DoD Awards $73M to Lockheed Martin for Navigation Systems, Competition Method Impacts Price Discovery
Contract Overview
Contract Amount: $73,117,937 ($73.1M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2023-04-10
End Date: 2026-07-31
Contract Duration: 1,208 days
Daily Burn Rate: $60.5K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS INCENTIVE FEE
Sector: IT
Official Description: 688I TI14 TO TI22
Place of Performance
Location: LIVERPOOL, ONONDAGA County, NEW YORK, 13088
State: New York Government Spending
Plain-Language Summary
Department of Defense obligated $73.1 million to LOCKHEED MARTIN CORPORATION for work described as: 688I TI14 TO TI22 Key points: 1. Significant contract value of $73.1M awarded to a single large business. 2. Full and open competition was utilized, but the award type (delivery order) may limit future competitive opportunities. 3. The contract is for Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing. 4. The contract duration is 1208 days, ending in July 2026.
Value Assessment
Rating: fair
The contract type is Cost Plus Incentive Fee (CPIF), which can lead to cost overruns if not managed carefully. The awarded amount of $73.1M needs to be benchmarked against similar contracts for navigation systems to assess value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is positive for price discovery. However, it is a delivery order against an existing contract, potentially limiting the scope of competition for this specific award.
Taxpayer Impact: The use of full and open competition aims to secure the best value for taxpayers. However, the CPIF contract type introduces risk of increased costs.
Public Impact
Taxpayers are funding advanced navigation systems for the Department of Defense. The contract supports a major defense contractor, Lockheed Martin, and its supply chain. The duration of the contract suggests a long-term need for these systems. The specific use of these systems for search, detection, and guidance implies critical operational roles.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Incentive Fee contract type carries inherent cost escalation risks.
- Award is to a single large business, with no indication of small business participation.
- Delivery order structure may limit future competitive opportunities for this specific need.
Positive Signals
- Awarded under full and open competition, promoting market access.
- Contract supports critical defense capabilities in navigation and guidance systems.
Sector Analysis
This contract falls within the IT and Defense sectors, specifically related to advanced navigation and guidance systems. Spending benchmarks for similar systems are highly variable based on technological sophistication and quantity.
Small Business Impact
The data indicates the award went to Lockheed Martin Corporation, a large business. There is no explicit mention of small business participation in this specific award, suggesting potential missed opportunities for small businesses in the defense supply chain.
Oversight & Accountability
The Department of the Navy is the procuring agency, and the contract is a delivery order, implying oversight of the performance and costs associated with this specific order. The CPIF structure requires diligent monitoring to control costs.
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
- Cost Plus Incentive Fee (CPIF) contract type can lead to cost overruns.
- Lack of explicit small business participation.
- Delivery order structure may limit future competition.
- High value contract awarded to a single large business.
Tags
search-detection-navigation-guidance-aer, department-of-defense, ny, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $73.1 million to LOCKHEED MARTIN CORPORATION. 688I TI14 TO TI22
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 $73.1 million.
What is the period of performance?
Start: 2023-04-10. End: 2026-07-31.
What is the benchmark cost per unit for similar navigation and guidance systems awarded under comparable contract types?
Benchmarking the per-unit cost for these specialized navigation systems is challenging without more specific technical details and contract terms. However, similar systems for military applications can range from tens of thousands to millions of dollars per unit, depending on complexity, features, and quantity. A CPIF contract adds another layer of variability as the final cost is tied to performance metrics.
What are the specific performance metrics tied to the incentive fee in this CPIF contract, and how are they monitored?
The specific performance metrics for the incentive fee are not detailed in the provided data. Typically, for navigation systems, these could relate to accuracy, reliability, mean time between failures (MTBF), or integration timelines. The Department of the Navy's contracting officers and technical representatives would be responsible for monitoring adherence to these metrics and calculating the incentive fee accordingly.
How does the 'delivery order' structure impact the long-term competitive landscape for these navigation systems?
A delivery order is typically issued against a previously awarded indefinite-delivery indefinite-quantity (IDIQ) contract. While the initial award may have been competitive, subsequent delivery orders can sometimes be sole-sourced or have limited competition, depending on the terms of the base IDIQ. This structure can limit future opportunities for other companies to compete for specific needs under that IDIQ.
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: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N0002418R6200
Pricing Type: COST PLUS INCENTIVE FEE (V)
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: $73,117,937
Exercised Options: $73,117,937
Current Obligation: $73,117,937
Subaward Activity
Number of Subawards: 95
Total Subaward Amount: $44,321,872
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0002419D6200
IDV Type: IDC
Timeline
Start Date: 2023-04-10
Current End Date: 2026-07-31
Potential End Date: 2026-07-31 00:00:00
Last Modified: 2025-10-09
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