DoD's $12.3M contract for electronic parts awarded to Lockheed Martin without competition

Contract Overview

Contract Amount: $12,316,046 ($12.3M)

Contractor: Lockheed Martin Corp

Awarding Agency: Department of Defense

Start Date: 2008-05-05

End Date: 2008-12-31

Contract Duration: 240 days

Daily Burn Rate: $51.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: Q-70 UNITS FOR CENTRIX-M, ISNS AND SCI NETWORKS.

Place of Performance

Location: JOHNSTOWN, CAMBRIA County, PENNSYLVANIA, 15901

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $12.3 million to LOCKHEED MARTIN CORP for work described as: Q-70 UNITS FOR CENTRIX-M, ISNS AND SCI NETWORKS. Key points: 1. Contract awarded on a firm-fixed-price basis, indicating defined cost and delivery expectations. 2. The contract was not competed, raising questions about potential price overruns and limited market engagement. 3. Awarded to a single bidder, suggesting potential lack of competitive pressure on pricing and innovation. 4. The contract duration of 240 days suggests a short-term need for the specified electronic parts. 5. The contract falls under 'Other Electronic Parts and Equipment Merchant Wholesalers' NAICS code. 6. The award was made by the Department of the Navy, a major component of the DoD.

Value Assessment

Rating: questionable

The contract's value of $12.3 million for electronic parts is difficult to benchmark without specific details on the 'Q-70 UNITS FOR CENTRIX-M, ISNS AND SCI NETWORKS.' The lack of competition is a significant concern, as it prevents comparison with other potential suppliers and market rates. This non-competitive award raises a red flag regarding whether the government secured the best possible value for these critical electronic components.

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 the Navy did not solicit bids from multiple vendors. This approach limits the opportunity for price discovery and may result in higher costs compared to a competitive procurement process. The absence of competition means the government did not benefit from the potential for lower prices or innovative solutions that multiple bidders might have offered.

Taxpayer Impact: Taxpayers may have paid a premium for these electronic parts due to the lack of competitive bidding. Without a competitive process, there is less assurance that the price reflects fair market value.

Public Impact

The Department of Defense, specifically the Department of the Navy, is the direct beneficiary of these electronic parts. The contract supports the acquisition of 'Q-70 UNITS' for 'CENTRIX-M, ISNS AND SCI NETWORKS,' which are likely critical for military communication and information systems. The geographic impact is primarily within the Department of the Navy's operational areas, though the parts themselves may be manufactured elsewhere. Workforce implications are likely limited to the contractor's personnel involved in supplying these specific electronic components.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices.
Sole-source awards can reduce transparency in pricing.
Potential for missed opportunities for cost savings through competitive bidding.
Limited visibility into alternative solutions or technological advancements from other vendors.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Award to a large, established defense contractor like Lockheed Martin suggests potential for reliable delivery.
The contract specifies units for critical networks (CENTRIX-M, ISNS, SCI), indicating support for essential defense infrastructure.

Sector Analysis

This contract falls within the broader electronics manufacturing and wholesale sector. The market for specialized electronic components for defense applications is often characterized by high barriers to entry due to stringent technical requirements and security protocols. While the NAICS code points to wholesale, the end-use in defense networks suggests a specialized segment. Benchmarking spending in this niche is challenging without more granular data on similar defense-specific electronic part procurements.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no information provided regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, and it does not contribute to meeting small business contracting goals.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and financial management divisions. As a firm-fixed-price contract, oversight would focus on ensuring delivery of the specified units and adherence to the contract terms. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense procurement of electronic components
Navy communication systems contracts
Information Systems Network contracts
Sole-source defense contracts

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.3 million to LOCKHEED MARTIN CORP. Q-70 UNITS FOR CENTRIX-M, ISNS AND SCI NETWORKS.

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $12.3 million.

What is the period of performance?

Start: 2008-05-05. End: 2008-12-31.

