DoD awards $10.4M for long lead time materials for AN/AAQ-30 targeting system to Lockheed Martin

Contract Overview

Contract Amount: $10,449,448 ($10.4M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2007-04-12

End Date: 2010-07-09

Contract Duration: 1,184 days

Daily Burn Rate: $8.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LONG LEAD MATERIAL TO SUPPPORT AN/AAQ-30

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32819

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $10.4 million to LOCKHEED MARTIN CORPORATION for work described as: LONG LEAD MATERIAL TO SUPPPORT AN/AAQ-30 Key points: 1. Contract awarded for critical long lead time materials, indicating a need for specialized components. 2. Sole-source award to Lockheed Martin suggests a lack of readily available alternatives or specific expertise. 3. The contract duration of 1184 days points to a complex and lengthy production or development cycle. 4. Fixed-price contract type aims to control costs, but potential for overruns exists with long lead times. 5. Awarded by the Department of the Navy, this supports advanced defense capabilities. 6. The specific NAICS code (334511) relates to instrument manufacturing, highlighting the technical nature of the materials.

Value Assessment

Rating: fair

This contract for long lead time materials was awarded on a sole-source basis, making direct value-for-money comparisons difficult. The fixed-price nature provides some cost certainty, but the absence of competition limits the ability to benchmark pricing against market alternatives. Without more detailed cost breakdowns or comparable sole-source awards for similar long lead items, assessing the overall value is challenging. The significant duration suggests a substantial investment in specialized components.

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 a specific contractor possesses unique capabilities, intellectual property, or when there is an urgent need that cannot be met through a competitive process. The lack of competition means that pricing was not subject to market forces, potentially leading to higher costs for the government compared to a competed award.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible price through competitive bidding, potentially resulting in less favorable terms for taxpayers.

Public Impact

The primary beneficiaries are the Department of Defense and specifically the Department of the Navy, which will receive critical components for the AN/AAQ-30 targeting system. The services delivered involve the procurement of long lead time materials essential for the production or sustainment of advanced defense equipment. The geographic impact is primarily within Florida, where the contractor is located, potentially supporting local jobs and the defense industrial base in that state. Workforce implications may include specialized manufacturing and engineering roles at Lockheed Martin and its subcontractors involved in producing these critical materials.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price negotiation and potential for cost savings.
Long lead time materials can be subject to supply chain disruptions and price volatility.
Lack of competition may reduce incentives for the contractor to innovate or improve efficiency.
Fixed-price contracts can still incur cost overruns if initial estimates are inaccurate or unforeseen issues arise.

Positive Signals

Award to a major defense contractor like Lockheed Martin suggests access to established expertise and production capabilities.
Focus on long lead time materials indicates proactive planning to ensure availability of critical components for defense systems.
Fixed-price contract type provides a degree of cost predictability for the awarded amount.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically supporting the manufacturing of advanced navigation and guidance systems. The market for such specialized components is often dominated by a few large prime contractors due to high barriers to entry, including significant R&D investment, specialized manufacturing capabilities, and stringent security requirements. Comparable spending benchmarks are difficult to establish without more specific details on the materials, but defense procurement for targeting systems represents a substantial portion of the overall defense budget.

Small Business Impact

This contract does not appear to involve a small business set-aside, as it was awarded to Lockheed Martin Corporation, a large prime contractor. There is no explicit information regarding subcontracting plans for small businesses within this award notice. The focus on specialized, long lead time materials may limit opportunities for small businesses unless they are direct suppliers of niche components or services to Lockheed Martin.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy's contracting and program management offices. Accountability measures are embedded in the contract terms, including the fixed-price structure and delivery schedules. Transparency is limited due to the sole-source nature and the proprietary details of long lead time materials. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

AN/AAQ-30 Targeting System
Department of the Navy Procurement
Defense Advanced Targeting Technology
Lockheed Martin Defense Contracts
Long Lead Time Material Procurement

Risk Flags

Sole-source award
Long lead time materials
Potential for cost overruns despite fixed price

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.4 million to LOCKHEED MARTIN CORPORATION. LONG LEAD MATERIAL TO SUPPPORT AN/AAQ-30

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 $10.4 million.

What is the period of performance?

Start: 2007-04-12. End: 2010-07-09.

What is the specific nature of the 'long lead material' being procured for the AN/AAQ-30 system?

The specific nature of the 'long lead material' for the AN/AAQ-30 system is not detailed in the provided award notice. However, 'long lead time materials' typically refer to components or raw materials that require a significant amount of time to manufacture or procure, often due to complex production processes, specialized tooling, or limited supplier availability. For a targeting system like the AN/AAQ-30, these could include specialized optical elements, high-precision sensors, advanced processors, or unique structural components that cannot be quickly sourced or fabricated. The necessity of procuring these items well in advance is crucial to avoid delays in the overall production or sustainment schedule of the targeting system.

Why was this contract awarded on a sole-source basis to Lockheed Martin Corporation?

The award notice indicates a sole-source justification, which typically means that only one responsible source was found to be capable of providing the required goods or services. For advanced defense systems like the AN/AAQ-30, this could be due to Lockheed Martin's proprietary technology, unique manufacturing capabilities, existing intellectual property rights, or specialized expertise directly related to the system's development and production. The Department of the Navy likely determined that a competitive procurement would not be feasible or in the government's best interest, possibly due to the highly specialized nature of the long lead time materials or the need for seamless integration with existing systems already produced by Lockheed Martin.

How does the fixed-price contract type mitigate risks associated with long lead time materials?

A Firm Fixed Price (FFP) contract type aims to mitigate risks by establishing a ceiling price for the goods or services. For long lead time materials, this means the government agrees to pay a set amount, transferring most of the cost risk to the contractor. This encourages the contractor to manage their costs efficiently and accurately estimate the expenses involved in procuring or manufacturing these specialized components. While FFP provides cost certainty for the government, it's important to note that if the contractor's costs exceed the fixed price, they absorb the loss. Conversely, if costs are lower, they retain the profit. This structure incentivizes the contractor to control expenditures throughout the procurement process.

What is the significance of the contract duration (1184 days)?

The contract duration of 1184 days (approximately 3.25 years) is significant as it directly reflects the extended timeline required for the production or procurement of the specified long lead time materials. This lengthy period suggests that the materials are not off-the-shelf items but rather require complex manufacturing processes, specialized sourcing, or extensive testing. Such durations are common in the defense industry for critical components of advanced systems, indicating a need for substantial planning and resource allocation by both the contractor and the procuring agency to ensure timely delivery and integration into the final AN/AAQ-30 system.

What is the historical spending pattern for the AN/AAQ-30 targeting system or similar systems?

The provided data only includes a single award for long lead time materials for the AN/AAQ-30 system. To understand historical spending patterns, one would need access to broader contract databases and procurement histories for this specific system and potentially comparable targeting systems across the Department of Defense. Analyzing past awards, including their values, durations, competition levels, and contract types, would reveal trends in investment, identify key contractors, and provide context for the current $10.4 million award. Without this broader historical data, it is difficult to assess if this award represents a typical investment or a deviation from past spending.

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: FIRE CONTROL EQPT.

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0016407R8525

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 5600 W SAND LAKE RD MP125, ORLANDO, FL, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $10,449,448

Exercised Options: $10,449,448

Current Obligation: $10,449,448

Contract Characteristics

Cost or Pricing Data: NO

Timeline