DoD Awards $130M to Lockheed Martin for Navigation Systems Production
Contract Overview
Contract Amount: $130,315,765 ($130.3M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2024-09-26
End Date: 2027-11-30
Contract Duration: 1,160 days
Daily Burn Rate: $112.3K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: BLQ-10 TI-24 FY24 PRODUCTION
Place of Performance
Location: LIVERPOOL, ONONDAGA County, NEW YORK, 13088
State: New York Government Spending
Plain-Language Summary
Department of Defense obligated $130.3 million to LOCKHEED MARTIN CORPORATION for work described as: BLQ-10 TI-24 FY24 PRODUCTION Key points: 1. Significant award to a major defense contractor. 2. Full and open competition suggests potential for competitive pricing. 3. Cost Plus Incentive Fee contract type introduces performance-based incentives. 4. Long-term contract duration (1160 days) indicates sustained need.
Value Assessment
Rating: good
The Cost Plus Incentive Fee (CPIF) contract type allows for shared savings if costs are below target, potentially leading to good value. The benchmark of $112,341 (BR) for this PSC code provides a reference point, though specific contract details are needed for a precise comparison.
Cost Per Unit: $112,341
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating multiple bidders were considered. This method generally promotes price discovery and competitive pricing, aiming for the best value for the government.
Taxpayer Impact: Full and open competition is expected to yield a fair price, maximizing taxpayer value by leveraging market forces.
Public Impact
Ensures continued availability of critical navigation systems for naval operations. Supports advanced technological development in defense systems. Impacts the defense industrial base and associated supply chains.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- CPIF contracts can lead to cost overruns if not managed effectively.
- Reliance on a single contractor for critical components.
- Potential for scope creep in long-term production contracts.
Positive Signals
- Awarded through full and open competition.
- Incentive fee structure encourages cost efficiency.
- Long-term award provides program stability.
Sector Analysis
This award falls within the Defense sector, specifically for navigation systems. Spending in this area is crucial for military readiness and technological superiority. Benchmarks for similar systems vary widely based on complexity and quantity.
Small Business Impact
While the prime contractor is Lockheed Martin, a large corporation, the contract may indirectly benefit small businesses through subcontracts. Further analysis would be needed to determine the extent of small business participation.
Oversight & Accountability
The Department of the Navy is responsible for oversight. The CPIF contract type necessitates close monitoring of costs and performance to ensure accountability and achieve target objectives.
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 Overruns
- Performance Below Expectations
- Schedule Delays
- Supply Chain Disruptions
Tags
search-detection-navigation-guidance-aer, department-of-defense, ny, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $130.3 million to LOCKHEED MARTIN CORPORATION. BLQ-10 TI-24 FY24 PRODUCTION
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 $130.3 million.
What is the period of performance?
Start: 2024-09-26. End: 2027-11-30.
What is the target cost and incentive fee structure for this contract?
The specific target cost and the incentive fee structure (e.g., sharing ratio for cost savings or overruns) are critical details not provided in the summary. Understanding these elements is essential for assessing the potential financial performance and the government's risk exposure under the Cost Plus Incentive Fee arrangement.
How does the awarded price compare to historical costs for similar navigation systems?
While a benchmark (BR) of $112,341 is provided, a direct comparison requires detailed analysis of the system's specifications, quantity, and the specific period of the benchmark. The $130.3 million award covers a significant production run over several years, making a simple per-unit comparison potentially misleading without further context.
What are the key performance metrics tied to the incentive fee?
The effectiveness of the incentive fee relies on clearly defined and measurable performance metrics. These could include delivery schedules, system reliability, technical performance specifications, or quality standards. Without knowing these specific metrics, it's difficult to fully evaluate how the CPIF structure will drive desired outcomes and ensure program success.
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: $130,315,765
Exercised Options: $130,315,765
Current Obligation: $130,315,765
Subaward Activity
Number of Subawards: 45
Total Subaward Amount: $48,005,116
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: 2024-09-26
Current End Date: 2027-11-30
Potential End Date: 2027-11-30 00:00:00
Last Modified: 2024-11-12
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