DoD awards $120.3M contract to Lockheed Martin for electronics and communication equipment demonstration and validation

Contract Overview

Contract Amount: $120,297,130 ($120.3M)

Contractor: Lockheed Martin Corp

Awarding Agency: Department of Defense

Start Date: 1998-12-18

End Date: 2014-07-31

Contract Duration: 5,704 days

Daily Burn Rate: $21.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 199903!1700!0873!BZ006!NAVAL SEA SYSTEMS COMMAND !N0002499C6212 !A!*!* !19981218!20031231!834951691!834951691!834951691!N!06JJ5!LOCKHEED MARTIN CORPORATION !6801 ROCKLEDGE DR !BETHESDA !MD!20817!07125!031!24!BETHESDA !MONTGOMERY !MARYLAND !0001!+000003260079!N!N!000000000000!AC64!RDTE/ELECTRONICS & COMMUNICATION EQ-DEMO/VALID !A7 !ELECTRONICS AND COMMUNICATION !2000!NOT DISCERNABLE OR CLASSIFIED !3812!3!*!*!*!B!A!*!A !N!U!2!002!B!* !Z!N!Z!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: SYRACUSE, ONONDAGA County, NEW YORK, 13221

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $120.3 million to LOCKHEED MARTIN CORP for work described as: 199903!1700!0873!BZ006!NAVAL SEA SYSTEMS COMMAND !N0002499C6212 !A!*!* !19981218!20031231!834951691!834951691!834951691!N!06JJ5!LOCKHEED MARTIN CORPORATION !6801 ROCKLEDGE DR !BETHESDA !MD!20817!07125!031!24!BETHESDA !MONTGO… Key points: 1. Contract value of $120.3M over its lifecycle. 2. Awarded under full and open competition. 3. Contract type is Cost Plus Fixed Fee, indicating potential for cost overruns. 4. Performance period spans over 15 years, from 1998 to 2014. 5. Focuses on RDTE/Electronics & Communication Equipment Demonstration/Validation. 6. Contractor is Lockheed Martin Corporation, a major defense contractor.

Value Assessment

Rating: fair

The contract value of $120.3 million for electronics and communication equipment demonstration and validation appears substantial, especially considering its long performance period. Without specific benchmarks for similar RDTE projects, it's difficult to definitively assess value for money. The Cost Plus Fixed Fee (CPFF) contract type suggests that the government bears the risk of cost overruns, which can sometimes lead to less price efficiency compared to fixed-price contracts. Further analysis would require comparing the delivered capabilities and performance against the initial objectives and similar industry R&D efforts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple bidders had the opportunity to submit proposals. The fact that it was competed broadly is a positive sign for price discovery. However, the number of actual bidders is not specified in the provided data, which would offer a clearer picture of the competitive intensity. A robust competition typically leads to more favorable pricing for the government.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down costs and encourage innovation, leading to better value for public funds.

Public Impact

The primary beneficiaries are likely the Department of Defense, specifically naval systems, through the advancement of electronics and communication technologies. The contract supports the demonstration and validation of critical electronic and communication equipment, enhancing military capabilities. Geographic impact is primarily within the United States, with potential for deployment globally. Workforce implications include highly skilled engineers, technicians, and researchers within Lockheed Martin and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can lead to cost overruns.
Long performance period (over 15 years) may indicate evolving requirements or extended development cycles.
Specific details on competition intensity (number of bidders) are not provided.
The nature of RDTE work can involve inherent uncertainties and risks.
Lack of specific performance metrics makes it hard to gauge success beyond demonstration/validation.

Positive Signals

Awarded under full and open competition, suggesting a competitive process.
Contractor is a well-established defense prime contractor with significant experience.
Focus on RDTE is crucial for technological advancement in defense.
Contract aims to demonstrate and validate new equipment, a critical phase in acquisition.

Sector Analysis

This contract falls within the Research, Development, Test, and Evaluation (RDTE) sector, specifically focusing on electronics and communication equipment. This is a critical area for defense modernization, involving significant investment in innovation and technology. The market for defense electronics is large and competitive, with major players like Lockheed Martin investing heavily in R&D to maintain technological superiority. Comparable spending benchmarks would typically involve other RDTE contracts for similar systems or platforms within the Department of Defense.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. As a large prime contract awarded to Lockheed Martin, it is possible that small businesses could be involved as subcontractors. However, without subcontracting plans or data, the direct impact on the small business ecosystem is not discernible from this information alone. Further investigation into subcontracting reports would be necessary.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Defense's contracting and program management offices, potentially involving the Defense Contract Management Agency (DCMA). Accountability measures would be tied to the terms of the Cost Plus Fixed Fee contract, requiring Lockheed Martin to report on costs and progress. Transparency is generally maintained through contract awards databases, though specific project details might be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Department of Defense Research and Development
Electronics and Communication Systems Procurement
Lockheed Martin Defense Contracts

