DoD awards $36.8M for Stinger Fuzes and Warhead Bodies to Lockheed Martin Sippican, Inc

Contract Overview

Contract Amount: $36,770,844 ($36.8M)

Contractor: Lockheed Martin Sippican, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-11-21

End Date: 2029-10-31

Contract Duration: 1,805 days

Daily Burn Rate: $20.4K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PROCUREMENT OF STINGER FUZES AND WARHEAD BODIES.

Place of Performance

Location: LIVERPOOL, ONONDAGA County, NEW YORK, 13088

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $36.8 million to LOCKHEED MARTIN SIPPICAN, INC. for work described as: PROCUREMENT OF STINGER FUZES AND WARHEAD BODIES. Key points: 1. Significant contract value for critical defense components. 2. Sole-source award to a single, established contractor. 3. Potential for higher costs due to lack of competition. 4. Ammunition manufacturing sector, vital for national security.

Value Assessment

Rating: fair

The contract value of $36.8M for Stinger fuzes and warhead bodies appears substantial. Without comparable contract data for similar components or previous procurements of these specific items, a precise pricing assessment is difficult. However, the lack of competition suggests potential for above-market pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was considered. This significantly limits price discovery and negotiation leverage for the government, potentially leading to higher costs compared to a competitive bidding process.

Taxpayer Impact: The sole-source nature of this award means taxpayers may be paying a premium for these critical defense components due to the absence of competitive pressure.

Public Impact

Ensures continued supply of essential components for Stinger missiles, a key anti-air weapon system. Supports the defense industrial base and a specific manufacturer's capabilities. Potential impact on readiness if pricing is not optimized.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price negotiation.
Lack of transparency in pricing due to no-bid contract.
Long contract duration (5 years) could lock in unfavorable pricing.

Positive Signals

Ensures supply of critical defense munitions.
Utilizes established contractor with known capabilities.

Sector Analysis

This procurement falls within the Ammunition (except Small Arms) Manufacturing sector, a critical part of the defense industrial base. Spending in this area is directly tied to national security needs and geopolitical factors, often involving specialized manufacturing processes and limited supplier pools.

Small Business Impact

The awardee, Lockheed Martin Sippican, Inc., is a large business. There is no indication in the provided data that small businesses were involved as subcontractors or partners in this specific procurement, suggesting limited direct small business participation.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure fair pricing and adherence to contract terms. The Department of the Army's contracting activity should monitor performance and costs diligently throughout the contract's duration.

Related Government Programs

Ammunition (except Small Arms) Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award
Lack of competition
Potential for inflated pricing
Long-term contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.8 million to LOCKHEED MARTIN SIPPICAN, INC.. PROCUREMENT OF STINGER FUZES AND WARHEAD BODIES.

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN SIPPICAN, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $36.8 million.

What is the period of performance?

Start: 2024-11-21. End: 2029-10-31.

What is the historical pricing trend for Stinger fuzes and warhead bodies, and how does this award compare?

Historical pricing data for these specific components is not provided. However, sole-source contracts inherently lack the competitive pressure that typically drives down prices. Without benchmark data or previous competitive bids for this item, it's difficult to definitively assess if this $36.8M award represents fair market value. Further analysis would require access to historical cost data or independent government cost estimates.

What are the risks associated with relying on a single supplier for critical defense components like Stinger parts?

Relying on a single supplier, as in this sole-source award, creates significant risks. These include potential supply chain disruptions if the sole provider faces production issues, limited leverage for price negotiation leading to higher costs, and a lack of incentive for the supplier to innovate or improve efficiency. It also makes the government vulnerable if the supplier's business circumstances change drastically.

How effective is the Department of Defense in ensuring competitive pricing for sole-source defense contracts?

The effectiveness varies. While DoD aims for competitive pricing, sole-source awards inherently reduce this effectiveness due to the absence of market competition. Agencies often rely on cost analysis, historical data, and negotiation expertise to mitigate price increases. However, the inherent structure of sole-source procurements means that achieving optimal price discovery and taxpayer value is more challenging than in competitive scenarios.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 497 ELECTRONICS PARKWAY, LIVERPOOL, NY, 13088

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: $36,770,844

Exercised Options: $36,770,844

Current Obligation: $36,770,844

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $7,896,702

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W15QKN21D0008

IDV Type: IDC

Timeline