What are the specific 'Q-70 UNITS' and their function within CENTRIX-M, ISNS, and SCI networks?

The provided data does not detail the specific function or technical specifications of the 'Q-70 UNITS.' However, CENTRIX-M (Combined Enterprise Regional Information Exchange Military) systems facilitate secure information sharing among coalition partners. ISNS (Integrated Ship Network System) and SCI (Sensitive Compartmented Information) networks are critical for command, control, and intelligence operations within the Department of the Navy. The 'Q-70 UNITS' are likely specialized electronic components, such as processors, transceivers, or interface modules, essential for the operation and integration of these secure communication and information-sharing platforms. Their procurement suggests a need for upgrades, replacements, or expansion of these vital defense networks.

Why was this contract awarded on a sole-source basis instead of being competed?

The data indicates the contract was 'NOT COMPETED,' implying a sole-source award. Common justifications for sole-source procurements include situations where only one responsible source can provide the required supplies or services, or when there is a compelling urgency that precludes full and open competition. Without further documentation, it's impossible to definitively state the reason. However, for specialized electronic parts for sensitive defense networks, it's possible that Lockheed Martin was the only vendor capable of meeting the stringent technical specifications, security requirements, or integration needs within the required timeframe. Alternatively, a specific program requirement might have dictated the use of components exclusively supplied or integrated by Lockheed Martin.

How does the $12.3 million contract value compare to similar procurements for electronic parts by the Department of the Navy?

Direct comparison of this $12.3 million contract value is challenging without more specific details on the 'Q-70 UNITS' and their technical specifications. The 'Other Electronic Parts and Equipment Merchant Wholesalers' NAICS code is broad. However, given the sole-source nature and the mention of specialized networks (CENTRIX-M, ISNS, SCI), this likely represents a procurement of high-value, potentially proprietary or highly specialized electronic components. Without access to contract databases that allow for filtering by specific component types and competitive history, it's difficult to establish a precise benchmark. Generally, sole-source awards tend to be higher than competitively bid contracts for similar items due to the lack of price pressure.

What is Lockheed Martin's track record with the Department of the Navy for similar electronic component procurements?

Lockheed Martin is a major defense contractor with extensive experience supplying a wide range of systems and components to the Department of the Navy. While this specific contract is for 'Q-70 UNITS' under a broad NAICS code, Lockheed Martin is known for its involvement in complex defense electronics, communication systems, and integrated platforms. Their track record with the Navy typically involves large-scale, high-value contracts for aircraft, ships, and associated systems, which inherently include numerous electronic components. A detailed analysis would require examining their past performance ratings and contract history specifically related to electronic parts and network integration for naval systems, which is beyond the scope of the provided data.

What are the potential risks associated with a sole-source award for critical defense electronic parts?

The primary risks associated with a sole-source award for critical defense electronic parts include: 1. **Higher Costs:** Without competition, the government may pay a premium, as the contractor faces less pressure to offer the lowest possible price. 2. **Limited Innovation:** The absence of multiple bidders can stifle innovation, as there's no incentive for alternative suppliers to propose more advanced or cost-effective solutions. 3. **Supply Chain Vulnerability:** Relying on a single source can create a vulnerability if that source experiences production issues, financial difficulties, or geopolitical disruptions. 4. **Reduced Transparency:** Sole-source awards can offer less transparency into pricing structures and cost justifications compared to competitive processes. 5. **Potential for Lock-in:** The government may become dependent on a single vendor for specific components, making future transitions or upgrades more difficult and costly.

Industry Classification

NAICS: Wholesale Trade › Household Appliances and Electrical and Electronic Goods Merchant Wholesalers › Other Electronic Parts and Equipment Merchant Wholesalers

Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS

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: 3333 PILOT KNOB RD, SAINT PAUL, MN, 04

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $12,316,046

Exercised Options: $12,316,046

Current Obligation: $12,316,046

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0002405D5130

IDV Type: IDC

Timeline