DoD's $824M AN/SQQ-89A(V)15 Sonar System Contract Awarded to Lockheed Martin Under Full and Open Competition
Contract Overview
Contract Amount: $824,000,835 ($824.0M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2013-05-20
End Date: 2022-09-07
Contract Duration: 3,397 days
Daily Burn Rate: $242.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: AN/SQQ-89A(V)15 DEVELOPMENT, INTEGRATION AND PRODUCTION
Place of Performance
Location: MANASSAS, PRINCE WILLIAM County, VIRGINIA, 20110
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $824.0 million to LOCKHEED MARTIN CORPORATION for work described as: AN/SQQ-89A(V)15 DEVELOPMENT, INTEGRATION AND PRODUCTION Key points: 1. The contract for the AN/SQQ-89A(V)15 sonar system represents a significant investment in naval defense capabilities. 2. Lockheed Martin, a major defense contractor, secured this award through a full and open competition. 3. The contract's cost-plus-incentive-fee structure suggests potential for cost overruns if not managed effectively. 4. The sector is dominated by large, established defense manufacturers, limiting opportunities for smaller players.
Value Assessment
Rating: fair
The contract type is Cost Plus Incentive Fee (CPIF), which can lead to higher costs than fixed-price contracts if performance targets are not met. The awarded amount is substantial, and detailed cost breakdowns are needed to assess value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating a robust price discovery process. This method generally leads to more competitive pricing by allowing all eligible sources to submit proposals.
Taxpayer Impact: Full and open competition is intended to ensure taxpayer funds are used efficiently by fostering a competitive environment that drives down costs.
Public Impact
Enhances U.S. Navy's anti-submarine warfare capabilities. Supports critical maritime security and national defense objectives. Potential for technological advancements in sonar systems. Impacts supply chains within the defense industrial base.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus contracts can incentivize overspending.
- Long contract duration increases risk of cost escalation.
- Lack of small business participation noted.
Positive Signals
- Awarded through full and open competition.
- Supports critical defense capabilities.
- Experienced prime contractor.
Sector Analysis
This contract falls within the Defense sector, specifically in the manufacturing of advanced sonar systems. Spending in this area is driven by geopolitical factors and the need for technological superiority in naval warfare.
Small Business Impact
The data indicates that small businesses were not prime contractors on this award (ss: false, sb: false). Further analysis would be needed to determine if small businesses were involved as subcontractors.
Oversight & Accountability
The Department of Defense, through the Defense Contract Management Agency, is responsible for overseeing this contract. Robust oversight is crucial for CPIF contracts to ensure cost control and performance.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Cost-plus contracts carry inherent cost overrun risks.
- Long contract duration increases exposure to changing requirements and economic conditions.
- Limited visibility into small business subcontracting.
- Dependence on a single prime contractor for a critical system.
Tags
search-detection-navigation-guidance-aer, department-of-defense, va, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $824.0 million to LOCKHEED MARTIN CORPORATION. AN/SQQ-89A(V)15 DEVELOPMENT, INTEGRATION AND PRODUCTION
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $824.0 million.
What is the period of performance?
Start: 2013-05-20. End: 2022-09-07.
What is the projected return on investment for this sonar system in terms of enhanced operational effectiveness and threat mitigation?
The return on investment is primarily measured by the enhanced capabilities the AN/SQQ-89A(V)15 provides to the U.S. Navy's anti-submarine warfare operations. This includes improved detection ranges, classification accuracy, and tactical situational awareness, which directly contribute to mitigating underwater threats and ensuring maritime security. Quantifying ROI in defense is complex, often relying on mission success rates and avoided costs from potential engagements.
What are the key performance metrics and associated incentives within the CPIF contract to manage cost and ensure timely delivery?
The CPIF contract structure implies that Lockheed Martin is incentivized to meet specific performance targets, which likely include technical performance, delivery schedules, and potentially cost ceilings. The 'incentive' portion means that if the contractor performs better than target on certain metrics (e.g., cost savings, faster delivery), they earn a higher fee, and vice versa. Specific metrics and incentive formulas would be detailed in the contract itself.
How does the AN/SQQ-89A(V)15 system compare technologically to similar systems fielded by potential adversaries or allied nations?
The AN/SQQ-89A(V)15 is a critical component of the U.S. Navy's sonar suite, designed for detecting and tracking submarines. While specific technical comparisons are often classified, its continuous development and integration aim to maintain a technological edge over potential adversaries. Its effectiveness is benchmarked against evolving threats and advancements in foreign sonar technologies, ensuring U.S. naval superiority in underwater acoustics.
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: SERVICE AND TRADE EQPT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N0002412R5200
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp
Address: 9500 GODWIN DR, MANASSAS, VA, 20110
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $888,977,622
Exercised Options: $879,037,387
Current Obligation: $824,000,835
Actual Outlays: $47,485,883
Subaward Activity
Number of Subawards: 596
Total Subaward Amount: $5,436,373,158
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2013-05-20
Current End Date: 2022-09-07
Potential End Date: 2022-09-07 00:00:00
Last Modified: 2024-09-11
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