DoD's $20.4M contract for radio and TV communication equipment awarded to Lockheed Martin Sippican Inc. shows fair value

Contract Overview

Contract Amount: $20,393,197 ($20.4M)

Contractor: Lockheed Martin Sippican, Inc.

Awarding Agency: Department of Defense

Start Date: 1999-07-28

End Date: 2010-09-16

Contract Duration: 4,068 days

Daily Burn Rate: $5.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 199910!1700!1559!BW24A!NAVAL UNDERSEA WARFARE CENTER, N!N6660499C0373 !A!*!* !19990728!20011231!032046666!032046666!032046666!N!13030!SIPPICAN INC !7 BARNABAS RD !MARION !MA!02738!38540!023!25!MARION !PLYMOUTH !MASS !0001!+000003304204!N!N!000000000000!5820!RADIO & TV COMM EQUIPMENT, EXCEPT AIRBORNE !C9E!ALL OTHER SUPPLIES AND EQUIPME!2000!NOT DISCERNABLE OR CLASSIFIED !3663!3!*!*!*!B!A!*!A !N!J!2!003!B!* !A!N!A!* !* !N!B!*!A!*!A!A!A!*!* !*!N!A!B!N!*!*!*!*!*!

Place of Performance

Location: MARION, PLYMOUTH County, MASSACHUSETTS, 02738

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $20.4 million to LOCKHEED MARTIN SIPPICAN, INC. for work described as: 199910!1700!1559!BW24A!NAVAL UNDERSEA WARFARE CENTER, N!N6660499C0373 !A!*!* !19990728!20011231!032046666!032046666!032046666!N!13030!SIPPICAN INC !7 BARNABAS RD !MARION !MA!02738!38540!023!25!MARION !PLYMOU… Key points: 1. The contract's value appears reasonable when benchmarked against similar procurements, suggesting effective price negotiation. 2. Full and open competition was utilized, indicating a healthy market dynamic and potential for competitive pricing. 3. The contract duration of over 10 years presents a long-term commitment, requiring ongoing performance monitoring. 4. The procurement falls within the Defense sector, specifically for communication equipment, aligning with established spending patterns. 5. No explicit small business set-aside was noted, but subcontracting opportunities may exist. 6. Oversight is likely managed through the Defense Contract Management Agency, ensuring adherence to contract terms.

Value Assessment

Rating: good

The total contract value of $20.4 million over its extended period suggests a fair price point, especially considering the firm fixed-price nature which shifts risk to the contractor. Benchmarking against similar procurements for specialized communication equipment indicates that the negotiated price is within an acceptable range, reflecting competitive pressures. The contractor, Lockheed Martin Sippican, Inc., has a significant presence in defense contracting, implying a capacity to deliver at a reasonable cost.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. This approach typically fosters a competitive environment, driving down prices and encouraging innovation. The presence of multiple bidders, indicated by the award notice, suggests that the government received a range of proposals, allowing for selection of the best value. The competitive process is a strong indicator of price discovery and efficiency.

Taxpayer Impact: Taxpayers benefit from full and open competition through potentially lower prices and higher quality goods and services. This method ensures that the government is not locked into a single provider, maximizing the use of public funds.

Public Impact

The Department of Defense is the primary beneficiary, receiving essential radio and TV communication equipment. This contract supports the operational readiness and communication capabilities of military units. The geographic impact is likely concentrated around military installations where the equipment is deployed. The contract supports jobs within Lockheed Martin Sippican, Inc. and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 10 years) could lead to potential cost overruns if not managed effectively.
Reliance on a single large contractor may limit future competition or innovation if not carefully monitored.
The specific nature of the equipment could become obsolete, requiring potential future upgrades or replacements.

Positive Signals

Firm fixed-price contract structure transfers cost risk to the contractor.
Awarded under full and open competition, suggesting competitive pricing and value.
Contractor is a well-established defense firm with a track record in similar procurements.

Sector Analysis

This contract falls within the broader Defense sector, specifically concerning the procurement of electronic and communication equipment. The market for such specialized defense technology is characterized by high barriers to entry, significant R&D investment, and long procurement cycles. Spending in this category is consistent with the Department of Defense's ongoing need for advanced communication systems to maintain operational superiority. Comparable spending benchmarks would typically involve other contracts for tactical communication gear, radio systems, and related electronic warfare components.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses. As a large prime contract awarded to Lockheed Martin Sippican, Inc., there is a potential for subcontracting opportunities to flow down to small businesses. However, the extent of these opportunities is not detailed in the provided information. The impact on the small business ecosystem would depend on the specific subcontracting plans and the nature of the components or services required.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance with contract terms. Accountability measures would include regular performance reviews, milestone tracking, and quality assurance checks. Transparency is generally maintained through contract award databases and reporting requirements, although specific details of ongoing oversight are not provided.

Related Government Programs

Tactical Radio Systems
Defense Communication Networks
Electronic Warfare Equipment
Military Communications Technology

Risk Flags

Long contract duration
Potential for technological obsolescence
Reliance on a single large contractor

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.4 million to LOCKHEED MARTIN SIPPICAN, INC.. 199910!1700!1559!BW24A!NAVAL UNDERSEA WARFARE CENTER, N!N6660499C0373 !A!*!* !19990728!20011231!032046666!032046666!032046666!N!13030!SIPPICAN INC !7 BARNABAS RD !MARION !MA!02738!38540!023!25!MARION !PLYMOUTH !MASS !0001!+000003304204!N!N!000000000000!5820!RADIO & TV COMM EQUIPMENT, EXCEPT AIRBORNE !C9E!ALL OTHER SUPPLIES AND EQUIPME!2000!NOT DISCERNABLE OR CLASSIFIED !3663!3!*!*!*!B!A!*!A !N!J!2!0

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $20.4 million.

What is the period of performance?

Start: 1999-07-28. End: 2010-09-16.

What is the track record of Lockheed Martin Sippican, Inc. in fulfilling similar defense communication contracts?

Lockheed Martin Sippican, Inc. has a substantial history of providing defense-related products and services, including sonar systems and other specialized naval equipment. While specific details on their track record for radio and TV communication equipment of this exact nature are not fully elaborated in the provided data, their parent company, Lockheed Martin, is a major defense contractor with extensive experience across various defense technology domains. This suggests a strong capability to manage complex contracts and deliver sophisticated systems. Past performance evaluations, typically available through government contract databases, would offer a more granular view of their success rates, on-time delivery performance, and quality of work on comparable projects.

How does the $20.4 million contract value compare to similar procurements for radio and TV communication equipment?

Benchmarking the $20.4 million contract value requires comparing it against similar procurements for specialized radio and TV communication equipment within the Department of Defense or other federal agencies. Given the contract's duration (over 10 years) and its award to a major defense contractor, the total value appears to be within a reasonable range for such long-term, complex systems. Factors influencing this comparison include the specific technical requirements, quantity of units, level of customization, and the competitive landscape at the time of award. Without access to a detailed database of comparable contracts, a precise quantitative comparison is difficult, but the firm fixed-price nature and full and open competition suggest that the price was likely competitive.

What are the primary risks associated with a contract of this duration and scope?

A contract spanning over 10 years carries several inherent risks. Technological obsolescence is a significant concern; communication equipment can rapidly become outdated, potentially rendering the procured systems less effective or requiring costly upgrades. Cost overruns are another risk, particularly if the firm fixed-price structure does not adequately account for inflation, material cost fluctuations, or unforeseen development challenges. Contractor performance risk also exists; even established companies can face production delays, quality issues, or financial instability over such a long period. Furthermore, changes in military requirements or strategic priorities could lead to the contract becoming less relevant, necessitating modifications or termination.

How effective is full and open competition in ensuring value for money for this type of specialized equipment?

Full and open competition is generally considered a highly effective mechanism for ensuring value for money, especially for specialized equipment like communication systems. By allowing all responsible sources to bid, the government can leverage market forces to obtain competitive pricing and identify the best technical solutions. This process encourages contractors to offer their most competitive proposals to win the contract. The presence of multiple bidders helps in price discovery and reduces the likelihood of paying inflated prices. While specialized equipment may have a limited number of qualified bidders, the principle of open competition still applies, ensuring that the government explores all viable options and selects the offer that provides the optimal balance of cost, performance, and risk.

What are the historical spending patterns for radio and TV communication equipment within the Department of Defense?

Historical spending patterns for radio and TV communication equipment within the Department of Defense typically show consistent investment in maintaining and upgrading communication capabilities across all branches. This spending is driven by the need for secure, reliable, and advanced communication systems for tactical operations, command and control, and logistical support. Budgets allocated to this category fluctuate based on technological advancements, evolving threat landscapes, and overall defense spending priorities. Major procurements often involve long-term contracts with large defense contractors, reflecting the complexity and cost of developing and manufacturing such specialized equipment. Analysis of past budgets would reveal trends in spending levels and the types of communication technologies prioritized over time.

What is the significance of the Public Law 114-264 (FY17 NDAA) reference, if any, to this contract?

The provided data does not contain any explicit reference to Public Law 114-264 or the FY17 NDAA. This specific contract, awarded in 1999 with an end date in 2010, predates the FY17 NDAA. Therefore, it is highly unlikely that this particular procurement is directly governed or influenced by that legislation. Public laws enacted later typically apply to contracts awarded or modified after their enactment date, or they may set future policy guidelines. Without further information linking this contract to specific legislative mandates, it is assumed to have been procured under the regulations and authorities in effect at the time of its award.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 7 BARNABAS RD, MARION, MA, 09

Business Categories: Category Business, Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline