Lockheed Martin awarded $34.6M contract for low profile mast development and integration services

Contract Overview

Contract Amount: $34,566,588 ($34.6M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2006-12-26

End Date: 2013-09-30

Contract Duration: 2,470 days

Daily Burn Rate: $14.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: DEVELOPMENT OF A LOW PROFILE MAST, INTEGRATION SERVICES AND PRODUCTION OPTIONS

Place of Performance

Location: LIVERPOOL, ONONDAGA County, NEW YORK, 13088

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $34.6 million to LOCKHEED MARTIN CORPORATION for work described as: DEVELOPMENT OF A LOW PROFILE MAST, INTEGRATION SERVICES AND PRODUCTION OPTIONS Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 3. The duration of the contract is substantial at 2470 days, indicating a long-term project. 4. The contract was awarded by the Department of Defense, a major federal agency with significant procurement needs. 5. The North American Industry Classification System (NAICS) code 333314 points to optical instrument and lens manufacturing. 6. The contract was awarded to Lockheed Martin Corporation, a major defense contractor.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable contract data. The Cost Plus Fixed Fee (CPFF) structure means the government pays the contractor's costs plus a fixed fee, which can sometimes lead to higher overall costs compared to fixed-price contracts if cost controls are not stringent. The total award amount of $34.6 million over approximately 8 years suggests a moderate investment for development and integration services in the defense sector.

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 a bid. The presence of two bids suggests a degree of competition, but the specific number of bidders does not inherently guarantee the best price. The government's objective in full and open competition is to solicit proposals from the widest possible range of qualified contractors to ensure fair and reasonable pricing.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation. However, the ultimate value depends on the effectiveness of the bidding process and the government's negotiation strategy.

Public Impact

The primary beneficiaries are the Department of Defense, which will receive the developed low profile mast and integration services. The services delivered include the development, integration, and production options for a specialized mast system. The geographic impact is likely concentrated within defense installations and operational areas where this technology will be deployed. Workforce implications may include specialized engineering, manufacturing, and technical roles at Lockheed Martin and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts carry inherent risks of cost escalation if not closely monitored.
Long contract durations can sometimes lead to scope creep or outdated technology by completion.
Reliance on a single large contractor like Lockheed Martin may limit opportunities for smaller, innovative firms.

Positive Signals

Awarded through full and open competition, suggesting a robust and fair solicitation process.
The contract involves development and integration, indicating investment in advanced capabilities.
The Department of Defense's procurement signifies a critical need for the technology.

Sector Analysis

The defense industry is characterized by long-term development cycles and significant investment in specialized technologies. Contracts for advanced systems like optical instruments and integration services are common. The market size for defense procurement is substantial, with agencies like the DoD being major clients. This contract fits within the broader category of defense systems development and manufacturing, where companies like Lockheed Martin are key players.

Small Business Impact

There is no indication of a small business set-aside for this contract, as the 'ss' field is false. Furthermore, the 'sb' field is also false, suggesting no specific small business participation goals were mandated at the prime contract level. This means that while Lockheed Martin may engage small businesses as subcontractors, there were no direct set-aside provisions for them in this award.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are embedded in the contract terms, including reporting requirements and performance standards. Transparency is facilitated through contract award databases, though detailed operational performance data may be sensitive.

Related Government Programs

Defense Systems Development
Optical Instrument Manufacturing
Advanced Technology Integration
Department of Defense Procurement

Risk Flags

Cost Plus Fixed Fee contract type may lead to higher costs.
Long contract duration increases risk of obsolescence and scope creep.
Potential for cost overruns due to CPFF structure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.6 million to LOCKHEED MARTIN CORPORATION. DEVELOPMENT OF A LOW PROFILE MAST, INTEGRATION SERVICES AND PRODUCTION OPTIONS

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 $34.6 million.

What is the period of performance?

Start: 2006-12-26. End: 2013-09-30.

