Lockheed Martin awarded $16M contract for LUSV conceptual design by the Navy
Contract Overview
Contract Amount: $15,950,016 ($16.0M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2020-09-04
End Date: 2025-09-30
Contract Duration: 1,852 days
Daily Burn Rate: $8.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 8
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: LUSV CONCEPTUAL DESIGN
Place of Performance
Location: MIDDLE RIVER, BALTIMORE County, MARYLAND, 21220
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $16.0 million to LOCKHEED MARTIN CORPORATION for work described as: LUSV CONCEPTUAL DESIGN Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract is a firm fixed-price definitive contract, providing cost certainty for the government. 3. The duration of 1852 days indicates a long-term commitment to the conceptual design phase. 4. The contract is for conceptual design, a critical early stage in shipbuilding. 5. The North American Industry Classification System (NAICS) code 336611 points to shipbuilding and repairing. 6. The awardee, Lockheed Martin Corporation, is a major defense contractor with extensive experience.
Value Assessment
Rating: good
The contract value of approximately $16 million for conceptual design of a Littoral Combat Ship (LCS) variant (LUSV) appears reasonable given the complexity and duration. Benchmarking against similar early-stage design contracts is challenging without more specific details on the scope of work. However, for a major defense contractor like Lockheed Martin, this figure is within the expected range for such a significant undertaking. The firm fixed-price nature of the contract helps manage cost risks for the government.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 8 bidders suggests a healthy level of interest and competition for this significant defense contract. A competitive process like this generally leads to better price discovery and potentially more innovative solutions as contractors vie for the award.
Taxpayer Impact: The robust competition for this contract is beneficial for taxpayers as it likely drove down costs and ensured the Navy received competitive proposals for the LUSV conceptual design.
Public Impact
The U.S. Navy benefits from receiving conceptual designs for the Littoral Surface Warfare (LUSV) program, crucial for future fleet modernization. This contract supports the development of advanced naval capabilities, enhancing national security. The contract's impact is primarily within the defense sector, specifically naval shipbuilding and design. It may lead to job creation and sustainment within the defense industry, particularly in engineering and design roles.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if the conceptual design phase encounters unforeseen complexities.
- Long-term commitment could be impacted by shifts in defense priorities or budget constraints.
- Dependence on a single large contractor for a critical design phase.
Positive Signals
- Firm fixed-price contract provides cost certainty.
- Awarded through full and open competition, indicating competitive pricing.
- Experienced contractor selected for a complex design task.
- Long contract duration allows for thorough design development.
Sector Analysis
The shipbuilding and repair industry (NAICS 336611) is a critical component of the defense industrial base. This contract for conceptual design of the LUSV fits within the broader context of naval fleet modernization efforts. The U.S. Navy's shipbuilding budget is substantial, and contracts for design and development are essential precursors to major procurement programs. Comparable spending benchmarks for conceptual design phases of major naval platforms can range from millions to tens of millions of dollars, depending on the complexity and scale of the vessel.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'ss': false. While the prime contractor is a large corporation, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will depend on Lockheed Martin's strategy and the specific needs of the conceptual design work.
Oversight & Accountability
The Department of the Navy is responsible for overseeing this contract. Oversight mechanisms would include regular progress reviews, technical evaluations, and financial audits. Accountability is ensured through the firm fixed-price contract terms and performance metrics. Transparency is typically managed through contract reporting requirements and public contract databases. The Inspector General of the Department of Defense would have jurisdiction for audits and investigations if any issues arise.
Related Government Programs
- Littoral Combat Ship (LCS) Program
- Constellation-class Frigate Program
- Future Surface Combatant Programs
- Naval Surface Warfare Center Contracts
- Defense Advanced Research Projects Agency (DARPA) Projects
Risk Flags
- Potential for scope creep during conceptual design.
- Long-term contract duration introduces schedule and budget risk.
- Dependence on a single contractor for critical early-stage design.
Tags
defense, department-of-defense, department-of-the-navy, ship-building-and-repairing, definitive-contract, firm-fixed-price, full-and-open-competition, lockheed-martin-corporation, maryland, conceptual-design, naval-vessel, lusv
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $16.0 million to LOCKHEED MARTIN CORPORATION. LUSV CONCEPTUAL DESIGN
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 $16.0 million.
What is the period of performance?
Start: 2020-09-04. End: 2025-09-30.
What is the specific scope of work for the LUSV conceptual design phase?
The provided data indicates the contract is for 'LUSV CONCEPTUAL DESIGN.' While specific details are not in the abbreviated data, conceptual design typically involves defining the basic requirements, exploring different design alternatives, establishing preliminary performance specifications, and assessing technical feasibility. For the LUSV, this would likely include defining its role in the fleet, its armament, sensor suites, survivability features, and overall hull form. The goal is to mature the concept to a point where a preliminary design phase can begin, with detailed specifications and drawings.
How does the $16 million contract value compare to similar conceptual design contracts for naval vessels?
Direct comparisons for conceptual design contracts are difficult without knowing the exact scope and complexity. However, for major naval platforms, conceptual design contracts can range from a few million to tens of millions of dollars. Given that the LUSV is intended to be a significant addition to the fleet, and Lockheed Martin is a major defense contractor, the $16 million award appears to be within a reasonable range for this critical early-stage development. The firm fixed-price nature also suggests a well-defined scope was established prior to award.
What are the key performance indicators (KPIs) or milestones for this contract?
The provided data does not specify the key performance indicators or milestones for this contract. However, for a conceptual design contract, typical milestones would include the delivery of preliminary design reports, trade studies on different design options, feasibility assessments, and a final conceptual design package. Performance would likely be evaluated based on adherence to schedule, budget, and the successful completion of these design deliverables as outlined in the contract statement of work.
What is Lockheed Martin's track record with similar naval design and shipbuilding contracts?
Lockheed Martin Corporation has a long and extensive track record in naval design and shipbuilding. They have been a prime contractor for numerous naval programs, including the Littoral Combat Ship (LCS) variants (Freedom class), Aegis Combat System, and various submarine and surface ship components. Their experience spans design, development, integration, and production of complex naval platforms, making them a well-qualified entity for the LUSV conceptual design contract.
What is the historical spending trend for LUSV or similar programs within the Department of the Navy?
Historical spending on the LUSV program itself is limited as it is a relatively new initiative. However, spending on precursor programs like the Littoral Combat Ship (LCS) has been substantial over many years, encompassing design, development, and procurement. The Navy's overall shipbuilding and conversion budget consistently runs into the tens of billions of dollars annually. Contracts for conceptual and preliminary design phases are a small but crucial part of this larger investment in fleet modernization and expansion.
What are the potential risks associated with this contract, and how are they being mitigated?
Potential risks include technical challenges in defining the LUSV's capabilities, cost growth if the scope expands, and schedule delays. Mitigation strategies likely involve the firm fixed-price contract structure, which incentivizes the contractor to manage costs. The full and open competition with multiple bidders suggests a thorough vetting of proposals. The long contract duration allows for phased development and risk assessment throughout the conceptual design process.
Industry Classification
NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing
Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N0002419R6314
Offers Received: 8
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 2323 EASTERN BLVD, BALTIMORE, MD, 21220
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: $25,959,634
Exercised Options: $25,959,634
Current Obligation: $15,950,016
Subaward Activity
Number of Subawards: 37
Total Subaward Amount: $15,561,581
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2020-09-04
Current End Date: 2025-09-30
Potential End Date: 2025-09-30 00:00:00
Last Modified: 2025-10-30
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