DoD awards $98.5M for TRIDENT II (D5) Navigation Subsystem to Lockheed Martin, a sole-source contract

Contract Overview

Contract Amount: $98,522,298 ($98.5M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2013-10-01

End Date: 2018-12-31

Contract Duration: 1,917 days

Daily Burn Rate: $51.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: TRIDENT II (D5) NAVIGATION SUBSYSTEM

Place of Performance

Location: UNIONDALE, NASSAU County, NEW YORK, 11553

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $98.5 million to LOCKHEED MARTIN CORPORATION for work described as: TRIDENT II (D5) NAVIGATION SUBSYSTEM Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Significant duration of 1917 days suggests a long-term, critical need. 3. Cost Plus Incentive Fee (CPIF) contract type allows for shared cost savings and performance incentives. 4. The contract is for engineering services, indicating a focus on technical development and support. 5. The value of the contract is substantial, reflecting the complexity and importance of the TRIDENT II program. 6. The awardee, Lockheed Martin, is a major defense contractor with extensive experience in strategic systems.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source contract is challenging due to the lack of competitive bids. The Cost Plus Incentive Fee structure aims to control costs by incentivizing efficiency, but the final price can vary. Without comparable sole-source awards for similar navigation subsystems, a precise value-for-money assessment is difficult. However, the long contract duration and the critical nature of the TRIDENT II program suggest that the pricing reflects significant technical expertise and program management.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one responsible source is available or when a compelling justification for other than full and open competition exists. The lack of competition means that the government did not benefit from the price discovery mechanisms inherent in a competitive bidding process.

Taxpayer Impact: Taxpayers may not have received the lowest possible price due to the absence of competitive pressure. The justification for sole-source procurement needs to be robust to ensure fair pricing.

Public Impact

The primary beneficiaries are the Department of Defense and the U.S. Navy, ensuring the operational readiness of the TRIDENT II (D5) missile system. Services delivered include critical engineering support for the navigation subsystem, vital for strategic deterrence. The geographic impact is national, supporting strategic defense capabilities, with specific operational bases likely in the U.S. Workforce implications include employment for highly skilled engineers and technical staff at Lockheed Martin and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially impacting cost-effectiveness.
Cost Plus Incentive Fee contracts can lead to cost overruns if not managed stringently.
The critical nature of the system means any performance issues could have significant national security implications.

Positive Signals

Award to a proven, experienced contractor (Lockheed Martin) reduces technical risk.
The CPIF contract structure includes incentives for cost control and performance.
The long contract duration indicates a stable, long-term commitment to a critical defense capability.

Sector Analysis

This contract falls within the Defense sector, specifically supporting strategic missile systems. The market for such specialized navigation subsystems is highly concentrated, with a limited number of contractors possessing the necessary security clearances and technical expertise. Spending in this area is driven by national security requirements and the lifecycle management of strategic assets. Comparable spending would be within other major defense procurement programs for critical weapon system components.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Given the specialized nature of the TRIDENT II (D5) navigation subsystem and the sole-source award to a large prime contractor, the direct impact on small businesses through set-asides is unlikely. However, Lockheed Martin may engage small businesses as subcontractors for specific components or services, contributing indirectly to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The Cost Plus Incentive Fee structure requires careful monitoring of costs and performance metrics to ensure accountability. Transparency may be limited due to the sole-source nature and the classified aspects of the TRIDENT II program. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse.

Related Government Programs

TRIDENT II (D5) Missile Program
Submarine Launched Ballistic Missiles (SLBM)
Strategic Weapons Systems
Navigation and Guidance Systems
Department of Defense Major Defense Acquisition Programs

Risk Flags

Sole-source award
Cost-plus contract type
Critical defense system

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $98.5 million to LOCKHEED MARTIN CORPORATION. TRIDENT II (D5) NAVIGATION SUBSYSTEM

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 $98.5 million.

What is the period of performance?

Start: 2013-10-01. End: 2018-12-31.

What is Lockheed Martin's track record with the TRIDENT II (D5) program and similar strategic systems?

Lockheed Martin has a long and established history as the prime contractor for the TRIDENT II (D5) missile system, including its navigation and guidance subsystems. The company has been instrumental in the development, production, and sustainment of these critical strategic assets for decades. Their expertise extends to other major defense programs involving complex weapon systems, missile defense, and space-based technologies. This extensive experience provides a strong foundation for managing the technical and programmatic challenges associated with the TRIDENT II (D5) navigation subsystem, suggesting a low technical risk associated with their performance on this contract.

How does the pricing of this contract compare to similar sole-source procurements for advanced navigation systems?

Direct comparison of pricing for this specific contract is difficult due to its sole-source nature and the unique, highly specialized requirements of the TRIDENT II (D5) navigation subsystem. Sole-source procurements inherently lack the price discovery benefits of competition. While the Cost Plus Incentive Fee (CPIF) structure aims to align contractor and government interests for cost efficiency, the baseline cost and incentive targets are negotiated. Benchmarking would require access to data on other sole-source awards for comparable strategic navigation systems, which is often not publicly available due to national security sensitivities. The $98.5 million award over approximately five years suggests a significant investment in maintaining a critical defense capability.

What are the primary risks associated with this sole-source contract for the TRIDENT II (D5) navigation subsystem?

The primary risk is the lack of competitive pressure inherent in a sole-source award, which could potentially lead to less favorable pricing for the government compared to a competed scenario. Another risk relates to the Cost Plus Incentive Fee (CPIF) contract type; while designed to incentivize performance and cost control, it requires robust government oversight to ensure that costs do not escalate beyond projections and that incentives are effectively structured. Technical risks, though potentially mitigated by Lockheed Martin's experience, always exist with complex, long-lifecycle systems like the TRIDENT II (D5). Furthermore, any disruptions in the supply chain for specialized components or a decline in the availability of highly skilled personnel could pose risks to program continuity.

How effective is the Cost Plus Incentive Fee (CPIF) structure in managing costs and ensuring performance for this type of contract?

The CPIF structure is generally considered an effective tool for managing costs and performance on complex, high-risk contracts where the final costs are difficult to estimate precisely at the outset. It incentivizes the contractor to control costs by sharing in any savings below a target cost and sharing in any cost overruns above the target cost, up to a ceiling. For the TRIDENT II (D5) navigation subsystem, this means Lockheed Martin has a financial incentive to be efficient. However, the effectiveness hinges on the realism of the target cost, the fairness of the sharing ratio, and the clarity and measurability of the performance incentives. Diligent government oversight is crucial to ensure the CPIF structure achieves its intended outcomes and does not become a mechanism for cost padding.

What are the historical spending patterns for the TRIDENT II (D5) navigation subsystem, and how does this award fit within them?

Historical spending on the TRIDENT II (D5) program, including its navigation subsystems, has been substantial and consistent over several decades, reflecting its role as a cornerstone of U.S. strategic deterrence. This $98.5 million award for engineering services from 2013 to 2018 represents a segment of the ongoing sustainment and modernization efforts for the system. Previous contracts would have covered initial development, production, and subsequent upgrades or maintenance. This particular award appears to focus on the engineering services required to maintain the operational readiness and potentially enhance the capabilities of the navigation subsystem over its extended service life. It fits within a pattern of continuous investment in this critical strategic asset.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: QUALITY CONTROL, TEST, INSPECTION › QUALITY CONTROL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 55 CHARLES LINDBERGH BLVD, UNIONDALE, NY, 11553

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $214,350,777

Exercised Options: $200,428,358

Current Obligation: $98,522,298

Actual Outlays: $104,161

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $604,103

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline