DoD Awards $7.1M for System Hardware to Lockheed Martin, No Competition
Contract Overview
Contract Amount: $7,138,462 ($7.1M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2023-09-19
End Date: 2025-11-28
Contract Duration: 801 days
Daily Burn Rate: $8.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: OPTION 1 SYSTEM HARDWARE
Place of Performance
Location: OWEGO, TIOGA County, NEW YORK, 13827
State: New York Government Spending
Plain-Language Summary
Department of Defense obligated $7.1 million to LOCKHEED MARTIN CORPORATION for work described as: OPTION 1 SYSTEM HARDWARE Key points: 1. Significant award to a major defense contractor. 2. Lack of competition raises concerns about price discovery. 3. Contract duration extends over two years. 4. Sector is Other Aircraft Parts and Auxiliary Equipment Manufacturing.
Value Assessment
Rating: questionable
The award amount of $7.1M for system hardware is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to similar contracts in the defense sector.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source or limited competition award. This significantly limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The lack of competition means taxpayers may be paying a premium for this system hardware, as there was no market pressure to drive down costs.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. The Department of Defense is relying on a single vendor for critical hardware. The long contract duration could lock in potentially inflated prices.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for overpayment
- Sole-source award
Positive Signals
- Award to established contractor
- Clear contract end date
Sector Analysis
This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, a critical component of the defense industrial base. Spending in this area is often high due to specialized requirements and limited suppliers.
Small Business Impact
The contract was awarded to Lockheed Martin Corporation, a large prime contractor. There is no indication of small business participation in this specific award.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the price paid is fair and reasonable, despite the lack of competition. Accountability for the procurement decision is crucial.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competitive bidding
- Potential for inflated pricing
- Sole-source award
- Limited transparency on justification
- Long contract duration
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, ny, delivery-order, 1m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $7.1 million to LOCKHEED MARTIN CORPORATION. OPTION 1 SYSTEM HARDWARE
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 $7.1 million.
What is the period of performance?
Start: 2023-09-19. End: 2025-11-28.
What justification was provided for not competing this contract, and does it align with federal procurement regulations for sole-source awards?
Federal regulations allow for sole-source awards under specific circumstances, such as when only one responsible source can provide the required supplies or services. The justification would need to detail why competition was not feasible or advantageous, potentially citing unique capabilities, urgent needs, or existing system compatibility requirements. A thorough review of this justification is essential to ensure compliance and prevent potential misuse of sole-source authority.
What is the benchmark price for similar system hardware procured competitively by the Department of Defense or other agencies?
Establishing a benchmark price for similar system hardware requires detailed analysis of comparable contracts. This involves identifying contracts with similar specifications, quantities, and delivery timelines, preferably those awarded through full and open competition. Comparing the per-unit cost or total contract value against these benchmarks would reveal potential overpricing in this sole-source award and inform future procurement strategies.
What are the long-term implications of relying on a sole-source provider for this critical system hardware, particularly regarding supply chain resilience and future innovation?
Sole-source reliance can create vulnerabilities in the supply chain, making the DoD dependent on a single entity's production capacity and pricing. It may also stifle innovation, as there is less incentive for the contractor to develop cost-saving improvements or alternative solutions when competition is absent. This dependency could lead to increased costs and reduced flexibility in the long run.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
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: $7,138,462
Exercised Options: $7,138,462
Current Obligation: $7,138,462
Subaward Activity
Number of Subawards: 4
Total Subaward Amount: $247,545
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0001919G0029
IDV Type: BOA
Timeline
Start Date: 2023-09-19
Current End Date: 2025-11-28
Potential End Date: 2025-11-28 00:00:00
Last Modified: 2025-12-15
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