DoD Awards $20M+ to Lockheed Martin for NWS System Equipment and Spares
Contract Overview
Contract Amount: $19,959,077 ($20.0M)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2013-07-26
End Date: 2018-01-31
Contract Duration: 1,650 days
Daily Burn Rate: $12.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: NWS SYSTEM EQUIPMENT, NWS SUSTAINMENT SPARES, NWS RDT&E
Place of Performance
Location: SUNNYVALE, SANTA CLARA County, CALIFORNIA, 94089
Plain-Language Summary
Department of Defense obligated $20.0 million to LOCKHEED MARTIN CORP for work described as: NWS SYSTEM EQUIPMENT, NWS SUSTAINMENT SPARES, NWS RDT&E Key points: 1. Significant contract value exceeding $19.9 million for critical NWS system equipment and sustainment spares. 2. Sole-source award to Lockheed Martin Corp raises questions about competition and potential price inflation. 3. Contract duration of 1650 days suggests a long-term need for these specialized security systems. 4. The contract falls under the Security Systems Services category, indicating a focus on defense infrastructure.
Value Assessment
Rating: questionable
The contract's cost-plus-fixed-fee structure, combined with a sole-source award, makes a direct pricing assessment difficult. Without competitive bids, it's hard to determine if the $19.9M represents fair market value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Lockheed Martin Corp. This lack of competition limits price discovery and may lead to higher costs for the government.
Taxpayer Impact: The absence of competition on a nearly $20 million contract raises concerns about taxpayer value and the potential for overspending.
Public Impact
National Weather Service (NWS) systems are critical for weather forecasting and public safety. The reliance on a single contractor for essential equipment and spares could create supply chain vulnerabilities. Long-term sustainment contracts can lock in costs and limit opportunities for technological upgrades.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Cost-plus-fixed-fee pricing
- Long contract duration
Positive Signals
- Essential system sustainment
- Award to established defense contractor
Sector Analysis
This contract for security systems services, specifically for NWS equipment and spares, falls within the broader defense sector. Benchmarks for similar specialized security system contracts are difficult to ascertain due to the unique nature of NWS equipment.
Small Business Impact
The contract was awarded to Lockheed Martin Corp, a large defense contractor. There is no indication that small businesses were involved in this specific sole-source award, limiting opportunities for them.
Oversight & Accountability
The sole-source nature of this contract warrants close oversight to ensure costs are reasonable and performance meets requirements. Transparency in pricing and justification for the lack of competition is crucial.
Related Government Programs
- Security Systems Services (except Locksmiths)
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits competition.
- Potential for inflated pricing due to lack of competition.
- Cost-plus-fixed-fee structure shifts cost risk to the government.
- Long contract duration may not reflect current market conditions.
- Lack of small business participation.
Tags
security-systems-services-except-locksmi, department-of-defense, ca, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $20.0 million to LOCKHEED MARTIN CORP. NWS SYSTEM EQUIPMENT, NWS SUSTAINMENT SPARES, NWS RDT&E
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORP.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $20.0 million.
What is the period of performance?
Start: 2013-07-26. End: 2018-01-31.
What was the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair pricing?
The provided data indicates a sole-source award, meaning it was not competed. A thorough review would require access to the contract file to understand the specific justification, such as unique capabilities or urgent need. Without competitive bids, ensuring fair pricing relies heavily on robust government cost analysis and negotiation.
What are the potential risks associated with relying on a single supplier for critical NWS system equipment and sustainment spares?
Sole-source reliance creates significant risks, including potential price gouging, supply chain disruptions if the contractor faces issues, and a lack of incentive for innovation or cost reduction. It also limits the government's ability to leverage competitive market forces for better terms or alternative solutions.
How does the cost-plus-fixed-fee structure impact the government's ability to control costs on this long-term contract?
Cost-plus-fixed-fee contracts allow the contractor to recover all allowable costs plus a predetermined fixed fee. While the fee provides some incentive for efficiency, the government bears the risk of cost overruns. This structure can be less cost-effective than fixed-price contracts, especially for long durations, if not managed with stringent oversight.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Investigation and Security Services › Security Systems Services (except Locksmiths)
Product/Service Code: ALARM, SIGNAL, SECURITY DETECTION
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 1111 LOCKHEED MARTIN WAY BLDG 157, SUNNYVALE, CA, 94089
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $19,959,077
Exercised Options: $19,959,077
Current Obligation: $19,959,077
Subaward Activity
Number of Subawards: 3
Total Subaward Amount: $5,123,296
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2013-07-26
Current End Date: 2018-01-31
Potential End Date: 2018-01-31 00:00:00
Last Modified: 2021-04-19
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