DoD's $43.8M Water-Cooled Variant A Production Contract Awarded to Lockheed Martin
Contract Overview
Contract Amount: $43,776,383 ($43.8M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2019-09-30
End Date: 2020-09-30
Contract Duration: 366 days
Daily Burn Rate: $119.6K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: WATER-COOLED VARIANT A PRODUCTION UNITS
Place of Performance
Location: JOHNSTOWN, CAMBRIA County, PENNSYLVANIA, 15904
Plain-Language Summary
Department of Defense obligated $43.8 million to LOCKHEED MARTIN CORPORATION for work described as: WATER-COOLED VARIANT A PRODUCTION UNITS Key points: 1. Significant contract value for specialized equipment. 2. Lockheed Martin is a major defense contractor, indicating potential market concentration. 3. Risk of single-source reliance if competition is limited in future. 4. Sector: Defense manufacturing, specifically navigation and guidance systems.
Value Assessment
Rating: good
The total award of $43.8M for 366 days suggests a reasonable per-unit cost, though specific performance metrics are not provided. Benchmarking against similar complex system manufacturing would be necessary for a definitive assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically drives competitive pricing. The specific impact on price discovery for this specialized equipment is not detailed but is generally positive.
Taxpayer Impact: Full and open competition generally leads to better value for taxpayers by ensuring the government receives the best possible price through market forces.
Public Impact
Ensures continued production of critical navigation and guidance systems for the Navy. Supports a major defense contractor and its supply chain. Potential for technological advancements in naval systems. Impact on readiness and operational capabilities of naval assets.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for future sole-source awards if competition diminishes.
- Reliance on a single large contractor for critical components.
Positive Signals
- Awarded under full and open competition.
- Firm fixed price contract limits cost overrun risk for the government.
Sector Analysis
This contract falls within the defense manufacturing sector, specifically focusing on navigation and guidance systems. Spending in this area is critical for national security and often involves high-value, specialized production runs.
Small Business Impact
While the prime contractor is Lockheed Martin, a large corporation, the contract details do not specify the extent of small business participation in the subcontracting process. Further investigation into the subcontracting plan would be beneficial.
Oversight & Accountability
The contract was awarded by the Department of the Navy, a component of the Department of Defense, which has established oversight mechanisms. The firm fixed price nature of the contract provides some cost control, but ongoing monitoring of performance and delivery is crucial.
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
- Potential for future sole-source awards.
- Reliance on a single large prime contractor.
- Lack of detailed performance metrics in award data.
- Limited insight into small business subcontracting.
Tags
search-detection-navigation-guidance-aer, department-of-defense, pa, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $43.8 million to LOCKHEED MARTIN CORPORATION. WATER-COOLED VARIANT A PRODUCTION UNITS
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 $43.8 million.
What is the period of performance?
Start: 2019-09-30. End: 2020-09-30.
What is the specific technological advancement or capability this water-cooled variant provides compared to previous models?
The provided data does not specify the technological advancements of the water-cooled variant. Further analysis would require access to technical specifications, performance reports, or program documentation. Understanding the unique benefits is key to assessing if the investment justifies the cost and potential risks associated with specialized equipment.
How does the per-unit cost of this contract benchmark against similar defense system procurements, considering the firm fixed price structure?
Benchmarking the per-unit cost is challenging without more specific data on the system's complexity and performance requirements. However, the firm fixed price structure suggests that the contractor assumed the risk of cost overruns. A comparison with other contracts for similar navigation and guidance systems, adjusted for scale and technological sophistication, would be necessary to determine if the pricing is competitive.
What is the long-term strategy for ensuring continued competition and avoiding sole-source dependency for these critical systems?
The current award was made under full and open competition, which is a positive sign. However, the long-term strategy to maintain competition for specialized defense systems like this requires proactive market research, fostering new entrants, and potentially investing in alternative technologies. The Department of Defense should continuously assess the competitive landscape to mitigate the risk of future sole-source situations.
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: ELECTRICAL/ELECTRONIC EQPT COMPNTS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N0002414R5217
Pricing Type: FIRM FIXED PRICE (J)
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: $43,914,114
Exercised Options: $43,914,114
Current Obligation: $43,776,383
Subaward Activity
Number of Subawards: 2
Total Subaward Amount: $59,396,868
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0002415D5217
IDV Type: IDC
Timeline
Start Date: 2019-09-30
Current End Date: 2020-09-30
Potential End Date: 2020-09-30 00:00:00
Last Modified: 2023-05-09
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