Risk Flags

Long contract duration may indicate potential for cost growth or evolving requirements.
CPFF contract type shifts cost risk to the government.
Lack of specific bidder count limits assessment of competitive intensity.
RDTE work inherently carries technical and performance risks.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $120.3 million to LOCKHEED MARTIN CORP. 199903!1700!0873!BZ006!NAVAL SEA SYSTEMS COMMAND !N0002499C6212 !A!*!* !19981218!20031231!834951691!834951691!834951691!N!06JJ5!LOCKHEED MARTIN CORPORATION !6801 ROCKLEDGE DR !BETHESDA !MD!20817!07125!031!24!BETHESDA !MONTGOMERY !MARYLAND !0001!+000003260079!N!N!000000000000!AC64!RDTE/ELECTRONICS & COMMUNICATION EQ-DEMO/VALID !A7 !ELECTRONICS AND COMMUNICATION !2000!NOT DISCERNABLE OR CLASSIFIED !3812!3!*!*!*!B!A!*!A !N!U!2!0

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $120.3 million.

What is the period of performance?

Start: 1998-12-18. End: 2014-07-31.

What was the specific nature of the electronics and communication equipment being demonstrated and validated under this contract?

The provided data indicates the contract's purpose was RDTE/ELECTRONICS & COMMUNICATION EQ-DEMO/VALID. While the specific equipment is not detailed, this classification suggests the contract supported the early-stage development, testing, and validation of new or upgraded electronic and communication systems intended for naval applications. This could encompass a wide range of technologies, such as radar systems, communication suites, electronic warfare capabilities, or command and control systems. The demonstration and validation phase is critical for proving the feasibility and effectiveness of new technologies before proceeding to full-scale production or deployment, ensuring that the systems meet performance requirements and are suitable for their intended operational environment.

How does the $120.3 million total value compare to similar RDTE contracts for electronics and communication equipment?

Benchmarking the $120.3 million contract value against similar RDTE contracts for electronics and communication equipment requires access to a broader dataset of defense procurements. However, for a demonstration and validation phase over a period potentially exceeding 15 years, this value is within a plausible range for complex defense systems. Large prime contractors like Lockheed Martin often handle multi-million dollar RDTE efforts. Factors influencing cost include the technological sophistication, the number of prototypes or test articles, the duration of testing, and the level of system integration. Without specific comparable contracts for similar technological maturity levels and system scopes, a precise value-for-money assessment is challenging, but the scale suggests a significant undertaking.

What are the key risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude and duration?

The primary risk with a CPFF contract is that the government may end up paying more than anticipated if the contractor's costs exceed initial estimates, as the fee is a percentage of the final costs. For a contract valued at $120.3 million and spanning over 15 years, this risk is amplified. Potential cost overruns can occur due to unforeseen technical challenges inherent in RDTE, changes in material costs, labor rate fluctuations, or scope creep. The long duration also increases the likelihood of requirement changes or technological obsolescence, potentially leading to contract modifications and further cost increases. Effective oversight and robust cost controls by the government are crucial to mitigate these risks and ensure the contractor remains incentivized to manage expenses efficiently.

What is Lockheed Martin's track record with similar RDTE contracts for the Department of Defense?

Lockheed Martin Corporation is one of the largest defense contractors globally and has an extensive track record with the Department of Defense, including numerous RDTE contracts across various domains. They are known for their work on complex systems such as aircraft (e.g., F-35), missiles, satellites, and advanced electronics. Their history suggests a capability to manage large, technologically challenging programs. However, like any major contractor, they have also faced scrutiny regarding cost performance and schedule adherence on certain programs. For this specific contract, assessing their track record would involve examining past performance reviews, any documented issues related to cost overruns or delays on similar RDTE efforts, and their overall success in delivering validated technologies to the DoD.

How does the contract's performance period (1998-2014) reflect on the acquisition lifecycle for defense electronics?

The extended performance period of this contract, from December 1998 to July 2014 (over 15 years), highlights the lengthy and complex nature of defense acquisition, particularly for Research, Development, Test, and Evaluation (RDTE) programs. Developing and validating advanced electronics and communication equipment often involves significant technological hurdles, iterative design processes, and extensive testing phases. Such long durations can be necessary to mature cutting-edge technologies, adapt to evolving threats, or integrate systems across multiple platforms. However, they also carry risks of schedule delays, cost growth, and potential obsolescence if not managed effectively. This timeline suggests a program that likely underwent significant evolution or faced substantial developmental challenges during its lifecycle.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Address: 6801 ROCKLEDGE DR, BETHESDA, MD, 20817

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline