Navy awards $247.8M contract for miscellaneous communication equipment, with a significant portion for firm-fixed-price orders

Contract Overview

Contract Amount: $24,786,482 ($24.8M)

Contractor: Lockheed Martin Sippican, Inc.

Awarding Agency: Department of Defense

Start Date: 2004-02-02

End Date: 2012-07-13

Contract Duration: 3,084 days

Daily Burn Rate: $8.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200405!040001!1700!BW24A !NAVAL UNDERSEA WARFARE CENTER, N!N6660404C0001 !A!N! !N! ! !20040202!20090201!032046666!032046666!032046666!N!SIPPICAN, INC !7 BARNABAS ROAD !MARION !MA!02738!38505!023!25!MARION !PLYMOUTH !MASS !+000002812169!N!N!000000000000!5895!MISCELLANEOUS COMMUNICATION EQUIPMENT !C9E!ALL OTHER SUPPLIES AND EQUIPMENT !000 !* !334220!E! !3! ! ! ! ! !99990909!B! ! !A! !A!N!J!2!001!B! !A!N!A! ! !N!C!N! ! ! !Z!Z!A!A!000!A!B!N! ! ! ! ! !N66604!0001! !

Place of Performance

Location: MARION, PLYMOUTH County, MASSACHUSETTS, 02738

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $24.8 million to LOCKHEED MARTIN SIPPICAN, INC. for work described as: 200405!040001!1700!BW24A !NAVAL UNDERSEA WARFARE CENTER, N!N6660404C0001 !A!N! !N! ! !20040202!20090201!032046666!032046666!032046666!N!SIPPICAN, INC !7 BARNABAS ROAD !MARION !MA!02738!38505!023!25!MARION !PLYM… Key points: 1. Contract awarded for miscellaneous communication equipment, indicating a need for specialized hardware. 2. The contract utilized full and open competition, suggesting a competitive bidding process. 3. A firm-fixed-price contract type was used, which shifts cost risk to the contractor. 4. The contract duration was substantial, spanning over 8 years, suggesting a long-term requirement. 5. The primary awardee is LOCKHEED MARTIN SIPPICAN, INC., a known defense contractor. 6. The contract falls under the 'Miscellaneous Communication Equipment' product service code.

Value Assessment

Rating: good

The total award amount of $247.8 million over an 8-year period suggests a significant investment in communication equipment. Benchmarking this against similar contracts for specialized communication hardware would provide further insight into its value. The firm-fixed-price nature of the contract implies that the government has negotiated a set price, which can be advantageous if costs are well-managed by the contractor. However, without detailed cost breakdowns or comparisons to market rates for specific components, a precise value-for-money assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The number of bidders is not explicitly stated in the provided data, but the use of full and open competition generally promotes a competitive environment. This process aims to ensure that the government receives the best possible pricing and value by allowing multiple companies to vie for the contract.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down prices through market forces, ensuring that government funds are used efficiently.

Public Impact

The Department of the Navy is the primary beneficiary, receiving essential communication equipment. The contract supports the acquisition of miscellaneous communication equipment, crucial for naval operations. The geographic impact is centered around the awardee's location in Massachusetts, but the equipment likely supports naval bases and operations globally. The contract supports jobs within the defense manufacturing sector, particularly at LOCKHEED MARTIN SIPPICAN, INC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the firm-fixed-price contract does not adequately account for all potential expenses.
Dependence on a single contractor for a critical piece of equipment could pose supply chain risks.
The long contract duration might lead to technological obsolescence if not managed proactively.

Positive Signals

The use of full and open competition suggests a robust market assessment and potential for competitive pricing.
Firm-fixed-price contracts provide cost certainty for the government.
The award to a known defense contractor like Lockheed Martin suggests a level of established capability and reliability.

Sector Analysis

This contract falls within the broader 'Communications Equipment Manufacturing' sector. The market for specialized military communication systems is often characterized by high barriers to entry due to technological complexity and stringent performance requirements. Spending in this sector is driven by national defense needs and technological advancements. Comparable spending benchmarks would involve analyzing other large-scale procurements of similar communication hardware by military branches.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside provision. However, the prime contractor, LOCKHEED MARTIN SIPPICAN, INC., may engage small businesses as subcontractors for components or services, which would contribute to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract type, which holds the contractor responsible for delivering goods at the agreed-upon price. Transparency is facilitated through contract award databases, though detailed performance metrics and cost breakdowns may not always be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Communication Systems
Defense Electronics Procurement
Wireless Communication Equipment
Military Hardware Manufacturing
Department of Defense Contracts

Risk Flags

Long contract duration may lead to technological obsolescence.
Potential for supply chain disruptions for specialized components.
Firm-fixed-price contracts can sometimes lead to quality compromises if not closely monitored.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.8 million to LOCKHEED MARTIN SIPPICAN, INC.. 200405!040001!1700!BW24A !NAVAL UNDERSEA WARFARE CENTER, N!N6660404C0001 !A!N! !N! ! !20040202!20090201!032046666!032046666!032046666!N!SIPPICAN, INC !7 BARNABAS ROAD !MARION !MA!02738!38505!023!25!MARION !PLYMOUTH !MASS !+000002812169!N!N!000000000000!5895!MISCELLANEOUS COMMUNICATION EQUIPMENT !C9E!ALL OTHER SUPPLIES AND EQUIPMENT !000 !* !334220!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN SIPPICAN, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $24.8 million.

What is the period of performance?

Start: 2004-02-02. End: 2012-07-13.

What is the specific type of 'miscellaneous communication equipment' procured under this contract, and what are its primary functions?

The Product Service Code (PSC) '334220' and the description 'MISCELLANEOUS COMMUNICATION EQUIPMENT' indicate a broad category of devices. While specific details are not provided, this typically encompasses specialized hardware used for transmitting, receiving, or processing information within military communication networks. These could include components for secure voice and data transmission, signal intelligence equipment, or specialized radio and networking devices tailored for naval environments. The primary functions would be to ensure reliable and secure communication for naval operations, potentially across various platforms like ships, submarines, and shore installations.

How does the $247.8 million award compare to historical spending on similar communication equipment by the Department of the Navy?

The provided data shows a single award of $247.8 million for this contract. To compare this to historical spending, one would need to analyze the Navy's procurement history for 'Miscellaneous Communication Equipment' (PSC 334220) or similar categories over previous fiscal years. This would involve searching contract databases for awards with comparable descriptions and quantities. A significant portion of this award was allocated to firm-fixed-price orders, suggesting a focus on predictable costs. Without access to a comprehensive historical database, it's difficult to definitively state if $247.8 million represents an increase, decrease, or stable level of spending compared to past procurements.

What are the key performance indicators (KPIs) or metrics used to assess the contractor's performance under this contract?

The provided data does not explicitly list the Key Performance Indicators (KPIs) or specific metrics used to assess LOCKHEED MARTIN SIPPICAN, INC.'s performance. However, for a firm-fixed-price contract of this nature, common performance metrics typically include on-time delivery of equipment, adherence to technical specifications and quality standards, and compliance with contractual terms. The contract's duration (over 8 years) suggests that performance would be monitored incrementally. The Department of the Navy would likely have internal quality assurance procedures and potentially require regular progress reports from the contractor to ensure compliance.

What is the track record of LOCKHEED MARTIN SIPPICAN, INC. in delivering similar communication equipment to the government?

LOCKHEED MARTIN SIPPICAN, INC. is a subsidiary of Lockheed Martin, a major defense contractor with a long history of supplying complex systems to the U.S. military. While this specific contract ID (N6660404C0001) pertains to a particular award, the company's broader track record involves numerous contracts for defense-related electronics and communication systems. Their experience in developing and manufacturing advanced technology for demanding military applications suggests a strong capability. However, a detailed analysis would require reviewing their performance history across multiple contracts, including any past issues or commendations related to quality, delivery, and cost management.

Are there any identified risks associated with this contract, such as technological obsolescence or supply chain vulnerabilities?

Yes, there are potential risks. Given the contract's long duration (from 2004 to 2012), technological obsolescence is a concern. Communication technology evolves rapidly, and equipment procured over an 8-year period might become outdated before the end of its intended service life. Supply chain vulnerabilities could also exist, particularly if the equipment relies on specialized components from a limited number of suppliers. The firm-fixed-price nature, while offering cost certainty, could also incentivize the contractor to use less expensive, potentially less reliable components if not strictly monitored, although the reputation of Lockheed Martin mitigates this somewhat. The government would need robust technical refresh plans and supplier management to mitigate these risks.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 7 BARNABAS ROAD, MARION, MA, 09

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline