DoD Awards Lockheed Martin $164.6M for Ship Building and Repairing, Sole-Source Contract
Contract Overview
Contract Amount: $16,456,395 ($16.5M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2022-09-01
End Date: 2026-01-31
Contract Duration: 1,248 days
Daily Burn Rate: $13.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Official Description: ENGIINEERING AND MANAGEMENT EFFORTS
Place of Performance
Location: MOORESTOWN, BURLINGTON County, NEW JERSEY, 08057
Plain-Language Summary
Department of Defense obligated $16.5 million to LOCKHEED MARTIN CORPORATION for work described as: ENGIINEERING AND MANAGEMENT EFFORTS Key points: 1. Significant contract value of $164.6 million awarded to a single large defense contractor. 2. Sole-source award raises questions about competition and potential for price optimization. 3. Contract duration of over 3 years suggests a long-term need for these services. 4. Focus on ship building and repair indicates a critical area within naval operations.
Value Assessment
Rating: questionable
The contract type is Cost Plus Award Fee, which can lead to higher costs if not managed carefully. Without competitive bids, it's difficult to assess if the pricing is optimal compared to market rates for similar engineering and management efforts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and may result in higher costs for taxpayers as there was no competitive pressure to drive down the price.
Taxpayer Impact: The lack of competition on this $164.6 million contract means taxpayers may not be receiving the best possible value, as prices were not tested against the market.
Public Impact
Naval readiness and shipbuilding capabilities are directly impacted by this contract. Taxpayer funds are allocated to a significant defense contract, highlighting defense spending priorities. The long-term nature of the contract suggests ongoing investment in naval infrastructure. Dependence on a single contractor for critical services could pose a risk.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of transparency in pricing
- Potential for cost overruns
Positive Signals
- Addresses critical naval shipbuilding and repair needs
- Awarded to a known, experienced defense contractor
Sector Analysis
This contract falls within the Defense sector, specifically ship building and repairing. Defense spending benchmarks for such services can vary widely based on complexity and scope, but large sole-source contracts warrant scrutiny.
Small Business Impact
The contract was awarded to Lockheed Martin Corporation, a large prime contractor. There is no indication of subcontracting opportunities for small businesses within the provided data.
Oversight & Accountability
Oversight will be crucial for this Cost Plus Award Fee contract to ensure that costs are managed effectively and that the award fee structure incentivizes performance without excessive spending. The Department of the Navy is the contracting agency.
Related Government Programs
- Ship Building and Repairing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits competitive pricing.
- Cost-plus contract type can lead to cost overruns.
- Award fee structure requires careful monitoring for efficiency.
- Lack of small business participation noted.
- Long contract duration increases long-term cost exposure.
Tags
ship-building-and-repairing, department-of-defense, nj, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $16.5 million to LOCKHEED MARTIN CORPORATION. ENGIINEERING AND MANAGEMENT EFFORTS
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 $16.5 million.
What is the period of performance?
Start: 2022-09-01. End: 2026-01-31.
What specific engineering and management efforts are included in this contract, and how were they valued without competition?
The specific details of the engineering and management efforts are not fully elaborated in the provided data. However, the contract type (Cost Plus Award Fee) suggests that the government reimburses allowable costs plus an award fee based on performance. The valuation likely involved historical data, cost estimates, and negotiation, but the absence of competition makes independent verification of value challenging.
What are the primary risks associated with a sole-source, cost-plus award fee contract for ship building and repairing?
The primary risks include potential cost overruns due to the cost-plus nature, where the contractor is reimbursed for expenses incurred. The sole-source aspect removes competitive pressure, potentially leading to inflated prices. The award fee mechanism, if not tightly managed, could incentivize meeting minimum requirements rather than optimal performance, and could also lead to higher overall costs if the criteria are not stringent.
How effective is the Department of the Navy in overseeing sole-source, cost-plus contracts to ensure taxpayer value?
The effectiveness of the Department of the Navy in overseeing such contracts is variable and depends heavily on the specific program, the contracting officers' diligence, and the robustness of the oversight mechanisms in place. While agencies strive for effective oversight, the inherent nature of sole-source, cost-plus contracts presents ongoing challenges in ensuring maximum taxpayer value and preventing potential inefficiencies or cost escalations.
Industry Classification
NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing
Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Address: 2323 EASTERN BLVD, BALTIMORE, MD, 21220
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: $18,341,273
Exercised Options: $18,341,273
Current Obligation: $16,456,395
Subaward Activity
Number of Subawards: 28
Total Subaward Amount: $2,704,166
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0002419G2319
IDV Type: BOA
Timeline
Start Date: 2022-09-01
Current End Date: 2026-01-31
Potential End Date: 2026-01-31 00:00:00
Last Modified: 2025-12-18
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