DoD's $73.4M Lockheed Martin Contract for Navigation Systems Lacks Competition, Raises Oversight Concerns
Contract Overview
Contract Amount: $73,421,313 ($73.4M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2023-03-30
End Date: 2028-03-29
Contract Duration: 1,826 days
Daily Burn Rate: $40.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: ICP BUILD 22.21.X T-22, T-23, T-99
Place of Performance
Location: MANASSAS, PRINCE WILLIAM County, VIRGINIA, 20110
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $73.4 million to LOCKHEED MARTIN CORPORATION for work described as: ICP BUILD 22.21.X T-22, T-23, T-99 Key points: 1. Significant contract value of $73.4 million awarded to a single vendor. 2. Sole-source award to Lockheed Martin suggests limited market competition. 3. Potential for inflated costs due to lack of competitive bidding. 4. Focus on critical navigation systems highlights national security implications.
Value Assessment
Rating: questionable
The contract's cost-plus-fixed-fee structure, combined with a sole-source award, makes it difficult to assess value for money. Without competitive bids, it's hard to benchmark pricing against similar systems.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Lockheed Martin. This limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The lack of competition may result in taxpayers paying more than necessary for these essential navigation systems.
Public Impact
Taxpayers may be overpaying for critical defense navigation technology. Reliance on a single vendor could create supply chain vulnerabilities. The Department of Defense's procurement process for this item warrants scrutiny.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Cost-plus contract type
- Potential for cost overruns
Positive Signals
- Awarded to a major defense contractor
- Long-term contract duration
Sector Analysis
This contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector. Spending in this area is critical for national defense, but competitive procurement is essential to ensure efficiency.
Small Business Impact
The contract was awarded to Lockheed Martin Corporation, a large business. There is no indication of small business participation in this specific award, which is common for sole-source, high-value defense contracts.
Oversight & Accountability
The sole-source nature of this award raises questions about the effectiveness of oversight in ensuring competitive pricing and value. Further review of the justification for not competing the contract is recommended.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition
- Sole-source award justification unclear
- Potential for cost overruns
- Limited market visibility
- No small business participation noted
Tags
search-detection-navigation-guidance-aer, department-of-defense, va, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $73.4 million to LOCKHEED MARTIN CORPORATION. ICP BUILD 22.21.X T-22, T-23, T-99
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $73.4 million.
What is the period of performance?
Start: 2023-03-30. End: 2028-03-29.
What was the justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?
The provided data indicates the contract was 'NOT COMPETED'. A sole-source award typically requires a justification, such as the existence of only one responsible source or a compelling urgency. Without this justification, it's difficult to assess if the government adequately explored competitive options or if this decision was truly necessary, potentially impacting overall value.
How does the cost-plus-fixed-fee structure impact the risk of cost overruns for this navigation system contract?
Cost-plus-fixed-fee contracts share cost risk between the government and the contractor. While the contractor has an incentive to control costs to maximize their fixed fee, the government bears the risk of cost overruns if initial estimates are inaccurate or if unforeseen issues arise. This structure, especially without competition, can lead to higher overall costs.
What is the potential impact on technological advancement and innovation given the sole-source nature of this contract?
Sole-source contracts can stifle innovation by removing the competitive pressure that often drives contractors to develop more advanced or cost-effective solutions. When a single vendor is guaranteed the work, there may be less incentive to invest in research and development beyond meeting the minimum contract requirements, potentially leading to technological stagnation.
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: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0003921R9000
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp
Address: 9500 GODWIN DR, MANASSAS, VA, 20110
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $287,192,622
Exercised Options: $114,095,518
Current Obligation: $73,421,313
Subaward Activity
Number of Subawards: 148
Total Subaward Amount: $33,693,561
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2023-03-30
Current End Date: 2028-03-29
Potential End Date: 2028-03-29 00:00:00
Last Modified: 2025-12-12
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