What is the historical spending pattern for Lockheed Martin Corporation with the Department of Defense for similar optical instrument and lens manufacturing contracts?

Analyzing Lockheed Martin Corporation's historical spending with the Department of Defense for contracts categorized under NAICS code 333314 (Optical Instrument and Lens Manufacturing) would require access to extensive federal procurement databases. However, as a major defense contractor, Lockheed Martin consistently receives substantial funding across various defense-related categories. Their portfolio often includes advanced systems, sensors, and related integration services. Without specific data on this particular NAICS code, it's difficult to provide precise historical figures, but it is reasonable to assume significant past awards in related technological areas, reflecting their established role in the defense industrial base.

How does the Cost Plus Fixed Fee (CPFF) contract type impact the potential for cost overruns compared to other contract types for this specific development project?

The Cost Plus Fixed Fee (CPFF) contract type means the government reimburses the contractor for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is often used for research and development or when the scope of work is not well-defined, as it allows for flexibility. However, it carries a higher risk of cost overruns for the government compared to fixed-price contracts. If the contractor's costs exceed initial estimates, the government still pays those costs, while the fee remains fixed. Effective oversight, stringent cost controls, and clear definition of allowable costs are crucial to mitigate overruns in CPFF contracts. For a development project like the low profile mast, where technical uncertainties may exist, CPFF can facilitate innovation but requires diligent management to ensure value for taxpayer money.

What are the specific performance metrics or deliverables associated with the 'DEVELOPMENT OF A LOW PROFILE MAST, INTEGRATION SERVICES AND PRODUCTION OPTIONS' contract?

The provided data snippet does not detail the specific performance metrics or deliverables for the 'DEVELOPMENT OF A LOW PROFILE MAST, INTEGRATION SERVICES AND PRODUCTION OPTIONS' contract. Typically, such information would be found in the contract's Statement of Work (SOW) or Performance Work Statement (PWS). These documents outline the technical requirements, quality standards, delivery schedules, and acceptance criteria. For a development and integration contract, key metrics might include system performance specifications (e.g., range, accuracy, reliability), successful integration with existing platforms, prototype testing results, and the readiness of production options. Without the SOW/PWS, a precise assessment of performance expectations and success criteria is not possible.

What is the significance of the North American Industry Classification System (NAICS) code 333314 in understanding the scope of this contract?

The North American Industry Classification System (NAICS) code 333314, 'Optical Instrument and Lens Manufacturing,' provides a crucial classification for this contract. It indicates that the primary focus of the work involves the design, development, manufacturing, or assembly of optical instruments and lenses. This could encompass a wide range of products, such as telescopes, microscopes, cameras, optical sighting equipment, and related components. For this specific contract, it suggests the 'low profile mast' likely incorporates sophisticated optical systems or sensors, and the integration services involve ensuring these optical components function correctly within the larger system and potentially with existing military platforms.

How does the contract's duration of 2470 days (approximately 6.7 years) influence the risk assessment for this project?

A contract duration of 2470 days (approximately 6.7 years) for a development and integration project introduces several risk factors. Firstly, the extended timeline increases the potential for technological obsolescence; the technology developed might be outdated by the time the contract concludes, especially in rapidly evolving fields. Secondly, long-term contracts can be susceptible to scope creep, where requirements may evolve or expand beyond the original intent, potentially leading to cost increases if not managed strictly. Thirdly, maintaining consistent oversight and contractor performance over such a long period requires sustained effort from the contracting agency. Finally, economic or geopolitical shifts during this period could impact funding availability or project priorities. Mitigating these risks requires robust contract management, regular reviews, and flexibility to adapt to changing circumstances.

Industry Classification

NAICS: Manufacturing › Commercial and Service Industry Machinery Manufacturing › Optical Instrument and Lens Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N6660406R0472

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 497 ELECTRONICS PKWY # 5 # BLD, LIVERPOOL, NY, 13088

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $34,566,588

Exercised Options: $34,566,588

Current Obligation: $34,566,588

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline