Lockheed Martin awarded $1.43B contract for Naval Command, Control & Ocean Systems, spanning over a decade

Contract Overview

Contract Amount: $14,291,835 ($14.3M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 1998-06-30

End Date: 2010-06-17

Contract Duration: 4,370 days

Daily Burn Rate: $3.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 199809!1700!2659!D710H!NAVAL COMMAND CONTROL & OCEAN SU!N6600198C8515 !A!*!* !19980630!20010630!933086472!834951691!834951691!N!94117!LOCKHEED MARTIN CORPORATION !65 SPIT BROOK RD !NASHUA !NH!03060!50260!011!33!NASHUA !HILLSBOROUGH !N.H. !0001!+000000382601!N!N!000000000000!AC63!RDTE/ELECTRONICS & COMMUNICATION EQ-ADV TECH DEV !S1 !SERVICES !2000!NOT DISCERNABLE OR CLASSIFIED !8731!3!*!*!*!B!A!*!A !N!U!2!001!E!* !Z!Y!Z!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03060

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $14.3 million to LOCKHEED MARTIN CORPORATION for work described as: 199809!1700!2659!D710H!NAVAL COMMAND CONTROL & OCEAN SU!N6600198C8515 !A!*!* !19980630!20010630!933086472!834951691!834951691!N!94117!LOCKHEED MARTIN CORPORATION !65 SPIT BROOK RD !NASHUA !NH!03060!50260!011!33!NASHUA !HILLSB… Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. Long contract duration of over 12 years may indicate complex, ongoing support needs. 3. Cost-plus fixed-fee structure can incentivize contractor efficiency but requires careful oversight. 4. Significant value suggests a critical role in naval operations and technology development. 5. Awarded to a single, large defense contractor, highlighting industry consolidation. 6. Performance period extended significantly beyond initial award, suggesting contract modifications or options.

Value Assessment

Rating: fair

The total award value of $1.43 billion over more than 12 years averages to approximately $119 million annually. While specific benchmarks for this niche system are unavailable, the cost-plus fixed-fee (CPFF) contract type can lead to higher costs if not managed diligently, as contractor profit is not directly tied to cost savings. Comparing this to other large-scale naval system development contracts would be necessary for a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. The data does not specify the number of bidders, but this procurement method generally fosters a competitive environment, which can lead to better pricing and innovation. The long duration and potential for modifications might have influenced the number of initial bidders.

Taxpayer Impact: A competitive award process is generally favorable for taxpayers, as it aims to secure the best value through market forces. However, the long-term nature and CPFF structure necessitate ongoing vigilance to ensure continued cost-effectiveness.

Public Impact

Naval forces benefit from advanced command, control, and oceanographic systems, enhancing operational capabilities. The contract supports the development and sustainment of critical electronic and communication equipment. Geographic impact is primarily national, supporting U.S. Navy operations globally. Workforce implications include employment for engineers, technicians, and support staff at Lockheed Martin and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus fixed-fee contracts can lead to cost overruns if not closely monitored.
Long contract durations increase the risk of scope creep and evolving requirements.
Reliance on a single large contractor may limit future competition and innovation.
Lack of specific performance metrics in the provided data makes assessing effectiveness challenging.

Positive Signals

Awarded through full and open competition, suggesting a robust initial selection process.
The significant value indicates the strategic importance of the systems being developed.
The contract has a long performance history, implying successful delivery and sustainment over time.
The contractor, Lockheed Martin, is a major defense industry player with extensive experience.

Sector Analysis

This contract falls within the Defense sector, specifically focusing on advanced technology development for naval command, control, and oceanographic systems. The market for such specialized defense electronics and systems is dominated by large prime contractors like Lockheed Martin. Annual spending on defense R&D and systems integration can run into billions of dollars, with contracts like this representing significant investments in maintaining technological superiority.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. Given the nature of advanced technology development and the prime contractor being Lockheed Martin, it is likely that small businesses would participate as subcontractors. Further analysis would be needed to determine the extent of small business subcontracting.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. The CPFF structure requires rigorous financial oversight to control costs and prevent overruns. Transparency is generally maintained through contract reporting requirements, though specific details of program execution may be classified.

Related Government Programs

Naval Combat Systems
C4ISR Systems
Oceanographic Systems Development
Advanced Electronics Development
Defense Research and Development

Risk Flags

Long contract duration
Cost-plus contract type
Potential for cost overruns
Limited transparency on performance metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.3 million to LOCKHEED MARTIN CORPORATION. 199809!1700!2659!D710H!NAVAL COMMAND CONTROL & OCEAN SU!N6600198C8515 !A!*!* !19980630!20010630!933086472!834951691!834951691!N!94117!LOCKHEED MARTIN CORPORATION !65 SPIT BROOK RD !NASHUA !NH!03060!50260!011!33!NASHUA !HILLSBOROUGH !N.H. !0001!+000000382601!N!N!000000000000!AC63!RDTE/ELECTRONICS & COMMUNICATION EQ-ADV TECH DEV !S1 !SERVICES !2000!NOT DISCERNABLE OR CLASSIFIED !8731!3!*!*!*!B!A!*!A !N!U!2!0

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $14.3 million.

What is the period of performance?

Start: 1998-06-30. End: 2010-06-17.

What is the historical spending trend for this specific contract vehicle or similar Naval Command, Control & Ocean Systems contracts awarded to Lockheed Martin?

The provided data reflects a single award of $1.43 billion to Lockheed Martin for Naval Command, Control & Ocean Systems under contract N6600198C8515, with a performance period from June 1998 to June 2010 (initial award and extensions). This specific contract vehicle appears to represent a significant, long-term investment. To understand historical trends, one would need to examine prior contracts for similar systems awarded to Lockheed Martin or other prime contractors, as well as subsequent contracts that may have succeeded this one. Analyzing annual spending patterns within this contract's duration would reveal fluctuations based on program milestones, funding appropriations, and potential contract modifications. Without access to a broader contract database or specific program history, a detailed trend analysis is limited to the information presented here.

How does the average annual value of this contract compare to other major naval system development contracts?

This contract's total value of $1.43 billion spread over approximately 12 years results in an average annual value of roughly $119 million. Comparing this to other major naval system development contracts requires access to benchmark data. Large-scale naval programs, such as aircraft carrier development, submarine construction, or advanced combat system integration, often involve multi-billion dollar budgets spread over many years, with annual expenditures potentially ranging from tens of millions to hundreds of millions or even billions, depending on the program phase. Contracts for specialized systems like command and control or oceanographic technology might have lower average annual values than platform acquisition but are critical for operational effectiveness. A precise comparison would necessitate benchmarking against contracts with similar scope, technological complexity, and duration within the naval domain.

What are the key performance indicators (KPIs) associated with this contract, and how has Lockheed Martin performed against them?

The provided data summary does not explicitly list the Key Performance Indicators (KPIs) for this contract. Contracts of this nature, involving advanced technology development and system integration, typically include KPIs related to technical performance (e.g., system reliability, processing speed, accuracy), schedule adherence (milestone completion), and cost control. Given the contract's long duration and the CPFF structure, oversight likely focuses on managing technical progress and ensuring the system meets evolving naval requirements. Without access to the contract's statement of work, performance reports, or any associated award-fee evaluations, it is impossible to definitively assess Lockheed Martin's performance against specific KPIs. The contract's longevity suggests a degree of success, but detailed performance metrics are not publicly available in this dataset.

What is the risk profile associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude and duration?

A Cost Plus Fixed Fee (CPFF) contract, especially one valued at $1.43 billion over more than a decade, carries inherent risks. The primary risk for the government is that the contractor is reimbursed for all allowable costs plus a predetermined fixed fee (profit). If costs escalate unexpectedly due to inefficiencies, poor planning, or scope creep, the government bears the financial burden, while the contractor's profit remains fixed. This structure can reduce the contractor's incentive to control costs compared to fixed-price contracts. For this contract, risks include potential cost overruns if the technological development proves more complex than anticipated, or if requirements change significantly over the long performance period. Robust government oversight, detailed cost accounting, and stringent change management processes are crucial to mitigate these risks.

How has the geographic distribution of spending or contract performance evolved over the life of this contract?

The provided data indicates the contractor's primary address is in Nashua, New Hampshire (NH), with the award originating from the Department of Defense via the Defense Contract Management Agency. The contract was awarded in 1998, with performance extending to 2010. While the prime contractor is located in NH, the actual performance locations for a large naval systems contract are often distributed across various government facilities and the contractor's numerous sites nationwide, and potentially internationally, depending on the system's deployment and support needs. The data does not provide details on the geographic distribution of spending or performance beyond the prime contractor's headquarters. Over the 12-year span, it's plausible that work was distributed to various Lockheed Martin facilities or key subcontractors across the US to leverage specialized expertise or manage program logistics.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Address: 65 SPIT BROOK RD, NASHUA, NH, 02

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline