DoD awards $48.2M for Surface Mine Neutralization System to Lockheed Martin, raising value concerns
Contract Overview
Contract Amount: $48,191,287 ($48.2M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2012-02-17
End Date: 2013-09-30
Contract Duration: 591 days
Daily Burn Rate: $81.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: SURFACE MINE NEUTRALIZATION SYSTEM
Place of Performance
Location: LIVERPOOL, ONONDAGA County, NEW YORK, 13088
State: New York Government Spending
Plain-Language Summary
Department of Defense obligated $48.2 million to LOCKHEED MARTIN CORPORATION for work described as: SURFACE MINE NEUTRALIZATION SYSTEM Key points: 1. High contract value for a specialized system. 2. Sole-source award to Lockheed Martin limits competitive pricing. 3. Potential for cost overruns with Cost Plus Fixed Fee contract type. 4. Focus on defense sector, specifically naval operations.
Value Assessment
Rating: questionable
The contract value of $48.2 million for a Surface Mine Neutralization System appears high, especially given the relatively short duration of 591 days. Without competitive bidding, it's difficult to benchmark against similar systems or establish a fair market price.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Lockheed Martin. This lack of competition likely prevented price discovery and may have resulted in a higher overall cost to the government.
Taxpayer Impact: The absence of competition for this $48.2 million contract means taxpayers may have paid a premium for the Surface Mine Neutralization System.
Public Impact
Enhances naval capabilities in mine countermeasures. Supports national security by addressing maritime threats. Potential for technological advancements in defense systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Lack of competitive pricing benchmarks
Positive Signals
- Addresses critical naval defense need
- Utilizes established defense contractor
Sector Analysis
This contract falls within the defense sector, specifically related to naval systems and instruments. Spending in this area is often driven by national security requirements and can involve complex, high-value procurements.
Small Business Impact
The contract data indicates no specific set-aside for small businesses, and the prime contractor is Lockheed Martin Corporation, a large aerospace and defense company. This suggests limited direct opportunities for small businesses on this particular award.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny to ensure the price paid was fair and reasonable. Further oversight may be needed to track performance and costs throughout the contract's lifecycle.
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
- Sole-source award lacks competitive pricing.
- Cost Plus Fixed Fee contract increases risk of cost overruns.
- Limited transparency on justification for sole-source.
- Potential for inflated costs due to lack of competition.
Tags
search-detection-navigation-guidance-aer, department-of-defense, ny, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $48.2 million to LOCKHEED MARTIN CORPORATION. SURFACE MINE NEUTRALIZATION SYSTEM
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 $48.2 million.
What is the period of performance?
Start: 2012-02-17. End: 2013-09-30.
What was the justification for awarding this contract on a sole-source basis?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or the absence of other responsible sources capable of meeting the government's needs. Without further documentation, the specific rationale for this contract remains unclear, but it is a critical factor in assessing the fairness of the procurement process and the value received.
What are the potential risks associated with a Cost Plus Fixed Fee contract for this system?
Cost Plus Fixed Fee (CPFF) contracts carry inherent risks of cost overruns, as the contractor is reimbursed for allowable costs plus a fixed fee. This can incentivize less cost-conscious behavior compared to fixed-price contracts. For a complex system like mine neutralization, unforeseen technical challenges could significantly increase costs, impacting the overall value and potentially exceeding initial budget estimates.
How does the performance of this system align with its cost, given the lack of competition?
Assessing the alignment of performance with cost is challenging due to the sole-source nature of this award. Without competitive bids, there's no market-driven benchmark to evaluate if $48.2 million represents a fair price for the capabilities delivered. Performance metrics and actual outcomes would need to be rigorously tracked and compared against the initial requirements to determine if the investment yielded adequate value for the Department of the Navy.
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: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0002412R6306
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
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, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $48,191,287
Exercised Options: $48,191,287
Current Obligation: $48,191,287
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $5,360,768
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2012-02-17
Current End Date: 2013-09-30
Potential End Date: 2013-09-30 00:00:00
Last Modified: 2018-07-30
More Contracts from Lockheed Martin Corporation
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Department of Defense)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Department of Defense)
- THE Purpose of This Modification IS to Award F-35A Lrip 15 Usaf Aircraft* Long Lead Funding — $30.1B (Department of Defense)
- THE Purpose of This Contract IS to Award Long Lead Funding for F-35A, F-35B, and F-35C Aircraft for U.S. Services, Non-Dod Partners, and FMS Customers — $24.5B (Department of Defense)
- Lrip 11 AAC — $12.3B (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)