Navy awards $270M+ to Lockheed Martin for ECASS CORE STATIONS, a sole-source contract

Contract Overview

Contract Amount: $270,442,068 ($270.4M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2017-02-01

End Date: 2024-12-31

Contract Duration: 2,890 days

Daily Burn Rate: $93.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ECASS CORE STATIONS (NAVY)

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32825

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $270.4 million to LOCKHEED MARTIN CORPORATION for work described as: ECASS CORE STATIONS (NAVY) Key points: 1. Contract awarded on a sole-source basis, limiting competitive price discovery. 2. Long contract duration of 2890 days suggests a sustained need for these systems. 3. The firm fixed-price structure aims to control costs, but initial pricing requires scrutiny. 4. This contract represents a significant investment in specialized defense equipment. 5. Performance context is crucial given the long-term nature and sole-source award. 6. Sector positioning is within advanced defense manufacturing and control systems.

Value Assessment

Rating: fair

The contract's value of over $270 million for ECASS CORE STATIONS requires careful benchmarking against similar specialized defense systems. As a sole-source award, direct price comparisons are difficult. The firm fixed-price type provides cost certainty, but the initial negotiated price is key. Without more data on the specific components and services, assessing value-for-money is challenging, though the long duration implies a critical and sustained need.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor, Lockheed Martin Corporation, was solicited. This approach bypasses the competitive bidding process, which typically drives down prices and fosters innovation. While sole-source awards can be justified for unique capabilities or national security reasons, they reduce transparency and potentially increase costs for taxpayers.

Taxpayer Impact: The lack of competition means taxpayers may not benefit from the cost savings and improved value that a competitive bidding process could have yielded.

Public Impact

The primary beneficiaries are the U.S. Navy, receiving critical operational systems. Services delivered include the provision and potential sustainment of ECASS CORE STATIONS. Geographic impact is primarily within naval operations, with potential implications for fleet readiness. Workforce implications may involve specialized engineering, manufacturing, and technical support roles at Lockheed Martin and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs.
Long contract duration increases exposure to potential cost overruns or scope creep if not managed tightly.
Lack of transparency in the procurement process due to sole-source nature.
Dependence on a single contractor for critical defense systems.

Positive Signals

Firm fixed-price contract type provides cost certainty for the government.
Long-term award suggests a stable and predictable need for the systems.
Award to a major defense contractor with established capabilities.

Sector Analysis

The ECASS CORE STATIONS contract falls within the defense electronics and systems manufacturing sector. This sector is characterized by high R&D investment, long product lifecycles, and significant government procurement. The market is dominated by a few large prime contractors like Lockheed Martin. Comparable spending benchmarks would involve other complex electronic warfare or command and control systems for military applications, often awarded through sole-source or limited competition due to specialized requirements.

Small Business Impact

This contract does not appear to have a small business set-aside component, as it was awarded sole-source to Lockheed Martin Corporation. There is no explicit information regarding subcontracting plans for small businesses within the provided data. The lack of a set-aside or clear subcontracting goals could limit opportunities for small businesses in this specific procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Given the sole-source nature, robust justification and review processes are expected. Transparency may be limited due to the procurement method, but contract performance and financial reporting would be subject to standard government oversight and potentially Inspector General reviews if issues arise.

Related Government Programs

Naval Combat Systems
Electronic Warfare Systems
Defense Electronics Manufacturing
Command and Control Systems

Risk Flags

Sole-source award
Long contract duration
Lack of public performance metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $270.4 million to LOCKHEED MARTIN CORPORATION. ECASS CORE STATIONS (NAVY)

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 $270.4 million.

What is the period of performance?

Start: 2017-02-01. End: 2024-12-31.

What is the specific function and technological sophistication of the ECASS CORE STATIONS?

The ECASS (E-2D Advanced Control System) CORE STATIONS are integral components of the E-2D Advanced Hawkeye aircraft, a critical airborne early warning and control (AEW&C) platform for the U.S. Navy. These stations house the sophisticated computing, processing, and display systems that enable the aircraft's radar operators to detect, track, and identify airborne and surface threats over vast distances. The technological sophistication lies in their ability to integrate data from multiple sensors, manage complex communication networks, and provide a comprehensive tactical picture to command centers. The "CORE" aspect likely refers to the central processing and data fusion elements that are fundamental to the E-2D's advanced capabilities, distinguishing it from earlier Hawkeye variants.

