DoD's $42.7M Countermeasure Receiver Contract Awarded to Lockheed Martin Under Sole Source Justification

Contract Overview

Contract Amount: $42,721,940 ($42.7M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2012-09-27

End Date: 2015-09-30

Contract Duration: 1,098 days

Daily Burn Rate: $38.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: COUNTERMEASURE, RECEIVER

Place of Performance

Location: OWEGO, TIOGA County, NEW YORK, 13827, UNITED STATES OF AMERICA

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $42.7 million to LOCKHEED MARTIN CORPORATION for work described as: COUNTERMEASURE, RECEIVER Key points: 1. Contract awarded to a single, established defense contractor, limiting potential for competitive pricing. 2. The fixed-price contract structure aims to control costs, but the lack of competition may inflate the unit price. 3. Performance period of nearly three years suggests a sustained need for these specialized components. 4. The award falls within the broader aircraft parts manufacturing sector, indicating a specific niche within defense procurement. 5. No small business set-aside was applied, suggesting the prime contractor will likely manage subcontracting. 6. The contract's value is substantial, requiring robust oversight to ensure effective use of funds.

Value Assessment

Rating: fair

The contract value of $42.7 million for specialized aircraft components appears significant. Without competitive bidding, it's challenging to benchmark the pricing against market rates or similar contracts. The fixed-price nature provides some cost certainty, but the absence of competition raises concerns about whether the government secured the best possible value. Further analysis would require access to detailed cost breakdowns and comparisons with similar sole-source procurements for specialized defense equipment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Lockheed Martin Corporation, was solicited. This approach is typically justified when only one responsible source is available or when there's a compelling urgency. The lack of competition means there was no opportunity for price discovery through bidding, potentially leading to higher costs for the government compared to a competed contract. The justification for sole-source procurement would need to be thoroughly reviewed to ensure it was appropriate.

Taxpayer Impact: Sole-source awards limit taxpayer value by bypassing the cost-saving benefits of a competitive bidding process. This can result in higher prices paid for goods and services.

Public Impact

The primary beneficiaries are the Department of Defense, which receives critical countermeasure receiver technology. The contract supports the production and delivery of specialized aircraft parts essential for defense operations. The geographic impact is primarily tied to Lockheed Martin's facilities, likely in New York where the contract was registered. This contract supports skilled manufacturing jobs within the aerospace and defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source justification requires rigorous scrutiny to ensure necessity.
Limited transparency into cost drivers due to non-competitive nature.

Positive Signals

Award to a large, established defense contractor suggests a high likelihood of technical capability and delivery.
Fixed-price contract type provides cost certainty for the government.
Contract duration indicates a sustained and important need for the product.

Sector Analysis

This contract falls within the broader aerospace and defense manufacturing sector, specifically focusing on aircraft parts and auxiliary equipment. The market for specialized defense components like countermeasure receivers is often characterized by high barriers to entry, proprietary technology, and a limited customer base (primarily government agencies). Spending in this area is driven by national security requirements and technological advancements in electronic warfare and aircraft survivability. Comparable spending benchmarks would likely be found within other sole-source or limited-competition contracts for similar high-tech defense systems.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. This suggests that Lockheed Martin will likely fulfill the contract using its own resources or through larger, established subcontractors. The absence of a small business focus in this sole-source award means limited direct benefit to the small business ecosystem for this particular procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. As a sole-source award, transparency might be limited compared to competed contracts. Accountability measures would focus on meeting the technical specifications and delivery schedules outlined in the contract. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Parts Manufacturing
Defense Electronics
Electronic Warfare Systems
Aerospace and Defense Procurement
Sole-Source Defense Contracts

Risk Flags

Sole-source award lacks competitive pricing pressure.
Potential for cost overruns if negotiation is weak.
Limited transparency into cost justification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $42.7 million to LOCKHEED MARTIN CORPORATION. COUNTERMEASURE, RECEIVER

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $42.7 million.

What is the period of performance?

Start: 2012-09-27. End: 2015-09-30.

What is the specific nature of the 'COUNTERMEASURE, RECEIVER' being procured under this contract?

The provided data identifies the item as 'COUNTERMEASURE, RECEIVER' and classifies the North American Industry Classification System (NAICS) code as 336413, which pertains to 'Other Aircraft Parts and Auxiliary Equipment Manufacturing.' This suggests the contract is for components related to systems designed to detect, identify, and potentially counter incoming threats to aircraft. These receivers are likely critical elements within a larger electronic warfare or defensive countermeasures suite, playing a vital role in aircraft survivability by sensing and processing signals from hostile systems.

What is the justification for awarding this contract to Lockheed Martin on a sole-source basis?

The provided data explicitly states the contract type as 'NOT COMPETED,' indicating a sole-source award. While the specific justification is not detailed, common reasons for sole-source awards in defense procurement include the proprietary nature of the technology, the unique capabilities of a single contractor, urgent and compelling needs where competition is not feasible, or if the value is below the threshold requiring full and open competition and only one source is deemed capable. For a company like Lockheed Martin, it's plausible that the technology is highly specialized, patented, or deeply integrated into existing platforms, making them the only viable source.

How does the contract's fixed-price structure align with the sole-source award in terms of value for money?

A Firm Fixed Price (FFP) contract aims to provide cost certainty by establishing a set price regardless of the contractor's actual costs. When awarded competitively, FFP is generally considered a good value driver. However, in a sole-source context, the 'fixed price' is negotiated directly with the single bidder. While it caps the government's cost exposure, the absence of competition means this negotiated price might not reflect the lowest achievable market rate. The value for money hinges heavily on the government's negotiation skills and the accuracy of the cost estimates used to establish the fixed price, which are less transparent without competitive benchmarks.

What is the historical spending pattern for similar 'COUNTERMEASURE, RECEIVER' systems by the Department of Defense?

The provided data only details this specific contract from 2012-2015. To assess historical spending patterns for similar 'COUNTERMEASURE, RECEIVER' systems, one would need to analyze broader federal procurement databases (like FPDS or USASpending) for contracts awarded by the Department of Defense (DoD) and other agencies using relevant NAICS codes (e.g., 336413) or product service codes (PSCs) related to electronic warfare components, aircraft survivability equipment, or specific countermeasure systems. This would involve looking at contract values, award types (competed vs. sole-source), and awardees over multiple fiscal years to identify trends, major suppliers, and overall investment levels in this technology area.

What are the potential risks associated with a sole-source contract of this magnitude for specialized defense equipment?

The primary risks associated with a sole-source contract of this magnitude ($42.7 million) for specialized defense equipment include: 1) Inflated Pricing: Without competition, the contractor may not be incentivized to offer the lowest possible price, potentially leading to overpayment. 2) Lack of Innovation: The absence of competitive pressure can reduce the incentive for the contractor to innovate or improve the product/service beyond the contract's minimum requirements. 3) Contractor Lock-in: The government may become dependent on a single supplier, making future procurements difficult or expensive if the technology or system is unique. 4) Reduced Transparency: Sole-source justifications can sometimes obscure the true cost drivers and necessity of the procurement, making oversight more challenging.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

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: 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: $42,721,940

Exercised Options: $42,721,940

Current Obligation: $42,721,940

Contract Characteristics

Cost or Pricing Data: YES

Timeline