DoD's $32.7M contract for ARPDD system upgrades awarded to Lockheed Martin without competition

Contract Overview

Contract Amount: $32,704,896 ($32.7M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2012-06-22

End Date: 2018-12-30

Contract Duration: 2,382 days

Daily Burn Rate: $13.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: OPERATIONAL TEST PROGRAM SETS (OTPS) TO SUPPORT UPGRADES TO THE AUTOMATED RADAR PERISCOPE DETECTION&DISCRIMINATION (ARPDD) SYSTEM FOR THE H-60 AIRCRAFT.

Place of Performance

Location: OWEGO, TIOGA County, NEW YORK, 13827

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $32.7 million to LOCKHEED MARTIN CORPORATION for work described as: OPERATIONAL TEST PROGRAM SETS (OTPS) TO SUPPORT UPGRADES TO THE AUTOMATED RADAR PERISCOPE DETECTION&DISCRIMINATION (ARPDD) SYSTEM FOR THE H-60 AIRCRAFT. Key points: 1. Contract awarded to a single, established provider, raising questions about competitive pricing. 2. Long contract duration (over 6 years) suggests a significant, ongoing need for system support. 3. Fixed-price contract type aims to control costs, but initial pricing needs benchmarking. 4. Focus on radar periscope detection and discrimination highlights a critical defense capability. 5. Awarded by the Department of the Navy, indicating a specific fleet requirement. 6. No small business involvement noted, potentially missing opportunities for smaller contractors.

Value Assessment

Rating: questionable

The contract's value of $32.7 million for operational test program sets to support the ARPDD system is difficult to benchmark without comparable data for similar system upgrades. The firm fixed-price structure is a positive indicator for cost control. However, the lack of competition means there's no market-driven price discovery to assess if this represents excellent value for money. Further analysis would require comparing the per-unit cost of test program sets or the overall cost of similar radar system upgrades across different defense platforms or agencies.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. The Department of Defense likely determined that Lockheed Martin was the only responsible source capable of providing the required services, possibly due to proprietary technology, unique expertise, or existing system integration. The lack of multiple bidders means there was no opportunity for price competition, which could lead to higher costs for the government compared to a fully competed contract.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible pricing through competitive bidding, potentially resulting in less favorable terms for taxpayers.

Public Impact

The primary beneficiaries are the U.S. Navy's H-60 aircraft fleet, which will receive upgraded radar periscope detection and discrimination capabilities. The services delivered include the development and support of operational test program sets, crucial for ensuring the effectiveness of system upgrades. The geographic impact is primarily within the Department of Defense's operational theaters where H-60 aircraft are deployed. Workforce implications include specialized technical roles within Lockheed Martin and potentially within the Navy for testing and integration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs.
Sole-source award raises concerns about contractor lock-in and limited future flexibility.
Long contract duration without competitive re-evaluation could reduce incentive for efficiency.
Absence of small business participation limits broader economic impact and innovation.

Positive Signals

Firm fixed-price contract type provides cost certainty for the government.
Award to an established contractor like Lockheed Martin suggests a high likelihood of successful technical execution.
Focus on critical defense capabilities like radar detection is essential for national security.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on electronic warfare and radar systems. The market for such specialized defense technology is often dominated by a few large prime contractors due to high barriers to entry, including significant R&D investment, intellectual property, and security clearances. Comparable spending benchmarks would involve analyzing other contracts for radar system upgrades, electronic warfare components, or specialized testing equipment within the DoD, which often represent substantial investments.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to involve significant subcontracting opportunities for them based on the provided data. The award to a large prime contractor like Lockheed Martin suggests that the primary work is likely performed in-house or through established supply chains. This represents a missed opportunity to engage the small business ecosystem and foster competition among smaller, specialized firms in the defense technology space.

Oversight & Accountability

Oversight for this contract would typically 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 obligates the contractor to deliver specified outcomes within the agreed price. Transparency is generally limited for sole-source awards, though contract details and performance reports may be available through official channels or Freedom of Information Act requests. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

H-60 Helicopter Support Contracts
Radar Systems Procurement
Electronic Warfare Systems
Naval Aviation Modernization Programs
Automated Detection and Discrimination Systems

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Limited small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.7 million to LOCKHEED MARTIN CORPORATION. OPERATIONAL TEST PROGRAM SETS (OTPS) TO SUPPORT UPGRADES TO THE AUTOMATED RADAR PERISCOPE DETECTION&DISCRIMINATION (ARPDD) SYSTEM FOR THE H-60 AIRCRAFT.

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 $32.7 million.

What is the period of performance?

Start: 2012-06-22. End: 2018-12-30.

What is Lockheed Martin's track record with the Department of Defense for similar radar system upgrades?

Lockheed Martin Corporation is a major defense contractor with extensive experience in developing and supporting complex defense systems, including radar and electronic warfare technologies. They have a long history of contracts with the Department of Defense, encompassing a wide range of aircraft platforms and systems. For radar systems specifically, their portfolio includes advanced airborne radar, ground-based radar, and naval radar solutions. While specific data on their track record for ARPDD system upgrades is not detailed here, their overall performance with the DoD is generally characterized by large-scale, technologically advanced projects. Performance metrics would typically be tracked through contract close-outs, performance evaluations, and any associated award or termination data, which would need to be accessed through specific DoD contract databases or reports.

How does the $32.7 million cost compare to similar radar system upgrade contracts within the Navy or DoD?

Benchmarking the $32.7 million cost for these operational test program sets against similar contracts is challenging without access to a comprehensive database of comparable procurements. However, radar system upgrades, especially for critical platforms like the H-60, are typically complex and expensive endeavors. Factors influencing cost include the sophistication of the technology, the scope of the upgrade (e.g., hardware, software, integration), the duration of the support, and the level of testing required. Given that this was a sole-source award to Lockheed Martin, it is plausible that the price may be higher than if it had been competitively bid. A thorough comparison would involve identifying contracts for similar radar system upgrades on other naval or air platforms, analyzing their total value, contract type, duration, and the specific capabilities delivered.

What are the primary risks associated with a sole-source award for this type of defense system?

The primary risks associated with a sole-source award for the ARPDD system upgrades include potential cost overruns due to a lack of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and the risk of contractor lock-in. Without competition, the government has less leverage to negotiate favorable pricing and terms. Furthermore, relying on a single source can create vulnerabilities if the contractor experiences financial difficulties, undergoes restructuring, or if their technology becomes obsolete. There's also a risk that the government may pay a premium for the technology and services compared to what could have been achieved through a competitive bidding process, impacting overall value for taxpayer money.

How effective are operational test program sets in ensuring the successful upgrade of complex radar systems?

Operational test program sets (OTPS) are crucial for ensuring the successful upgrade of complex radar systems like the ARPDD. They provide a standardized and realistic environment to validate that the upgraded system meets all performance requirements, functions correctly under operational conditions, and integrates seamlessly with existing platforms and other systems. OTPS help identify and rectify defects, bugs, or performance issues before the system is deployed in the field, thereby reducing the risk of mission failure, costly retrofits, and safety hazards. Their effectiveness lies in their ability to simulate real-world scenarios, allowing for thorough testing of detection, discrimination, and other critical functionalities, ultimately contributing to the overall reliability and effectiveness of the H-60 aircraft's radar capabilities.

What are the historical spending patterns for ARPDD system support or similar radar upgrades within the Department of the Navy?

Historical spending patterns for the ARPDD system support or similar radar upgrades within the Department of the Navy are not explicitly detailed in the provided data. However, it is generally understood that investments in advanced radar and electronic warfare systems for naval aviation are substantial and ongoing due to the evolving threat landscape and the need to maintain technological superiority. Contracts for such systems often span multiple years and involve significant dollar values, reflecting the complexity of the technology and the rigorous testing and integration required. Analyzing past spending on radar modernization for platforms like the H-60 or comparable naval aircraft would likely reveal a trend of consistent, high-value investment in these critical capabilities.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N6833511R1243

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 1801 STATE RT 17 C, OWEGO, NY, 13827

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: $32,704,896

Exercised Options: $32,704,896

Current Obligation: $32,704,896

Subaward Activity

Number of Subawards: 23

Total Subaward Amount: $76,911,609

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline