DoD's $221M Infrared System Procurement for F/A-18s Awarded Sole-Source to Lockheed Martin

Contract Overview

Contract Amount: $22,108,207 ($22.1M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2019-09-20

End Date: 2025-09-30

Contract Duration: 2,202 days

Daily Burn Rate: $10.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: INFRARED SEARCH AND TRACKING SYSTEM (IRST) PROCUREMENT OF CONTROL PROCESSORS AND INFRARED RECEIVERS FOR THE F/A-18 AIRCRAFT

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32819

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $22.1 million to LOCKHEED MARTIN CORPORATION for work described as: INFRARED SEARCH AND TRACKING SYSTEM (IRST) PROCUREMENT OF CONTROL PROCESSORS AND INFRARED RECEIVERS FOR THE F/A-18 AIRCRAFT Key points: 1. Significant sole-source award to a single contractor raises questions about competitive pricing and value. 2. Long contract duration (2019-2025) suggests a sustained need for these specialized aircraft components. 3. Focus on infrared search and tracking systems highlights critical defense capabilities. 4. Lack of competition may limit opportunities for innovation and cost reduction from alternative suppliers. 5. Geographic concentration in Florida for delivery orders warrants attention for supply chain resilience. 6. The contract's value represents a substantial investment in maintaining and upgrading the F/A-18 fleet.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source contract is challenging without competitive bids. The $221 million total award for control processors and infrared receivers for F/A-18 aircraft suggests a high unit cost, typical for specialized defense components. However, the absence of competition prevents a direct comparison to market rates or alternative solutions, making it difficult to definitively assess value for money. Further analysis would require understanding the specific technological requirements and the contractor's cost structure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Lockheed Martin Corporation, was considered. The justification for sole-sourcing is not provided in the data, but it typically arises when only one responsible source can fulfill the requirement due to unique capabilities, proprietary technology, or urgent needs. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices or spurred innovation from multiple vendors.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without competing offers, there is a reduced incentive for the contractor to offer the lowest possible price, potentially leading to higher overall expenditure for this critical defense system.

Public Impact

The primary beneficiaries are the U.S. Navy and Marine Corps, who will receive upgraded or replacement infrared search and tracking systems for their F/A-18 fighter jets. The contract delivers essential components for maintaining the operational readiness and advanced threat detection capabilities of the F/A-18 aircraft fleet. The contract's performance is geographically linked to Florida, indicated by the 'FL' state code, suggesting potential impacts on local industry and workforce within that region. This procurement supports specialized manufacturing roles within the aerospace and defense sector, potentially sustaining high-skilled jobs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential for cost savings.
Lack of transparency regarding the justification for sole-sourcing.
Long contract duration could mask potential cost overruns or inefficiencies if not closely monitored.
Dependence on a single supplier for critical aircraft components poses a supply chain risk.

Positive Signals

Procurement of advanced infrared systems enhances critical defense capabilities.
Contract supports the sustainment and modernization of a key fighter aircraft platform (F/A-18).
Firm Fixed Price contract type provides cost certainty for the government, assuming scope is well-defined.

Sector Analysis

The aerospace manufacturing sector, specifically focusing on aircraft parts and auxiliary equipment, is characterized by high technological barriers to entry and significant R&D investment. This contract falls under NAICS code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing.' The market is often dominated by large defense contractors like Lockheed Martin due to the specialized nature of military hardware. Spending in this sector is heavily influenced by defense budgets and strategic priorities, with contracts often being long-term and high-value due to the complexity and criticality of the systems involved.

Small Business Impact

This contract does not appear to involve small business set-asides, as indicated by 'sb': false. The sole-source nature of the award to a large prime contractor like Lockheed Martin suggests limited direct opportunities for small businesses to participate as prime contractors. Subcontracting opportunities may exist, but their extent and nature would depend on Lockheed Martin's sourcing strategy and the specific components required. The overall impact on the small business ecosystem for this particular contract is likely minimal.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management structures, specifically within the Department of the Navy. As a sole-source award, scrutiny might be higher regarding the justification and pricing. Transparency could be enhanced through regular reporting requirements and potential reviews by the Government Accountability Office (GAO) if protests or specific concerns arise. Inspector General involvement would depend on allegations of fraud, waste, or abuse.

