DoD awards $30.3M contract for B2 Countermeasure Receivers to Lockheed Martin, citing sole-source justification

Contract Overview

Contract Amount: $30,373,260 ($30.4M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2023-09-25

End Date: 2027-10-29

Contract Duration: 1,495 days

Daily Burn Rate: $20.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: B2 COUNTERMEASURE RECEIVER

Place of Performance

Location: OWEGO, TIOGA County, NEW YORK, 13827

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $30.4 million to LOCKHEED MARTIN CORPORATION for work described as: B2 COUNTERMEASURE RECEIVER Key points: 1. Contract value of $30.3M for B2 Countermeasure Receivers. 2. Sole-source award to Lockheed Martin Corporation. 3. Contract duration extends to October 2027. 4. Firm Fixed Price contract type. 5. Awarded by the Defense Logistics Agency. 6. No small business set-aside indicated.

Value Assessment

Rating: questionable

The contract value of $30.3M for B2 Countermeasure Receivers appears significant, but without comparable contract data or detailed cost breakdowns, a precise value-for-money assessment is difficult. The sole-source nature of the award raises concerns about potential overpricing compared to a competitive environment. Benchmarking against similar specialized defense components would be necessary to determine if the pricing is fair and reasonable. The firm fixed price structure offers cost certainty but may not incentivize the contractor to reduce costs if the initial price was not aggressively negotiated.

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 considered. The justification for a sole-source award typically involves unique capabilities, proprietary technology, or a lack of viable alternatives. The absence of competition means that the government did not benefit from the price discovery and innovation that typically arises from multiple bidders vying for a contract. This can lead to higher prices and potentially less favorable terms.

Taxpayer Impact: Taxpayers may be paying a premium due to the lack of competitive bidding. Without competition, there is less pressure on the contractor to offer the lowest possible price, potentially leading to less efficient use of public funds.

Public Impact

The primary beneficiaries are the U.S. Air Force operations utilizing the B2 bomber fleet, ensuring the continued functionality of critical electronic warfare systems. The contract delivers essential B2 Countermeasure Receiver components, vital for the aircraft's survivability and mission effectiveness. The geographic impact is primarily within the defense supply chain, with potential implications for specialized manufacturing facilities. Workforce implications may include specialized engineering, manufacturing, and quality assurance roles within Lockheed Martin and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential for cost savings.
Lack of transparency in the justification for sole-source procurement.
Long contract duration could lead to price escalation if not managed carefully.
Reliance on a single contractor for critical defense components poses supply chain risk.

Positive Signals

Firm Fixed Price contract provides cost certainty for the government.
Award to an established defense contractor with known capabilities.
Contract supports critical national defense assets (B2 bomber).

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on specialized electronic warfare components. The market for such highly specialized parts is often dominated by a few large, established defense contractors due to high barriers to entry, including intellectual property, R&D investment, and stringent security requirements. Comparable spending benchmarks would likely be found within other sole-source or limited-competition procurements for advanced military avionics and electronic systems.

Small Business Impact

The contract data indicates that this was not a small business set-aside, and there is no indication of a subcontracting plan specifically targeting small businesses. This suggests that the primary awardee, Lockheed Martin, is expected to fulfill the contract requirements, potentially utilizing its own facilities or larger subcontractors. The absence of a small business focus in this sole-source award means limited direct benefit to the small business ecosystem for this specific procurement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), responsible for ensuring compliance with contract terms and financial accountability. The Defense Logistics Agency (DLA) contracting officers will oversee performance and modifications. Transparency is limited due to the sole-source nature, but contract awards are generally reported in federal procurement databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

B2 Bomber Sustainment Programs
Electronic Warfare Systems Procurement
Aerospace Component Manufacturing
Defense Logistics Agency Contracts
Lockheed Martin Defense Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Supply chain dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.4 million to LOCKHEED MARTIN CORPORATION. B2 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 Logistics Agency).

What is the total obligated amount?

The obligated amount is $30.4 million.

What is the period of performance?

Start: 2023-09-25. End: 2027-10-29.

What is the specific justification provided by the Defense Logistics Agency for awarding this contract on a sole-source basis to Lockheed Martin Corporation?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source procurements are justified under specific circumstances outlined in the Federal Acquisition Regulation (FAR), such as when only one responsible source can provide the required supplies or services, or when there is a compelling urgency. For specialized defense components like B2 Countermeasure Receivers, the justification often relates to proprietary technology, unique manufacturing capabilities, or the need to maintain compatibility with existing, highly complex weapon systems where alternatives are not feasible or would incur unacceptable costs or delays. A detailed review of the contract file or agency procurement justifications would be required to ascertain the precise rationale.

How does the $30.3 million contract value compare to historical spending on B2 Countermeasure Receivers or similar electronic warfare components?

Without access to historical spending data specifically for B2 Countermeasure Receivers or detailed cost breakdowns within this award, a direct comparison is challenging. The $30.3 million figure represents the total anticipated value over the contract's duration (approximately 4 years). To benchmark this, one would need to analyze past contracts for the same or similar components, considering inflation, technological advancements, and quantity variations. If this is a sole-source award, it is inherently difficult to compare pricing against a competitive market. Analysis of similar sole-source awards for specialized defense electronics could provide a broader context, but a precise 'fairness' determination requires more granular cost data or competitive bidding history.

What are the potential risks associated with a sole-source contract for critical defense components like the B2 Countermeasure Receiver?

Sole-source contracts for critical defense components carry several inherent risks. Firstly, the lack of competition can lead to higher prices than might be achieved in a competitive bidding process, potentially resulting in less value for taxpayer money. Secondly, it can reduce the incentive for the sole contractor to innovate or improve efficiency, as there is no direct competitive pressure. Thirdly, it creates a dependency on a single supplier, which can pose supply chain risks; any disruption to that supplier's operations (e.g., financial instability, production issues, geopolitical factors) could directly impact the availability of critical components for national defense. Finally, the absence of competitive proposals can limit transparency and make it harder for the government to independently verify the reasonableness of costs.

What is Lockheed Martin Corporation's track record in supplying electronic warfare components to the Department of Defense?

Lockheed Martin Corporation is a major defense contractor with extensive experience in supplying a wide array of defense systems, including sophisticated electronic warfare (EW) components. They are known for their work on advanced aircraft, missiles, and radar systems, many of which incorporate complex EW suites. Their track record includes numerous contracts with the Department of Defense across various branches. While specific performance metrics for this particular contract are not yet available due to its recent award, Lockheed Martin's overall history suggests a capability to produce and deliver complex defense hardware. However, as with any large contractor, past performance reviews and specific contract histories should be consulted for a comprehensive assessment.

What is the significance of the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' North American Industry Classification System (NAICS) code (336413) in relation to this contract?

The NAICS code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' indicates that the primary business activity of the contractor or the nature of the product being procured falls under the manufacturing of parts and auxiliary equipment for aircraft, which are not elsewhere classified. This code is appropriate for components like the B2 Countermeasure Receiver, as it is a specialized piece of equipment integral to the operation and support of an aircraft (the B2 bomber). This classification helps in understanding the industrial sector the contract belongs to and allows for comparisons with other companies and contracts within the same manufacturing sub-sector, although the highly specialized nature of defense components often means that direct comparisons are limited.

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

Solicitation ID: SPRTA123R0091

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: $30,373,260

Exercised Options: $30,373,260

Current Obligation: $30,373,260

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline