NY, 13088
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $225,997,246
Exercised Options: $169,387,950
Current Obligation: $168,791,300
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2009-09-30
Current End Date: 2016-01-31
Potential End Date: 2016-01-31 00:00:00
Last Modified: 2018-09-13
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