DoD awards $26.7M for TI-22 production, with Lockheed Martin securing the deal

Contract Overview

Contract Amount: $26,755,044 ($26.8M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2024-03-22

End Date: 2026-06-30

Contract Duration: 830 days

Daily Burn Rate: $32.2K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: TI-22 PRODUCTION ORDER

Place of Performance

Location: SYRACUSE, ONONDAGA County, NEW YORK, 13221

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $26.8 million to LOCKHEED MARTIN CORPORATION for work described as: TI-22 PRODUCTION ORDER Key points: 1. Value for money assessed through competitive bidding and firm fixed-price structure. 2. Competition dynamics indicate a robust market for advanced navigation systems. 3. Risk indicators are low due to established contractor and fixed-price terms. 4. Performance context relies on Lockheed Martin's track record in defense systems. 5. Sector positioning places this contract within the critical defense navigation technology market.

Value Assessment

Rating: good

The $26.7 million award for TI-22 production appears reasonable given the specialized nature of the equipment and the firm fixed-price contract type, which shifts cost risk to the contractor. Benchmarking against similar advanced navigation system procurements would provide further insight, but the competitive award suggests a fair market price was likely achieved. The duration of the contract (830 days) also aligns with typical production cycles for complex defense systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting multiple bidders likely vied for the opportunity. The presence of a competitive process is a positive sign for price discovery and ensures that the government receives offers from a wide range of qualified contractors. The specific number of bidders is not provided, but the 'full and open' designation implies a healthy competitive environment.

Taxpayer Impact: A full and open competition generally leads to better pricing for taxpayers by fostering a competitive environment where contractors are incentivized to offer their best prices.

Public Impact

The U.S. Department of the Navy benefits from the acquisition of critical TI-22 production systems. These systems are essential for enhancing search, detection, navigation, guidance, and aeronautical/nautical operations. The contract supports advanced technological capabilities for naval operations. Workforce implications include potential employment opportunities within Lockheed Martin and its supply chain, particularly in New York.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for sole-source follow-on contracts if TI-22 proves uniquely critical.
Dependence on a single prime contractor (Lockheed Martin) for production continuity.
Geopolitical factors could impact supply chain stability for specialized components.

Positive Signals

Awarded through full and open competition, indicating broad market interest.
Firm fixed-price contract type mitigates cost overrun risks for the government.
Lockheed Martin has a strong track record in defense systems manufacturing.
Contract supports critical national defense capabilities.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on the manufacturing of advanced navigation and guidance systems. The North American Industry Classification System (NAICS) code 334511 covers Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing. The market for such systems is characterized by high technological barriers to entry, significant R&D investment, and a primary customer base in government defense agencies. Spending in this sub-sector is substantial, driven by ongoing modernization efforts and the need for superior operational capabilities.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a set-aside provision. However, as a large prime contractor, Lockheed Martin may engage small businesses within its supply chain for components or services, though this is not mandated by the contract terms provided.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Navy and the Department of Defense. The firm fixed-price nature of the contract simplifies some aspects of financial oversight by setting a ceiling on costs. Accountability measures are inherent in the contract's performance requirements and delivery schedules. Transparency is facilitated by the public nature of contract awards, though specific performance metrics and detailed oversight reports may not be publicly available.

Related Government Programs

Naval Navigation Systems
Defense Electronics Manufacturing
Aeronautical and Nautical Instruments
Lockheed Martin Defense Contracts

Risk Flags

Potential for supply chain vulnerabilities.
Risk of technological obsolescence.
Dependence on prime contractor performance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.8 million to LOCKHEED MARTIN CORPORATION. TI-22 PRODUCTION ORDER

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 $26.8 million.

What is the period of performance?

Start: 2024-03-22. End: 2026-06-30.

What is Lockheed Martin's track record with similar defense navigation system contracts?

Lockheed Martin Corporation has an extensive and well-established track record in developing and producing complex defense systems, including navigation, guidance, and sensor technologies. They are a primary contractor for numerous U.S. military programs across all branches. Historically, they have demonstrated capability in delivering sophisticated electronic systems, often involving long-term production cycles and significant technological integration. Their performance on previous, similar contracts would likely involve meeting stringent military specifications, adhering to delivery schedules, and managing complex supply chains. While specific contract performance data is often proprietary, their sustained position as a leading defense contractor suggests a generally positive history of fulfilling demanding requirements, though like any large entity, they may have faced specific challenges or reviews on individual programs.

How does the $26.7 million award compare to other recent procurements for advanced navigation systems?

Benchmarking the $26.7 million award for the TI-22 production order requires comparing it to contracts for systems with similar technological sophistication, production volume, and scope. Advanced navigation and guidance systems are often highly specialized and can vary significantly in cost based on factors like sensor technology, integration complexity, software development, and intended platform (e.g., aircraft, ship, missile). A $26.7 million award for a production order, especially if it involves a substantial quantity or a particularly cutting-edge system, could be considered moderate to significant. Without specific details on the quantity of TI-22 units or their exact capabilities, direct comparison is challenging. However, procurements for components of major defense platforms or standalone advanced systems can range from tens of millions to hundreds of millions of dollars. The firm fixed-price nature and competitive award suggest an effort to achieve value, but a detailed market analysis of comparable systems would be needed for a definitive value assessment.

What are the primary risks associated with this TI-22 production contract?

The primary risks associated with this TI-22 production contract, despite being a firm fixed-price award to an established contractor, include potential supply chain disruptions for specialized components, unforeseen manufacturing challenges that could impact delivery schedules, and the risk of technological obsolescence if the system's capabilities are rapidly surpassed by emerging technologies. While Lockheed Martin has a strong track record, any large-scale production carries inherent risks related to quality control and integration. Furthermore, geopolitical events could impact the availability or cost of raw materials or critical sub-components sourced internationally. The long-term supportability and maintainability of the system also present a potential risk if not adequately planned for during the production phase.

How effective is the firm fixed-price contract type in ensuring program effectiveness for this type of defense procurement?

The firm fixed-price (FFP) contract type is generally considered effective for ensuring program effectiveness in procurements like the TI-22 production order, particularly when the scope of work and technical requirements are well-defined. FFP shifts the majority of cost risk from the government to the contractor (Lockheed Martin), incentivizing them to manage costs efficiently and adhere to the agreed-upon price. This can lead to greater cost certainty for the government and encourages the contractor to focus on meeting performance specifications and delivery timelines to maximize profit. For a production order where the design and requirements are likely mature, FFP is a suitable choice. However, if unforeseen technical challenges arise that significantly deviate from the initial scope, the contractor might face financial strain, potentially impacting delivery or quality if not managed proactively.

What are the historical spending patterns for navigation and guidance systems within the Department of the Navy?

Historical spending patterns for navigation and guidance systems within the Department of the Navy (DoN) typically show consistent and substantial investment, reflecting the critical role these technologies play in naval operations across surface, subsurface, and air platforms. The DoN procures a wide array of such systems, ranging from inertial navigation units and GPS receivers to advanced radar and sonar systems for detection and targeting. Spending is often driven by platform modernization programs, new platform acquisitions, and the need to maintain technological superiority. Major defense contractors like Lockheed Martin, Raytheon, and BAE Systems are frequent recipients of these awards. Annual spending can fluctuate based on budget allocations, specific program milestones (e.g., full-rate production starts), and the introduction of new technological requirements. Overall, it represents a significant and enduring segment of the DoN's procurement budget.

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: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

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: $26,755,044

Exercised Options: $26,755,044

Current Obligation: $26,755,044

Subaward Activity

Number of Subawards: 30

Total Subaward Amount: $12,153,377

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