How does the $270M+ award compare to historical spending on similar defense systems?

Comparing the $270 million award for ECASS CORE STATIONS requires context regarding the specific nature of the systems and the timeframe. Large, complex defense systems, especially those involving advanced electronics, software, and integration for platforms like the E-2D Hawkeye, often involve multi-year contracts in the hundreds of millions or even billions of dollars. For instance, the overall E-2D Advanced Hawkeye program has seen significant investment over its lifecycle. This specific award, covering a substantial period (2017-2024), appears consistent with the procurement of major sub-systems for advanced military aircraft. However, without direct comparisons to the unit cost or total program cost of functionally equivalent systems from other nations or previous generations, a precise value comparison is difficult.

What are the primary risks associated with a sole-source contract of this magnitude and duration?

The primary risks associated with a sole-source contract of this magnitude ($270M+) and duration (2890 days) are significant. Firstly, the lack of competition can lead to inflated pricing, as the contractor faces no market pressure to offer the most cost-effective solution. Secondly, there's a risk of contractor complacency or reduced incentive to innovate, as there's no competitive threat. Thirdly, the long duration increases the potential for cost overruns if the initial price was not adequately estimated or if unforeseen technical challenges arise. Finally, there's a strategic risk of vendor lock-in, making it difficult and costly to switch providers or technologies in the future, potentially hindering long-term modernization efforts.

What is Lockheed Martin's track record with the E-2D Hawkeye program and similar defense electronics contracts?

Lockheed Martin Corporation has a well-established and extensive track record with the E-2D Advanced Hawkeye program, serving as a key partner and integrator for the aircraft's advanced systems. They are responsible for significant portions of the E-2D's mission systems, including the radar, command and control, and communications capabilities. Their history with the Hawkeye platform, dating back to earlier variants, provides a deep understanding of its operational requirements and technical complexities. Beyond the E-2D, Lockheed Martin is a major player in defense electronics, producing a wide array of sophisticated systems for various military platforms, including radar, electronic warfare, and command and control solutions. This extensive experience suggests a strong capability to deliver on the ECASS CORE STATIONS contract.

Are there any performance metrics or key performance indicators (KPIs) publicly available for this contract?

Publicly available performance metrics or Key Performance Indicators (KPIs) for specific, non-public defense contracts like the ECASS CORE STATIONS are typically limited due to security and proprietary considerations. While the contract itself is listed in federal databases, detailed performance data, such as system uptime, detection range achieved, or specific mission success rates, is usually classified or restricted to government program managers and the contractor. The government would have internal metrics to assess Lockheed Martin's performance against contract requirements, but these are not generally shared publicly. Contract award and completion notices are public, but the granular data on how well the system performed operationally is not.

What is the historical spending trend for ECASS CORE STATIONS or similar systems within the Department of the Navy?

Historical spending trends for ECASS CORE STATIONS specifically are difficult to isolate without more granular contract data beyond the single $270M+ award. However, spending on the E-2D Advanced Hawkeye program as a whole has been substantial and sustained over many years, reflecting its critical role in naval aviation. The Department of the Navy consistently invests heavily in advanced airborne early warning and control capabilities. Trends would show significant outlays for aircraft procurement, system development, integration, and sustainment. Spending on components like the ECASS CORE STATIONS would be a part of this larger program expenditure, likely showing a steady investment pattern aligned with the E-2D's production and operational deployment phases.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Other Measuring and Controlling Device Manufacturing

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N6833516R0119

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 100 GLOBAL INNOVATION CIR, ORLANDO, FL, 32825

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: $280,253,396

Exercised Options: $276,463,264

Current Obligation: $270,442,068

Actual Outlays: $25,787,306

Subaward Activity

Number of Subawards: 247

Total Subaward Amount: $298,927,726

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline