Navy awards $171.6M for advanced radar systems, with Lockheed Martin as prime contractor

Contract Overview

Contract Amount: $171,621,577 ($171.6M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2019-09-19

End Date: 2026-07-28

Contract Duration: 2,504 days

Daily Burn Rate: $68.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: TB-37X FIRST PRODUCTION UNIT

Place of Performance

Location: LIVERPOOL, ONONDAGA County, NEW YORK, 13088

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $171.6 million to LOCKHEED MARTIN CORPORATION for work described as: TB-37X FIRST PRODUCTION UNIT Key points: 1. Contract value represents a significant investment in critical defense technology. 2. Sole-source award to Lockheed Martin suggests unique capabilities or existing platform integration. 3. Long contract duration indicates a sustained need for these advanced systems. 4. Firm-fixed-price structure aims to control costs and transfer risk to the contractor. 5. The contract supports the development and production of sophisticated search and navigation instruments. 6. Geographic focus on New York for contract performance.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable system costs. The firm-fixed-price structure is a positive indicator for cost control. However, the absence of a competitive bidding process (implied by the sole-source nature) may limit opportunities for price discovery and potentially lead to higher costs than a fully competed contract. Further analysis would require understanding the specific technological advancements and their market value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder was solicited. This typically occurs when a contractor possesses unique capabilities, proprietary technology, or when the item is a follow-on to a previous sole-source award. While efficient for specific needs, it limits the government's ability to leverage competition to drive down prices and explore alternative solutions.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as the government does not benefit from competitive bidding, potentially paying a premium for specialized or proprietary systems.

Public Impact

The U.S. Navy benefits from the acquisition of advanced radar and navigation systems essential for operational readiness. This contract supports the development and production of critical defense hardware, enhancing national security. The primary geographic impact is in New York, where the contractor is located and performance will likely occur. Workforce implications include skilled labor in engineering, manufacturing, and technical support within the defense industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Lack of transparency in the sole-source justification could obscure potential cost efficiencies.
Long-term contract duration may not fully account for future technological obsolescence or market shifts.

Positive Signals

Firm-fixed-price contract type provides cost certainty for the government.
Lockheed Martin is a well-established defense contractor with a track record in complex systems.
The contract addresses a critical need for advanced navigation and detection systems for the Navy.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on the manufacturing of advanced navigation and detection systems. The market for such specialized equipment is characterized by high barriers to entry due to technological complexity and significant R&D investment. Comparable spending benchmarks would likely involve other major defense procurements for sophisticated electronic warfare or sensor systems, often awarded to large, established prime contractors.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the prime contractor, Lockheed Martin, is a large corporation. While large prime contractors are often required to subcontract a portion of their work to small businesses, the specific subcontracting plan and its impact on the small business ecosystem are not detailed in the provided data. Without further information, it's difficult to assess the direct benefit to small businesses from this particular award.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices, with potential involvement from the Naval Sea Systems Command (NAVSEA). Inspector General (IG) jurisdiction would apply for investigations into fraud, waste, or abuse. Transparency is generally maintained through contract awards databases and reporting requirements, though specific performance details may be sensitive.

Related Government Programs

Naval Radar Systems Procurement
Advanced Navigation Technology Development
Defense Electronics Manufacturing
Search and Detection Systems

Risk Flags

Sole-source award may limit price competition.
Contract duration extends to 2026, requiring monitoring for technological relevance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $171.6 million to LOCKHEED MARTIN CORPORATION. TB-37X FIRST PRODUCTION UNIT

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 $171.6 million.

What is the period of performance?

Start: 2019-09-19. End: 2026-07-28.

What is Lockheed Martin's track record with similar sole-source defense contracts?

Lockheed Martin, as one of the largest defense contractors globally, has a substantial history of receiving sole-source awards, particularly for complex, integrated systems where they possess unique expertise or are the incumbent provider. These awards often stem from follow-on contracts for existing platforms or for highly specialized technologies like advanced radar, missile defense, or aircraft systems. While sole-source awards can streamline acquisition for critical needs, they also necessitate robust government oversight to ensure fair pricing and value. Analyzing past sole-source contracts with Lockheed Martin would involve reviewing their performance, cost overruns or underruns, and any subsequent competitive procurements for similar capabilities to gauge long-term value.

How does the $171.6 million value compare to similar radar system procurements?

Directly comparing the $171.6 million value requires identifying contracts for radar systems with comparable technological sophistication, scope (e.g., R&D, production, sustainment), and intended platform (e.g., ship-based, airborne). Radar systems can vary dramatically in cost based on factors like frequency, range, resolution, electronic warfare capabilities, and integration complexity. For instance, a basic search radar might cost significantly less than an advanced, multi-function phased-array radar with integrated electronic attack capabilities. Without detailed specifications for the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' covered by this contract, a precise benchmark is difficult. However, for major defense platforms, multi-hundred-million-dollar contracts for advanced sensor suites are not uncommon, reflecting the high cost of cutting-edge defense technology.

What are the primary risks associated with this sole-source contract?

The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government may not achieve the best possible price for the systems. Another risk is technological obsolescence; while the contract duration is long (ending in 2026), the pace of technological advancement in defense electronics could mean the systems are less cutting-edge by the end of the period. Performance risk also exists, although Lockheed Martin's experience mitigates this somewhat. Ensuring the contractor meets all technical specifications and delivery schedules under a sole-source arrangement requires diligent government oversight and clear contract terms.

How effective is a firm-fixed-price contract in managing costs for advanced systems like this?

A firm-fixed-price (FFP) contract is generally considered effective in managing costs for advanced systems, especially when the scope of work is well-defined. Under an FFP contract, the contractor assumes most of the risk for cost overruns, agreeing to deliver the specified goods or services for a predetermined price. This incentivizes the contractor to control costs efficiently. However, for highly complex or developmental systems where uncertainties are significant, an FFP contract can sometimes lead to contractors building in substantial contingency into their price, potentially making it higher than a cost-reimbursement contract with strong cost controls. For production runs of established or well-understood advanced systems, FFP is often preferred for its cost certainty.

What is the historical spending pattern for similar navigation and detection systems by the Department of the Navy?

The Department of the Navy has a consistent and substantial historical spending pattern on navigation, detection, and related electronic systems, driven by the need to maintain technological superiority and operational effectiveness across its fleet. This spending typically involves large, multi-year contracts awarded to major defense contractors for the development, production, and sustainment of radar, sonar, electronic warfare, and communication systems. Annual spending in this category often runs into billions of dollars across the Navy's various programs. Analyzing historical data would reveal trends in contract types (FFP vs. cost-plus), competition levels, and average contract values for specific system types, providing context for the current $171.6 million award.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: N0002418R6103

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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: $249,785,855

Exercised Options: $172,710,984

Current Obligation: $171,621,577

Subaward Activity

Number of Subawards: 133

Total Subaward Amount: $262,511,557

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline