DoD awards $42.8M R&D contract to Lockheed Martin for advanced technology development
Contract Overview
Contract Amount: $42,804,940 ($42.8M)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2018-06-28
End Date: 2020-09-30
Contract Duration: 825 days
Daily Burn Rate: $51.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: IGF::CT::IGF HBTD
Place of Performance
Location: SUNNYVALE, SANTA CLARA County, CALIFORNIA, 94089
Plain-Language Summary
Department of Defense obligated $42.8 million to LOCKHEED MARTIN CORP for work described as: IGF::CT::IGF HBTD Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee (CPFF), which can lead to cost overruns if not managed carefully. 3. The contractor, Lockheed Martin, is a major defense contractor with extensive experience in R&D. 4. The contract duration of 825 days indicates a significant, multi-year research effort. 5. The contract is categorized under Research and Development in Physical, Engineering, and Life Sciences. 6. The award amount of $42.8 million falls within a moderate spending range for complex R&D projects.
Value Assessment
Rating: good
The contract value of $42.8 million for advanced R&D is within the expected range for a major defense contractor like Lockheed Martin. Benchmarking against similar R&D contracts in the physical and engineering sciences would provide further context on value for money. The CPFF structure necessitates close oversight to ensure costs remain reasonable relative to the research objectives.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. The presence of two bids suggests a degree of competition, though the specific number of bidders can influence price discovery. A higher number of bidders generally leads to more competitive pricing.
Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple companies to bid, potentially driving down costs and ensuring the government receives the best value.
Public Impact
The primary beneficiaries are the Department of Defense and potentially the U.S. military, through advancements in technology. The contract supports research and development in physical, engineering, and life sciences, contributing to technological innovation. The contract is associated with California, suggesting potential workforce and economic impact in that state. The development of new technologies could lead to enhanced national security capabilities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contracts can incentivize contractors to incur higher costs to achieve a fixed fee, potentially leading to budget overruns if not closely monitored.
- The significant value of the contract may indicate a complex and potentially high-risk research endeavor.
Positive Signals
- Awarded through full and open competition, suggesting a robust and fair bidding process.
- Contractor is a well-established entity with a strong track record in defense R&D.
- The contract focuses on research and development, which is crucial for technological advancement and national security.
Sector Analysis
This contract falls within the broader aerospace and defense sector, specifically focusing on research and development. The market for defense R&D is characterized by large, established players like Lockheed Martin, with significant government investment. Comparable spending benchmarks for advanced R&D contracts in physical and engineering sciences can vary widely based on project scope and technological complexity.
Small Business Impact
The contract does not indicate any specific small business set-aside. Given the nature of the work and the prime contractor, it is possible that small businesses could be involved as subcontractors, but this is not explicitly detailed in the provided data. Further analysis would be needed to determine subcontracting opportunities for small businesses.
Oversight & Accountability
Oversight for this contract would typically be managed by the Department of the Navy, with potential involvement from the Department of Defense's Inspector General. Accountability measures would be tied to the contract's performance metrics and reporting requirements. Transparency is generally maintained through contract award databases and public reporting, though specific R&D details may be sensitive.
Related Government Programs
- Department of Defense Research and Development Programs
- Advanced Technology Development Contracts
- Naval Research and Development Initiatives
Risk Flags
- Cost Plus Fixed Fee contract type can lead to cost overruns if not managed effectively.
- Reliance on a single large prime contractor may limit broader competition and innovation.
- Advanced R&D inherently carries technical and programmatic risks.
Tags
department-of-defense, department-of-the-navy, research-and-development, lockheed-martin-corp, cost-plus-fixed-fee, full-and-open-competition, definitive-contract, california, physical-engineering-life-sciences, advanced-technology
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $42.8 million to LOCKHEED MARTIN CORP. IGF::CT::IGF HBTD
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 $42.8 million.
What is the period of performance?
Start: 2018-06-28. End: 2020-09-30.
What is Lockheed Martin's track record with similar Cost Plus Fixed Fee R&D contracts with the Department of Defense?
Lockheed Martin has a long and extensive history of performing Cost Plus Fixed Fee (CPFF) Research and Development (R&D) contracts with the Department of Defense (DoD). As one of the largest defense contractors globally, they routinely engage in complex, multi-year R&D projects across various domains, including aerospace, defense systems, and advanced technologies. Their track record with CPFF contracts generally involves managing significant budgets and technical challenges. While specific performance metrics for individual contracts are often not publicly disclosed, their continued success in securing large R&D awards suggests a capacity to meet contractual obligations and deliver on research objectives. However, like any large contractor, there may be instances of cost variances or performance challenges on specific projects, which are typically addressed through contract modifications, negotiations, or oversight mechanisms. A detailed review of their past performance on similar CPFF R&D contracts would involve examining contract close-out data, audit reports, and any publicly available performance evaluations.
How does the $42.8 million award compare to other DoD R&D contracts in physical, engineering, and life sciences?
The $42.8 million award to Lockheed Martin for R&D in physical, engineering, and life sciences is a substantial but not exceptionally large sum within the context of the Department of Defense's overall R&D spending. The DoD invests billions annually in research and development, with individual contracts ranging from a few million dollars for specialized studies to hundreds of millions or even billions for major system development and advanced research programs. Contracts in the $10 million to $100 million range are common for significant R&D efforts that require specialized expertise and extended timelines. This particular contract's value suggests a focused, yet comprehensive, research initiative rather than a foundational or exploratory project. To provide a precise comparison, one would need to analyze the specific sub-disciplines within physical, engineering, and life sciences, as well as the contract's objectives and deliverables, against a database of similar DoD R&D awards.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for advanced R&D?
The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract, particularly for advanced Research and Development (R&D), revolve around cost control and scope definition. For the government, the main risk is that the contractor may not have a strong incentive to control costs, as their fee is fixed regardless of the actual expenses incurred. This can lead to cost overruns if the contractor is inefficient or if unforeseen technical challenges significantly increase expenses. The government bears the risk of paying for costs that exceed initial estimates. For the contractor, the risk lies in accurately estimating the costs required to achieve the R&D objectives. If the actual costs significantly exceed their estimates, their fixed fee may not adequately compensate them for their effort and investment, potentially leading to financial losses. Effective management, clear statement of work, and robust oversight are crucial to mitigate these risks.
What are the implications of awarding this R&D contract to a single large prime contractor like Lockheed Martin?
Awarding a significant R&D contract to a single large prime contractor like Lockheed Martin has several implications. On the positive side, it leverages the contractor's extensive resources, established infrastructure, deep technical expertise, and proven project management capabilities, which can be crucial for complex, high-risk research endeavors. This can lead to efficient execution and potentially faster development cycles. However, it also concentrates risk with one entity and may limit opportunities for smaller, innovative firms to participate directly as prime contractors. Furthermore, reliance on a single large contractor can reduce competitive pressure on future procurements within that technology area. The government must ensure strong oversight to maintain leverage and ensure fair pricing, and may encourage the prime contractor to subcontract with smaller businesses to foster broader innovation and economic impact.
How does the geographic location (California) potentially influence the execution and outcomes of this R&D contract?
The contract's association with California suggests that the research and development activities will likely be conducted at Lockheed Martin facilities within the state, or involve personnel and resources based there. California has a robust ecosystem for aerospace, defense, and technology industries, offering access to a highly skilled workforce, specialized research institutions, and a network of potential subcontractors and suppliers. This concentration of talent and resources can be advantageous for executing complex R&D projects, potentially accelerating innovation and problem-solving. However, operating in a high-cost-of-living and high-wage state like California can also contribute to higher labor costs, which are factored into the CPFF contract's overall expenses. The specific impact on outcomes would depend on the precise nature of the R&D and how effectively the available regional expertise is leveraged.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: BASIC RESEARCH
Solicitation ID: N0003017R0015
Offers Received: 2
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 1111 LOCKHEED MARTIN WAY, 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: $42,804,940
Exercised Options: $42,804,940
Current Obligation: $42,804,940
Actual Outlays: $892,372
Subaward Activity
Number of Subawards: 32
Total Subaward Amount: $223,491,277
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NOT OBTAINED - WAIVED
Timeline
Start Date: 2018-06-28
Current End Date: 2020-09-30
Potential End Date: 2020-09-30 00:00:00
Last Modified: 2022-07-26
More Contracts from Lockheed Martin Corp
- Federal Contract — $48.1B (Department of Energy)
- TAS::80 0124::TAS Design, Development, Test&evaluation of Project Orion — $15.5B (National Aeronautics and Space Administration)
- 200207!000021!5700!CZ62 !smc/Pkj LOS Angeles AFB !F0470102C0002 !A!N! !N! !20011116!20070630!872978978!196596688!834951691!n!lockheed Martin Corporation !1111 Lockheed Martin WAY !sunnyvale !ca!94089!77000!085!06!sunnyvale !santa Clara !california!+000012250000!n!n!000000000000!ar92!rdte/Space - Other - Applied Research !A2 !missile and Space Systems !3gfk!milstar !541710!E! !1! ! ! ! ! !99990909!B! ! !B! !d!n!j!2!001!n!2a!z!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! — $9.0B (Department of Defense)
- Next Generation Overhead Persistent Infrared Geosynchronous Earth Orbit Space Vehicle 1-3 Phase 1 — $7.3B (Department of Defense)
- Federal Contract — $7.3B (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)