DoD awards $41.75M for DDG-51 ENGINE CONTROLLERS, with Lockheed Martin securing the contract

Contract Overview

Contract Amount: $41,750,545 ($41.8M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2019-04-19

End Date: 2026-10-15

Contract Duration: 2,736 days

Daily Burn Rate: $15.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DDG-51 ENGINE CONTROLLERS

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32825

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $41.8 million to LOCKHEED MARTIN CORPORATION for work described as: DDG-51 ENGINE CONTROLLERS Key points: 1. Value for money assessed through benchmarking against similar systems and market rates. 2. Competition dynamics indicate a full and open process, potentially driving competitive pricing. 3. Risk indicators are moderate, given the nature of complex defense systems. 4. Performance context relies on the successful delivery of critical shipboard components. 5. Sector positioning places this contract within the defense manufacturing and systems integration domain.

Value Assessment

Rating: good

The contract value of $41.75 million for DDG-51 ENGINE CONTROLLERS appears reasonable when considering the specialized nature of defense systems. Benchmarking against similar complex electronic control systems for naval vessels suggests that this pricing is within expected ranges. The firm fixed-price contract type also provides cost certainty for the government, contributing to a good assessment of value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, suggesting that multiple vendors had the opportunity to bid. The presence of a single award indicates that one offer was deemed most advantageous. The competitive nature of the bidding process is expected to have contributed to price discovery and potentially secured a more favorable price for the government.

Taxpayer Impact: A full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and better quality goods or services.

Public Impact

The primary beneficiaries are the U.S. Navy's Arleigh Burke-class (DDG-51) destroyers, ensuring operational readiness. Services delivered include the manufacturing and supply of critical engine control systems essential for ship propulsion and navigation. Geographic impact is concentrated in Florida, where the contractor is located, potentially supporting local jobs and the defense industrial base. Workforce implications include skilled labor in manufacturing, engineering, and quality assurance within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting delivery timelines.
Ensuring long-term sustainment and maintenance support for the controllers.
Managing technological obsolescence in critical defense components.

Positive Signals

Lockheed Martin's established track record in defense contracting.
Firm fixed-price contract provides cost predictability.
Awarded under full and open competition, suggesting market validation.

Sector Analysis

This contract falls within the defense electronics and systems manufacturing sector, a critical component of the broader aerospace and defense industry. The market for naval combat system components is characterized by high barriers to entry, specialized technical expertise, and significant government investment. Comparable spending benchmarks in this area are often in the millions to tens of millions of dollars for complex subsystems.

Small Business Impact

There is no indication of a small business set-aside for this contract, nor are there explicit subcontracting requirements mentioned in the provided data. This suggests that the primary award went to a large business. The impact on the small business ecosystem would depend on whether Lockheed Martin utilizes small businesses in its supply chain for components or services related to this contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and program management offices. Accountability measures are embedded within the contract terms, including performance standards and delivery schedules. Transparency is facilitated through contract award databases, though detailed performance metrics may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Arleigh Burke-class Destroyer Program
Naval Ship Systems
Defense Electronics Manufacturing
Propulsion Systems

Risk Flags

Potential for supply chain vulnerabilities
Risk of technological obsolescence over long service life
Dependence on a single prime contractor for critical components

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.8 million to LOCKHEED MARTIN CORPORATION. DDG-51 ENGINE CONTROLLERS

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 $41.8 million.

What is the period of performance?

Start: 2019-04-19. End: 2026-10-15.

What is Lockheed Martin Corporation's track record with similar defense contracts, particularly for naval systems?

Lockheed Martin Corporation is a major defense contractor with extensive experience in developing and producing complex systems for naval applications. They are a primary contractor for numerous U.S. Navy programs, including the Littoral Combat Ship (LCS) and Aegis Combat System, which involves sophisticated electronic and combat management systems. Their history includes delivering large-scale, high-value contracts for aircraft carriers, submarines, and surface combatants. While specific performance data for every contract is not always public, their consistent selection for major defense initiatives suggests a generally positive track record in meeting technical requirements and delivery schedules, though like any large contractor, they have faced scrutiny on specific projects regarding cost and schedule overruns.

How does the awarded amount of $41.75 million compare to the total lifecycle cost of DDG-51 class destroyers?

The awarded amount of $41.75 million represents a component cost for engine controllers, not the total lifecycle cost of a DDG-51 class destroyer. A single Arleigh Burke-class destroyer has a procurement cost typically ranging from $1 billion to over $1.8 billion, depending on the flight level and specific configuration. The lifecycle cost, encompassing acquisition, operation, maintenance, and eventual decommissioning, can run into tens of billions of dollars per vessel over its 30-40 year service life. Therefore, $41.75 million is a relatively small fraction of the overall investment in a single destroyer, focusing on a critical but specific subsystem.

What are the primary risks associated with the manufacturing and delivery of these engine controllers?

The primary risks associated with manufacturing and delivering these engine controllers include technical complexity, potential supply chain disruptions, and the risk of obsolescence. Developing and producing highly specialized electronic control systems requires precise engineering and rigorous quality control; any deviation can lead to system failures. The supply chain for advanced components can be vulnerable to geopolitical events, material shortages, or the financial stability of lower-tier suppliers. Furthermore, defense systems have long service lives, and ensuring that the technology within these controllers remains viable and supportable over decades presents a significant obsolescence risk that requires proactive management and potential redesigns.

What is the historical spending pattern for DDG-51 engine controllers or similar components by the Department of the Navy?

Historical spending on DDG-51 engine controllers or similar critical components by the Department of the Navy typically involves multi-year contracts awarded through competitive or sole-source processes, depending on the specific system's maturity and availability of suppliers. Annual spending can fluctuate based on the number of ships undergoing new construction, modernization, or scheduled maintenance requiring component replacements. While precise historical figures for this specific contract line item are not detailed in the provided data, the Navy consistently allocates significant portions of its shipbuilding and conversion budget towards complex systems like propulsion, navigation, and combat electronics, often in the tens to hundreds of millions of dollars annually across various programs.

How does the firm fixed-price contract type influence the government's financial risk compared to other contract types?

A firm fixed-price (FFP) contract type places the majority of the financial risk on the contractor. Under an FFP agreement, the contractor agrees to a set price for the work, regardless of their actual costs. This means that if the contractor's costs exceed the agreed-upon price, they absorb the loss. Conversely, if their costs are lower, they retain the profit. For the government, this contract type offers the highest degree of cost certainty, as the final price is known upfront and is not subject to upward adjustment due to contractor cost overruns. This contrasts with cost-plus contracts, where the government bears more financial risk by reimbursing the contractor's allowable costs plus a fee.

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: SHIP AND MARINE EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0002418R4209

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 100 GLOBAL INNOVATION CIR, ORLANDO, FL, 32825

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: $66,980,473

Exercised Options: $43,365,563

Current Obligation: $41,750,545

Subaward Activity

Number of Subawards: 103

Total Subaward Amount: $17,442,883

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline