DoD awards $61.8M for antenna radome assemblies, with limited competition raising cost concerns

Contract Overview

Contract Amount: $61,758,817 ($61.8M)

Contractor: Lockheed Martin Sippican, Inc.

Awarding Agency: Department of Defense

Start Date: 2020-09-29

End Date: 2028-12-31

Contract Duration: 3,015 days

Daily Burn Rate: $20.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: OE-538B ANTENNA RADOME ASSEMBLY AND UPGRADE KITS

Place of Performance

Location: LIVERPOOL, ONONDAGA County, NEW YORK, 13088

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $61.8 million to LOCKHEED MARTIN SIPPICAN, INC. for work described as: OE-538B ANTENNA RADOME ASSEMBLY AND UPGRADE KITS Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The contract's duration of over 8 years suggests a long-term need for these specialized components. 3. The fixed-price nature of the contract shifts some risk to the contractor. 4. The awardee, Lockheed Martin Sippican, Inc., is a significant player in defense manufacturing. 5. The contract falls under the Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing NAICS code. 6. The geographic location of the contractor is New York.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and specialized components. Without competitive bids, it's difficult to ascertain if the $61.8 million represents a fair market price. The long duration (over 8 years) also makes it hard to compare to similar, shorter-term contracts. However, the firm fixed-price structure provides some cost certainty for the government.

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 among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities or when urgency dictates. The lack of competition means there was no opportunity for price negotiation based on multiple offers, potentially leading to higher costs for the government.

Taxpayer Impact: The absence of competition means taxpayers did not benefit from potential cost savings that could have arisen from a competitive bidding process.

Public Impact

The Department of the Navy benefits from the acquisition of essential antenna radome assemblies and upgrade kits. These components are critical for the operational readiness and performance of naval communication and radar systems. The contract supports specialized manufacturing jobs within the defense industrial base, primarily in New York. The successful delivery of these parts ensures the continued functionality of vital military electronic systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential cost savings.
Long contract duration may obscure true market value without periodic re-evaluation.
Lack of transparency in the sole-source justification could hide inefficiencies.

Positive Signals

Firm fixed-price contract provides cost predictability.
Awardee is an established defense contractor with relevant expertise.
Contract supports critical defense systems.

Sector Analysis

This contract falls within the broader defense electronics sector, specifically focusing on specialized components for communication and radar systems. The market for such niche defense manufacturing is often characterized by high barriers to entry due to technical expertise and security clearances. Spending in this area is driven by military modernization and sustainment requirements. Comparable spending benchmarks are difficult to establish due to the specialized nature of radome assemblies.

Small Business Impact

The contract data indicates that small business participation was not a primary consideration, as the award was sole-source and the prime contractor is a large entity. There is no explicit mention of small business set-asides or subcontracting plans. This suggests that opportunities for small businesses within this specific contract may be limited, unless they are lower-tier suppliers to the prime.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified goods. Transparency is limited due to the sole-source nature, but contract modifications and performance reports would be subject to internal review and potentially Inspector General oversight if performance issues arise.

Related Government Programs

Naval Communication Systems
Defense Electronics Manufacturing
Radar Systems Components
Aerospace and Defense Contracting

Risk Flags

Sole-source award
Long contract duration
Lack of competitive benchmarking

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $61.8 million to LOCKHEED MARTIN SIPPICAN, INC.. OE-538B ANTENNA RADOME ASSEMBLY AND UPGRADE KITS

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 (Department of the Navy).

What is the total obligated amount?

The obligated amount is $61.8 million.

What is the period of performance?

Start: 2020-09-29. End: 2028-12-31.

What is the historical spending pattern for OE-538B ANTENNA RADOME ASSEMBLY AND UPGRADE KITS with Lockheed Martin Sippican, Inc. prior to this award?

The provided data focuses on a single definitive contract awarded in September 2020 with an end date in December 2028, totaling $61.8 million. Without access to historical contract databases or specific procurement records for this particular item (OE-538B), it is difficult to ascertain prior spending patterns with Lockheed Martin Sippican, Inc. for these specific assemblies and kits. Typically, such analysis would involve searching for previous contracts, task orders, or modifications related to this part number or its predecessors, and examining their award dates, values, and durations. The current contract's long duration suggests it might consolidate or replace previous arrangements, but definitive historical data is needed for a comprehensive trend analysis.

How does the per-unit cost of the OE-538B ANTENNA RADOME ASSEMBLY compare to similar components in the market?

Determining a precise per-unit cost for the OE-538B ANTENNA RADOME ASSEMBLY is not feasible with the provided data, as the total contract value ($61.8 million) and the number of units are not specified. Furthermore, the contract is sole-source, making direct market comparisons difficult. Radome assemblies are highly specialized components, often custom-engineered for specific military platforms, which significantly impacts their cost. Factors such as material science, manufacturing complexity, required performance specifications (e.g., radar transparency, environmental resistance), and certification requirements contribute to unit pricing. Without detailed specifications and competitive bidding data, any per-unit cost derived would be speculative and lack a reliable market benchmark.

What are the specific risks associated with a sole-source award for critical defense components like antenna radome assemblies?

Sole-source awards for critical defense components like antenna radome assemblies present several risks. Primarily, the lack of competition can lead to inflated prices, as the government does not benefit from the cost-saving pressures inherent in a competitive bidding process. This can result in taxpayers paying more than necessary. Secondly, it can foster complacency in the contractor, potentially reducing incentives for innovation or efficiency improvements over the contract's life. There's also a risk of vendor lock-in, making it difficult and costly to switch suppliers if issues arise or if better alternatives emerge. Finally, without competitive benchmarking, it's harder to objectively assess the contractor's performance and the value received.

What is the track record of Lockheed Martin Sippican, Inc. in delivering similar defense electronic components?

Lockheed Martin Sippican, Inc. has a significant track record within the defense industry, particularly in areas related to naval systems, sonar, and electronic components. As a subsidiary or division of Lockheed Martin, it benefits from the extensive resources and established supply chains of a major defense contractor. Their experience likely includes the design, development, and production of complex electronic systems and sub-assemblies for various military platforms. While specific details on the OE-538B program require deeper investigation, the company's general reputation and history suggest a capability to meet stringent military specifications. Performance history on past contracts, including on-time delivery, quality adherence, and cost management, would be crucial for a complete assessment.

How does the duration of this contract (over 8 years) impact the assessment of its value and potential for obsolescence?

The extended duration of this contract, spanning over eight years (September 2020 to December 2028), significantly impacts its value assessment and raises concerns about potential obsolescence. For value, a longer contract can offer stability and predictability for both the government and the contractor, potentially securing long-term supply. However, it also means the price is locked in for an extended period, which could become unfavorable if market prices decrease or if more cost-effective technologies emerge. Regarding obsolescence, technology in the defense electronics sector evolves rapidly. An eight-year lifecycle for components could mean that by the end of the contract, the technology is nearing or already outdated, potentially requiring costly upgrades or replacements sooner than anticipated. This necessitates careful planning and potentially incorporating clauses for technology refresh or review.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0003919R0023

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 497 ELECTRONICS PARKWAY, LIVERPOOL, NY, 13088

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

Financial Breakdown

Contract Ceiling: $75,772,732

Exercised Options: $61,767,143

Current Obligation: $61,758,817

Subaward Activity

Number of Subawards: 156

Total Subaward Amount: $51,190,833

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline