DoD Awards $100M System Engineering Contract to Lockheed Martin for Naval Operations
Contract Overview
Contract Amount: $99,978,143 ($100.0M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2023-03-03
End Date: 2025-03-31
Contract Duration: 759 days
Daily Burn Rate: $131.7K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: SYSTEM ENGINEERING FOR EARLY START
Place of Performance
Location: MOORESTOWN, BURLINGTON County, NEW JERSEY, 08057
Plain-Language Summary
Department of Defense obligated $100.0 million to LOCKHEED MARTIN CORPORATION for work described as: SYSTEM ENGINEERING FOR EARLY START Key points: 1. Significant contract value of $99.98M for system engineering services. 2. Sole-source award to Lockheed Martin raises questions about competition. 3. Potential for cost overruns given the Cost Plus Incentive Fee (CPIF) contract type. 4. Focus on naval system engineering aligns with defense sector priorities.
Value Assessment
Rating: questionable
The contract's Cost Plus Incentive Fee structure allows for potential cost growth beyond initial estimates. Benchmarking against similar system engineering contracts is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, indicating a lack of competitive bidding. This limits price discovery and potentially leads to higher costs for the government.
Taxpayer Impact: The absence of competition may result in taxpayers paying a premium for these system engineering services.
Public Impact
Enhances critical naval system capabilities for the Department of the Navy. Supports advanced technology development in search, detection, and navigation systems. Ensures continued operational readiness for naval assets through specialized engineering support.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Incentive Fee contract type
- Lack of competition
Positive Signals
- Critical system engineering for naval operations
- Award to established defense contractor
Sector Analysis
This contract falls within the defense sector, specifically focusing on advanced system engineering for naval applications. Spending in this area is crucial for maintaining technological superiority and operational effectiveness.
Small Business Impact
The contract was not awarded to a small business. There is no indication of subcontracting opportunities for small businesses within this sole-source award.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and effective performance. The Department of the Navy must ensure robust monitoring of costs and deliverables.
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
- Sole-source award limits competition and potentially increases cost.
- Cost Plus Incentive Fee contract type carries inherent risk of cost overruns.
- Lack of transparency regarding specific system requirements and performance metrics.
- No clear indication of small business participation or subcontracting opportunities.
Tags
search-detection-navigation-guidance-aer, department-of-defense, nj, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $100.0 million to LOCKHEED MARTIN CORPORATION. SYSTEM ENGINEERING FOR EARLY START
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 $100.0 million.
What is the period of performance?
Start: 2023-03-03. End: 2025-03-31.
What specific factors justified the sole-source award to Lockheed Martin for this critical system engineering work?
Justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs that only a specific contractor can meet. Without further documentation, it's difficult to ascertain the precise rationale, but it likely relates to specialized expertise or existing system integration requirements that Lockheed Martin uniquely possesses for the Department of the Navy's platforms.
How will the Cost Plus Incentive Fee structure be managed to mitigate potential cost overruns and ensure value for taxpayers?
Effective management of a CPIF contract requires clear establishment of target costs, incentive targets, and sharing ratios. The government must closely monitor performance against these metrics, provide timely feedback, and ensure that incentives align with desired outcomes. Robust oversight is crucial to prevent unchecked cost growth and ensure the contractor is motivated to achieve efficiencies.
What are the key performance indicators (KPIs) for this contract, and how will their achievement be measured to ensure effectiveness?
Key performance indicators would likely focus on technical performance of the engineered systems, adherence to schedule milestones, and cost control within the incentive framework. Measurement would involve rigorous testing, system integration validation, and regular progress reviews. The effectiveness will be gauged by the successful integration and performance of the system engineering solutions in supporting naval operations.
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: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0002421R5109
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Address: 199 BORTON LANDING RD, MOORESTOWN, NJ, 08057
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: $99,978,143
Exercised Options: $99,978,143
Current Obligation: $99,978,143
Subaward Activity
Number of Subawards: 31
Total Subaward Amount: $10,113,546
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: N0002423D5109
IDV Type: IDC
Timeline
Start Date: 2023-03-03
Current End Date: 2025-03-31
Potential End Date: 2025-03-31 00:00:00
Last Modified: 2025-03-04
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