Related Government Programs

F/A-18 Aircraft Modernization Programs
Advanced Avionics Systems Procurement
Defense Infrared Countermeasures
Naval Aviation Component Manufacturing
Sole-Source Defense Contracts

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for non-competitive pricing
Long contract duration
Dependence on a single supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.1 million to LOCKHEED MARTIN CORPORATION. INFRARED SEARCH AND TRACKING SYSTEM (IRST) PROCUREMENT OF CONTROL PROCESSORS AND INFRARED RECEIVERS FOR THE F/A-18 AIRCRAFT

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 $22.1 million.

What is the period of performance?

Start: 2019-09-20. End: 2025-09-30.

What is the specific justification provided by the Department of the Navy for awarding this contract on a sole-source basis to Lockheed Martin?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source procurements are justified under specific circumstances outlined in the Federal Acquisition Regulation (FAR), such as when only one responsible source is available, or in cases of urgent and compelling need. For advanced defense systems like infrared search and tracking, justifications often cite proprietary technology, unique manufacturing capabilities, or the need for compatibility with existing platforms where only the original equipment manufacturer can provide the required components. Without the official justification document, it's impossible to confirm the exact reasoning, but it likely relates to Lockheed Martin's unique position as the developer or primary supplier of these specific F/A-18 components.

How does the total contract value of $221 million compare to historical spending on similar infrared systems for the F/A-18 or comparable aircraft?

Comparing the $221 million total contract value requires access to historical spending data for F/A-18 infrared systems or similar platforms. Such data is often found in government spending databases or defense budget reports. Factors influencing historical spending include the number of aircraft being upgraded, the specific technological generation of the infrared systems, the contract type (e.g., fixed-price vs. cost-plus), and the competitive landscape at the time of award. Given this is a sole-source award for specialized components, direct comparisons might be difficult. However, analyzing trends in defense procurement for avionics and sensor systems over the past decade could provide context on whether this value falls within expected ranges for such critical, long-lifecycle defense equipment.

What are the key performance metrics and delivery schedules associated with this contract, and how are they being monitored?

The provided data indicates a contract start date of September 20, 2019, and an end date of September 30, 2025, with a duration of 2202 days (approximately 6 years). This suggests a phased delivery schedule over an extended period. Key performance metrics would typically include adherence to technical specifications for the control processors and infrared receivers, on-time delivery of components, and potentially reliability or performance standards in operational environments. Monitoring would be conducted by the Department of the Navy's contracting officers and technical representatives through regular progress reports, inspections, and potentially testing of delivered components. Specific metrics and monitoring protocols are usually detailed in the contract's statement of work and performance clauses.

What is Lockheed Martin's track record with the Department of Defense regarding sole-source contracts for aircraft components, particularly for the F/A-18 program?

Lockheed Martin Corporation is a major defense contractor with extensive experience supplying components and systems for various military aircraft, including the F/A-18. They have a significant history of receiving both competed and sole-source contracts from the Department of Defense. Analyzing their past performance on sole-source awards for similar complex systems would involve reviewing contract databases for prior awards, examining any associated Government Accountability Office (GAO) bid protest decisions, and assessing performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS) if publicly available. Their established role as a prime contractor for numerous defense platforms suggests a capacity to fulfill such requirements, though the rationale and pricing of sole-source awards remain key areas for scrutiny.

Are there any identified risks associated with this contract, such as potential cost overruns, schedule delays, or technical obsolescence, given its long duration and sole-source nature?

Yes, several risks are associated with this contract. The sole-source nature increases the risk of non-competitive pricing and potentially less incentive for cost control by the contractor. The long duration (over 6 years) raises the risk of schedule delays due to unforeseen production issues, supply chain disruptions, or changes in program requirements. Furthermore, technology in the defense sector evolves rapidly; there's a risk of technical obsolescence, where the delivered components might become outdated before the end of their intended service life, although infrared technology tends to have longer sustainment cycles. Cost overruns are also a risk, especially if the initial cost estimates did not fully account for all potential challenges in manufacturing specialized components over an extended period. Robust government oversight is crucial to mitigate these risks.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0038319R1715

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1801 STATE RT 17 C, OWEGO, NY, 13827

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: $22,108,207

Exercised Options: $22,108,207

Current Obligation: $22,108,207

Actual Outlays: $1,315,658

Subaward Activity

Number of Subawards: 122

Total Subaward Amount: $72,618,714

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: N0001919G0029

IDV Type: BOA

Timeline