DoD's $32M Undefinitized Contract for Mode S/5 Production Awarded to Lockheed Martin

Contract Overview

Contract Amount: $32,024,859 ($32.0M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2007-10-04

End Date: 2012-07-30

Contract Duration: 1,761 days

Daily Burn Rate: $18.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: UNDEFINITIZED CONTRACT ACTION - MODE S/5 PRODUCTION (CCP 3068)

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76108

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $32.0 million to LOCKHEED MARTIN CORPORATION for work described as: UNDEFINITIZED CONTRACT ACTION - MODE S/5 PRODUCTION (CCP 3068) Key points: 1. Significant spending on engineering services for aircraft components. 2. Sole-source award to a major defense contractor. 3. Potential for cost overruns due to undefinitized nature. 4. Long contract duration of 1761 days. 5. No small business participation noted.

Value Assessment

Rating: questionable

The contract is undefinitized, meaning final pricing is not yet established. This carries inherent risk of cost escalation compared to definitized contracts with pre-negotiated rates. Benchmarking is difficult without final pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating a lack of competition. This limits price discovery and potentially leads to higher costs for the government as the contractor faces no competitive pressure.

Taxpayer Impact: The lack of competition and undefinitized nature of the contract raise concerns about taxpayer value. Without competitive bidding, there's a risk of overpaying for the engineering services provided.

Public Impact

Taxpayers may be paying a premium due to the sole-source, undefinitized contract. The long duration suggests a critical, ongoing need for these engineering services. Lack of transparency in final pricing until definitization impacts accountability. Potential for cost growth impacts future budget allocations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Undefinitized contract action
Sole-source award
No small business participation
Long contract duration

Positive Signals

Awarded to a known, capable contractor
Firm fixed price potential

Sector Analysis

This contract falls under Engineering Services (NAICS 541330), a sector often associated with defense and aerospace. Spending benchmarks for such specialized services can vary widely, but sole-source awards typically exceed competitive ones.

Small Business Impact

The contract data indicates no small business participation (sb: false). This suggests that the prime contractor, Lockheed Martin, is handling the entirety of the work, potentially missing opportunities to leverage smaller, specialized firms.

Oversight & Accountability

The undefinitized nature of the contract requires close oversight to ensure fair pricing and prevent cost creep. The Department of the Air Force must diligently work towards definitization to establish clear terms and accountability.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Risk of cost overruns due to undefinitized contract
Lack of competitive bidding may lead to inflated prices
Potential for scope creep without clear definitization
Limited transparency on final costs
No small business involvement misses potential cost savings/innovation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.0 million to LOCKHEED MARTIN CORPORATION. UNDEFINITIZED CONTRACT ACTION - MODE S/5 PRODUCTION (CCP 3068)

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 Air Force).

What is the total obligated amount?

The obligated amount is $32.0 million.

What is the period of performance?

Start: 2007-10-04. End: 2012-07-30.

What is the primary justification for the sole-source award and the undefinitized contract action?

The justification for a sole-source, undefinitized contract action typically stems from urgent needs, unique capabilities possessed by a single contractor, or the complexity of the services requiring extensive negotiation. For this Mode S/5 Production contract, the specific reasons would need to be detailed in the contract's justification and approval (J&A) document, which is not provided here. Understanding this rationale is crucial for assessing the necessity and potential risks.

What are the projected final costs once the contract is definitized, and how do they compare to similar engineering services contracts?

Without the definitized pricing, it's impossible to determine the final costs or benchmark them accurately. The initial award amount of $32M is an estimate or ceiling. The final price depends on negotiations and the actual costs incurred. Comparing it to similar contracts is challenging due to the undefinitized status and potential uniqueness of the 'Mode S/5 Production' service. Post-definitization analysis would be required.

What specific engineering services are included under 'Mode S/5 Production', and what is their criticality to Air Force operations?

The specific engineering services encompassed by 'Mode S/5 Production' are not detailed in the provided data. However, 'Mode S' typically refers to a secondary surveillance radar transponder system used in aviation for air traffic control. Production-related engineering services could involve design, development, testing, or sustainment of this system or its components. Its criticality likely relates to air traffic management, safety, and operational readiness for Air Force aircraft.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

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

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 1 LOCKHEED BLVD, FORT WORTH, TX, 76108

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $32,024,859

Exercised Options: $32,024,859

Current Obligation: $32,024,859

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: F4262001D0058

IDV Type: IDC

Timeline