DoD's $36.6M CSD System Development contract awarded to Lockheed Martin Sippican, Inc. for navigation instruments

Contract Overview

Contract Amount: $36,601,768 ($36.6M)

Contractor: Lockheed Martin Sippican, Inc.

Awarding Agency: Department of Defense

Start Date: 2009-01-29

End Date: 2012-01-29

Contract Duration: 1,095 days

Daily Burn Rate: $33.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: CSD SYSTEM DEVELOPMENT, DEMONSTRATION AND PRODUCTION

Place of Performance

Location: MARION, PLYMOUTH County, MASSACHUSETTS, 02738

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $36.6 million to LOCKHEED MARTIN SIPPICAN, INC. for work described as: CSD SYSTEM DEVELOPMENT, DEMONSTRATION AND PRODUCTION Key points: 1. Contract awarded for system development, demonstration, and production of navigation instruments. 2. The contract was competed fully and openly, suggesting a competitive bidding process. 3. The contract type is Cost Plus Incentive Fee (CPIF), which can incentivize cost control. 4. The duration of the contract was 1095 days, spanning three years. 5. The primary contractor, Lockheed Martin Sippican, Inc., is a significant player in defense contracting. 6. The North American Industry Classification System (NAICS) code points to instrument manufacturing. 7. The contract falls under the Department of Defense's procurement activities.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable contract data. The Cost Plus Incentive Fee structure aims to balance contractor incentives with cost control, but actual value depends heavily on how effectively costs were managed and incentives were structured. The raw dollar amount of $36.6 million over three years suggests a moderate investment for system development and production in the defense sector.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The number of bidders is not specified, but this method generally promotes price discovery and allows the government to select the best value offer. The competitive nature suggests that the pricing was likely scrutinized against multiple proposals.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the most competitive pricing and best overall value by allowing a wide range of potential contractors to participate.

Public Impact

The primary beneficiaries are the Department of Defense, which receives advanced navigation systems. The contract supports the development, demonstration, and production of critical navigation instruments. The geographic impact is primarily within the United States, where the contractor is based and likely where the systems will be deployed or supported. The contract supports a segment of the defense manufacturing workforce involved in specialized instrument production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Incentive Fee contracts can sometimes lead to cost overruns if not managed tightly.
Lack of specific performance metrics makes it difficult to assess the full value for money.
The duration of the contract (3 years) is substantial, requiring ongoing oversight.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
The contractor is a well-established entity in the defense industry.
The contract type (CPIF) includes incentives for cost efficiency.

Sector Analysis

This contract falls within the Defense sector, specifically the manufacturing of specialized navigation, guidance, and control instruments. The market for such systems is characterized by high technological barriers to entry, significant R&D investment, and a concentrated base of specialized contractors. Spending in this sub-sector is driven by military modernization programs and the need for advanced sensing and navigation capabilities. Comparable spending benchmarks would typically be found within other DoD contracts for similar complex electronic and mechanical systems.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. Given the nature of advanced system development and production, it is possible that subcontracting opportunities may exist for specialized components or services, but this is not explicitly detailed. The primary awardee is a large defense contractor, suggesting that direct small business participation as the prime contractor was unlikely.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance, compliance with contract terms, and proper cost accounting. The Cost Plus Incentive Fee structure necessitates close monitoring of costs and performance against established targets. Transparency is generally maintained through contract reporting mechanisms, though specific details of cost breakdowns and performance reviews are often considered sensitive.

Related Government Programs

Defense Navigation Systems Procurement
Military Instrument Manufacturing
DoD C4ISR Systems
Aerospace and Defense Electronics

Risk Flags

Cost Plus Incentive Fee contract type requires careful monitoring to ensure cost control.
System development contracts inherently carry technical and schedule risks.
Performance data beyond raw dollar amounts is needed for a comprehensive value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.6 million to LOCKHEED MARTIN SIPPICAN, INC.. CSD SYSTEM DEVELOPMENT, DEMONSTRATION AND PRODUCTION

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN SIPPICAN, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $36.6 million.

What is the period of performance?

Start: 2009-01-29. End: 2012-01-29.

What was the specific performance history of Lockheed Martin Sippican, Inc. on similar navigation system development contracts prior to this award?

Assessing Lockheed Martin Sippican, Inc.'s performance history on similar contracts prior to this award would require a deep dive into historical contract databases and performance reviews. Generally, as a major defense contractor, the company has a long track record with the Department of Defense across various platforms and systems. For navigation system development, key indicators of past performance would include on-time delivery, adherence to technical specifications, cost control within awarded contracts, and any documented instances of contract disputes or awards for exceptional performance. Without specific data points for comparable navigation system contracts, it's difficult to provide a precise assessment, but their established presence suggests a baseline of experience and capability, albeit with the inherent risks associated with large-scale defense development projects.

How did the final costs of this contract compare to the initial estimates, given its Cost Plus Incentive Fee (CPIF) structure?

The provided data does not include information on the final costs compared to initial estimates for this specific contract. A Cost Plus Incentive Fee (CPIF) contract is designed with a target cost and a target profit, along with a sharing formula for costs that deviate from the target. If the contractor achieves lower costs, both the contractor and the government share in the savings. Conversely, if costs exceed the target, both share in the overruns, up to a ceiling. To determine how final costs compared to estimates, one would need access to post-award financial reports and performance reviews specific to this contract. The effectiveness of the CPIF structure in controlling costs is contingent on the realism of the initial target cost and the alignment of the incentive clauses with desired outcomes.

What were the primary risks identified during the solicitation and award process for this contract, and how were they mitigated?

The primary risks associated with a contract for system development, demonstration, and production, especially in the defense sector, typically include technical risks (e.g., achieving desired performance specifications), schedule risks (e.g., delays in development or production), and cost risks (e.g., exceeding budget). For this specific contract, awarded under full and open competition, the solicitation process would have outlined requirements and evaluation criteria designed to assess potential offerors' ability to manage these risks. Mitigation strategies would likely have been embedded in the contract terms, such as the CPIF structure itself, performance milestones, and potentially specific clauses addressing intellectual property, cybersecurity, and supply chain management. Post-award, the Defense Contract Management Agency (DCMA) would oversee risk mitigation efforts through regular reporting and oversight.

What is the overall effectiveness of the CSD SYSTEM DEVELOPMENT, DEMONSTRATION AND PRODUCTION program in meeting the Department of Defense's navigation needs?

Assessing the overall effectiveness of the CSD SYSTEM DEVELOPMENT, DEMONSTRATION AND PRODUCTION program requires evaluating the delivered systems against the Department of Defense's operational requirements and strategic objectives for navigation. Key metrics for effectiveness would include the reliability, accuracy, and maintainability of the developed navigation instruments, as well as their integration into existing military platforms and their contribution to mission success. Without specific performance data, user feedback, or post-deployment assessments, it is challenging to definitively state the program's effectiveness. However, the fact that the contract was awarded and executed suggests a perceived need and an attempt to fulfill it through technological advancement in navigation systems.

How has the Department of Defense's spending on navigation system development and manufacturing evolved over the past decade, and where does this contract fit in?

The Department of Defense's spending on navigation system development and manufacturing has likely seen fluctuations over the past decade, influenced by evolving military technologies, geopolitical priorities, and budget cycles. Generally, there is a continuous need for advanced and reliable navigation systems across all branches of the military, from aircraft and ships to ground vehicles and individual soldiers. This $36.6 million contract, awarded in 2009 for a three-year period, represents a specific investment in the development and production of particular navigation instruments. It fits within the broader category of defense procurement for C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) systems, which often include sophisticated navigation and guidance components. Analyzing trends would require examining aggregate spending data for relevant NAICS codes and contract types over time.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0003908R0007

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 7 BARNABAS RD, MARION, MA, 02738

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $180,715,338

Exercised Options: $38,540,316

Current Obligation: $36,601,768

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline