DoD awards $108.5M contract for modernized radar frequency interferometer to Lockheed Martin Corporation

Contract Overview

Contract Amount: $108,549,527 ($108.5M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2015-12-09

End Date: 2025-08-15

Contract Duration: 3,537 days

Daily Burn Rate: $30.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: MODERNIZED RADAR FREQUENCY INTERFEROMETER

Place of Performance

Location: OWEGO, TIOGA County, NEW YORK, 13827

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $108.5 million to LOCKHEED MARTIN CORPORATION for work described as: MODERNIZED RADAR FREQUENCY INTERFEROMETER Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns and lack of competitive pressure. 2. Long contract duration of over 9 years suggests a significant, ongoing need for the specialized equipment. 3. The fixed-price incentive contract type aims to balance cost control with performance incentives. 4. The procurement falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code, indicating a specialized niche. 5. The contract's value, while substantial, needs to be benchmarked against similar complex defense systems to assess value for money. 6. Potential for cost growth exists within the incentive structure, requiring close monitoring of performance metrics.

Value Assessment

Rating: fair

The contract value of $108.5 million over approximately 9 years represents a significant investment. Without direct comparable contracts for this specific modernized radar frequency interferometer, a precise value-for-money assessment is challenging. However, the sole-source nature of the award suggests limited opportunity for competitive price discovery, which could lead to less favorable pricing than a competed contract. Benchmarking against the cost of similar advanced electronic warfare or radar systems would be necessary for a more robust evaluation.

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 a unique capability is required, or when only one source possesses the necessary expertise or technology. The lack of competition means that taxpayers do not benefit from the price reductions typically achieved through a competitive bidding process.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible price, potentially leading to higher costs for taxpayers. It also reduces transparency in the procurement process.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Department of the Army, which will receive the modernized radar frequency interferometer. This equipment is crucial for enhancing radar capabilities, likely supporting intelligence, surveillance, and reconnaissance (ISR) missions. The contract supports advanced manufacturing and engineering roles within Lockheed Martin Corporation, contributing to the high-tech defense industrial base. The geographic impact is primarily within the United States, where the contractor will perform the work, and potentially at military installations where the equipment will be deployed.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially impacting cost-effectiveness.
Long contract duration increases exposure to potential cost overruns or scope creep.
Fixed-price incentive contracts can be complex to manage and may lead to disputes if performance targets are not clearly met.
Reliance on a single contractor for a critical defense system raises concerns about long-term supply chain resilience.

Positive Signals

Award to a major defense contractor like Lockheed Martin suggests access to advanced technology and manufacturing capabilities.
The fixed-price incentive structure, if managed effectively, can align contractor and government interests towards achieving performance goals.
Modernization of radar frequency interferometry indicates an investment in critical national security capabilities.

Sector Analysis

The defense electronics sector is characterized by high barriers to entry, significant R&D investment, and long product development cycles. Contracts for advanced systems like radar frequency interferometers are typically awarded to large, established defense contractors. The market size for such specialized components is difficult to quantify precisely but is integral to the broader aerospace and defense industry, which represents billions in annual federal spending. This contract fits within the segment focused on electronic warfare and signal intelligence systems.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The award to a large prime contractor like Lockheed Martin suggests that the bulk of the work will be performed internally or subcontracted to other large defense suppliers. This limits direct opportunities for small businesses to participate in this specific contract, although they may be involved further down the supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices. Specific oversight mechanisms would include contract performance reviews, audits, and potentially the involvement of the Defense Contract Audit Agency (DCAA) and the Inspector General's office to ensure compliance with terms and conditions, cost accountability, and proper performance. Transparency is generally limited for sole-source defense contracts, but reporting requirements on progress and expenditures would be in place.

Related Government Programs

Advanced Radar Systems
Electronic Warfare Systems
Intelligence, Surveillance, and Reconnaissance (ISR) Equipment
Department of the Army Procurement
Lockheed Martin Defense Contracts

Risk Flags

Sole-source award
Long contract duration
Potential for cost growth in incentive contracts
Reliance on a single supplier for critical technology

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $108.5 million to LOCKHEED MARTIN CORPORATION. MODERNIZED RADAR FREQUENCY INTERFEROMETER

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 Army).

What is the total obligated amount?

The obligated amount is $108.5 million.

What is the period of performance?

Start: 2015-12-09. End: 2025-08-15.

What is the historical spending trend for modernized radar frequency interferometers by the Department of Defense?

Historical spending data for 'modernized radar frequency interferometers' as a distinct category is not readily available in public databases. Procurement data is often aggregated under broader categories such as 'radar systems,' 'electronic warfare equipment,' or specific weapon system components. However, federal spending on defense electronics and related systems has consistently been in the tens of billions of dollars annually. The Department of Defense is the primary purchaser of such advanced technologies. Analyzing trends within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code (336413) might reveal broader patterns in component manufacturing, but specific spending on this particular type of interferometer would require deeper analysis of individual contract awards and program budgets, which are often classified or highly specific.

How does the per-unit cost of this interferometer compare to similar systems, if available?

A direct per-unit cost comparison for this specific 'modernized radar frequency interferometer' is not feasible with the provided data. The contract value is a total award amount over a long period, and the number of units to be delivered is not specified. Furthermore, the unique and advanced nature of such specialized defense technology often means there are few, if any, directly comparable commercial or military systems available for benchmarking. Without knowing the exact specifications, capabilities, and quantities, any cost comparison would be speculative. Benchmarking would require access to detailed technical specifications and pricing data from other similar, high-specification radar or electronic warfare components, which is typically proprietary or classified.

What are the key performance indicators (KPIs) tied to the incentive structure of this fixed-price incentive contract?

The specific Key Performance Indicators (KPIs) tied to the incentive structure of this fixed-price incentive contract are not detailed in the provided summary data. Typically, for advanced defense systems like a radar frequency interferometer, KPIs would relate to performance metrics such as signal detection range, accuracy, processing speed, reliability (Mean Time Between Failures - MTBF), environmental resistance (temperature, vibration), and integration capabilities with existing platforms. The incentive portion of the contract would likely reward the contractor for exceeding baseline performance targets or achieving them under specific cost constraints, while penalties might apply for failing to meet minimum requirements. Detailed information on these KPIs would be found in the contract's Statement of Work (SOW) and performance specifications.

What is Lockheed Martin Corporation's track record with similar sole-source defense contracts?

Lockheed Martin Corporation, as one of the largest defense contractors globally, has a long history of receiving sole-source contracts from the U.S. Department of Defense across various platforms and systems, including radar, aerospace, and missile technology. These awards are often justified by the company's established expertise, proprietary technology, and existing production infrastructure. While sole-source awards can raise concerns about competition, they are common for highly specialized or technologically advanced defense procurements where few or no other companies possess the required capabilities. Analyzing Lockheed Martin's broader contract portfolio reveals numerous large-value, sole-source awards, indicating a pattern of being selected for critical defense needs where unique capabilities are paramount.

What is the potential risk of cost escalation given the contract's duration and sole-source nature?

The potential for cost escalation on this contract is moderate to high, primarily due to its long duration (over 9 years) and sole-source award. Sole-source procurements inherently lack the competitive pressure that drives down prices. Over an extended period, factors such as inflation, changes in material costs, unforeseen technical challenges, and potential scope adjustments can lead to cost increases. While the fixed-price incentive structure aims to cap costs and incentivize efficiency, the absence of competition means the baseline price might already be higher than in a competitive scenario. Robust government oversight, stringent change control processes, and regular performance reviews are critical to mitigating these risks.

How does this contract contribute to the modernization of the Army's electronic warfare or radar capabilities?

This contract directly contributes to the modernization of the Army's capabilities by providing an advanced 'modernized radar frequency interferometer.' Such technology is fundamental to enhancing situational awareness, electronic warfare (EW) operations, intelligence gathering, and target detection. Modern interferometers offer improved accuracy, wider frequency coverage, and better signal processing compared to older systems, enabling the Army to counter evolving threats more effectively. By investing in this technology, the Army aims to maintain a technological edge in contested electromagnetic spectrum environments, supporting its overall mission readiness and effectiveness on the modern battlefield.

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: FIXED PRICE INCENTIVE (L)

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: $108,549,527

Exercised Options: $108,549,527

Current Obligation: $108,549,527

Subaward Activity

Number of Subawards: 81

Total Subaward Amount: $37,850,168

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline