Lockheed Martin awarded $1.02B for miscellaneous communication equipment, with a 1998 start date

Contract Overview

Contract Amount: $102,326,060 ($102.3M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 1998-06-03

End Date: 2002-11-30

Contract Duration: 1,641 days

Daily Burn Rate: $62.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 199809!1700!2980!BZ006!NAVAL SEA SYSTEMS COMMAND !N0002498C6201 !A!*!* !19980603!19990715!826412801!834951691!834951691!N!52088!LOCKHEED MARTIN CORPORATION !9500 GODWIN DR !MANASSAS !VA!20110!48952!683!51!MANASSAS !MANASSAS (CITY) !VIRGINIA !0001!+000006535569!N!N!000000000000!5895!MISCELLANEOUS COMMUNICATION EQUIPMENT !A7 !ELECTRONICS AND COMMUNICATION !2000!NOT DISCERNABLE OR CLASSIFIED !3812!3!*!*!*!B!A!*!D !N!J!1!001!N!1G!A!Y!A!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: MANASSAS, PRINCE WILLIAM County, VIRGINIA, 20110

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $102.3 million to LOCKHEED MARTIN CORPORATION for work described as: 199809!1700!2980!BZ006!NAVAL SEA SYSTEMS COMMAND !N0002498C6201 !A!*!* !19980603!19990715!826412801!834951691!834951691!N!52088!LOCKHEED MARTIN CORPORATION !9500 GODWIN DR !MANASSAS !VA!20110!48952!683!51!MANASSAS !MANASS… Key points: 1. Contract awarded as a definitive contract with a firm fixed price. 2. Significant value suggests a critical or long-term need for communication equipment. 3. Sole-source award raises questions about competition and potential cost efficiencies. 4. Contract duration spans over four years, indicating a substantial project lifecycle. 5. Awarded to a single, large defense contractor, potentially limiting broader industry participation. 6. Geographic location of the contractor is in Manassas, Virginia.

Value Assessment

Rating: questionable

The contract value of over $1 billion for miscellaneous communication equipment is substantial. Without comparable contract data or detailed cost breakdowns, it is difficult to definitively assess value for money. However, the sole-source nature of the award, coupled with the significant dollar amount, suggests a potential for inflated costs compared to a competitively bid scenario. Benchmarking against similar communication equipment procurements, especially those that were competitively sourced, would be necessary for a more robust evaluation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. The data indicates that only one bidder, Lockheed Martin Corporation, was considered. This approach is typically used when a unique capability or proprietary technology is required, or in situations where only one source is available. The lack of competition means that price discovery through market forces was absent, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without competing offers, the government did not benefit from potential cost savings that could have arisen from multiple vendors vying for the contract.

Public Impact

The primary beneficiary is the U.S. Navy, likely receiving advanced communication equipment. Services delivered include the provision of miscellaneous communication equipment. The geographic impact is concentrated around the contractor's location in Virginia, but the equipment's use is likely global for naval operations. Workforce implications include employment at Lockheed Martin's facilities in Manassas, VA, and potentially at supplier sites.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and potentially increases costs.
Lack of detailed performance metrics makes it hard to assess effectiveness.
Contract duration is long, increasing exposure to potential cost overruns or obsolescence.

Positive Signals

Awarded to a major defense contractor with a track record in aerospace and defense.
Firm fixed price contract provides cost certainty for the government.
Contract is for essential communication equipment, vital for defense operations.

Sector Analysis

This contract falls within the Defense sector, specifically related to electronics and communication equipment. The market for defense communication systems is characterized by high technological sophistication, long development cycles, and significant government investment. Spending in this area is often driven by national security requirements and technological advancements. Comparable spending benchmarks would typically involve other large-scale procurements of communication systems for military branches, often awarded to prime defense contractors.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it explicitly mention subcontracting plans for small businesses. As a large sole-source award to a major prime contractor, the direct impact on small businesses is likely minimal unless Lockheed Martin actively engages them for subcontracting opportunities. The absence of set-aside provisions means that small businesses did not have a direct avenue to compete for this specific contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contract management agencies, such as the Defense Contract Management Agency (DCMA). Accountability measures would be tied to the firm fixed price terms and delivery schedules. Transparency is limited due to the sole-source nature and the potential for classified aspects of communication equipment. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse.

Related Government Programs

Naval Sea Systems Command Contracts
Department of Defense Communication Equipment Procurements
Lockheed Martin Defense Contracts
Sole-Source Defense Contracts
Firm Fixed Price Defense Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Technology obsolescence risk
Broad service/equipment category

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $102.3 million to LOCKHEED MARTIN CORPORATION. 199809!1700!2980!BZ006!NAVAL SEA SYSTEMS COMMAND !N0002498C6201 !A!*!* !19980603!19990715!826412801!834951691!834951691!N!52088!LOCKHEED MARTIN CORPORATION !9500 GODWIN DR !MANASSAS !VA!20110!48952!683!51!MANASSAS !MANASSAS (CITY) !VIRGINIA !0001!+000006535569!N!N!000000000000!5895!MISCELLANEOUS COMMUNICATION EQUIPMENT !A7 !ELECTRONICS AND COMMUNICATION !2000!NOT DISCERNABLE OR CLASSIFIED !3812!3!*!*!*!B!A!*!D !N!J!1!0

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $102.3 million.

What is the period of performance?

Start: 1998-06-03. End: 2002-11-30.

What is the specific type of 'miscellaneous communication equipment' procured under this contract?

The provided data classifies the item under PSC (Product Service Code) 5895 as 'MISCELLANEOUS COMMUNICATION EQUIPMENT'. This is a broad category that can encompass a wide range of devices, from radios and satellite terminals to specialized data links and command and control systems. Without further details or access to the contract's statement of work, the precise nature of the equipment remains unspecified. Given the awardee and the awarding agency (Naval Sea Systems Command), it is highly probable that this equipment is intended for naval operations, potentially including shipboard systems, shore-based communications, or deployable units requiring robust and secure communication capabilities.

Why was this contract awarded on a sole-source basis?

The data explicitly states the contract type as 'NOT COMPETED', indicating a sole-source award. Common justifications for sole-source procurements include situations where only one responsible source exists, a unique capability is required, or there is a compelling urgency that precludes full and open competition. For defense contracts, this often relates to proprietary technology, specialized systems integration, or follow-on work to existing platforms where only the original equipment manufacturer can provide the necessary components or services. Without additional documentation, the specific rationale for this sole-source award to Lockheed Martin remains undisclosed in the provided data.

How does the $1.02 billion contract value compare to similar procurements for communication equipment?

The $1.02 billion value is a substantial sum for communication equipment. To benchmark this, one would need to compare it against other large-scale procurements of similar systems, particularly those awarded by the Department of Defense or other military branches. However, direct comparisons are challenging due to the 'miscellaneous' classification and the sole-source nature of this award. Competitively bid contracts for advanced communication systems can vary widely in price depending on technological sophistication, quantity, and specific functionalities. A sole-source award of this magnitude may indicate a highly specialized or integrated system, but it also raises concerns about whether a more competitive process could have yielded better pricing for the government.

What is Lockheed Martin's track record with the Naval Sea Systems Command for similar contracts?

Lockheed Martin Corporation is a major defense contractor with a long-standing relationship with the U.S. Navy and its various commands, including Naval Sea Systems Command (NAVSEA). While this specific contract is for 'miscellaneous communication equipment', Lockheed Martin is well-known for its work on naval platforms, combat systems, and related technologies. Their track record with NAVSEA likely includes numerous contracts for complex systems integration, platform modernization, and the supply of various components and equipment. The award of a significant sole-source contract suggests a level of trust and established capability in meeting NAVSEA's requirements, although the specifics of their past performance on communication equipment would require a deeper dive into contract history databases.

What are the potential risks associated with a sole-source contract of this size and duration?

A sole-source contract of this magnitude ($1.02 billion) and duration (over four years, with potential for extensions implied by the start/end dates) carries several risks. Firstly, the lack of competition can lead to higher prices than might be achieved through a competitive bidding process, as the government does not benefit from market-driven cost reductions. Secondly, there's a risk of contractor complacency or reduced incentive to innovate or control costs once the contract is secured. Thirdly, the long duration increases the potential for cost overruns if not managed tightly, and the risk of the procured technology becoming obsolete before the contract concludes, especially in the rapidly evolving field of communications. Finally, sole-source awards can sometimes indicate a lack of available alternative sources or a failure in acquisition planning to foster a competitive environment.

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 9500 GODWIN DR, MANASSAS, VA, 20110

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline