Lockheed Martin awarded $17.5M for Apache helicopter night vision sensor refurbishment, a sole-source contract

Contract Overview

Contract Amount: $17,511,053 ($17.5M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2019-06-01

End Date: 2022-01-31

Contract Duration: 975 days

Daily Burn Rate: $18.0K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MODERNIZED TARGET ACQUISITION DESIGNATION SIGHT/PILOT NIGHT VISION SENSOR (M-TADS/PNVS) SYSTEMS, SUBCOMPONENT PRODUCTION, AND TECHNICAL SERVICES IN SUPPORT OF APACHE ATTACK HELICOPTER. THIS TASK ORDER PROCURES REFURBISHMENT SERVICES.

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32819

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $17.5 million to LOCKHEED MARTIN CORPORATION for work described as: MODERNIZED TARGET ACQUISITION DESIGNATION SIGHT/PILOT NIGHT VISION SENSOR (M-TADS/PNVS) SYSTEMS, SUBCOMPONENT PRODUCTION, AND TECHNICAL SERVICES IN SUPPORT OF APACHE ATTACK HELICOPTER. THIS TASK ORDER PROCURES REFURBISHMENT SERVICES. Key points: 1. Contract focuses on essential refurbishment of critical night vision systems for Apache attack helicopters. 2. Sole-source award raises questions about potential price overruns and lack of competitive pressure. 3. Long-term support for aging aircraft platforms highlights ongoing defense sustainment needs. 4. Performance period spans nearly three years, indicating a significant sustainment requirement. 5. The contract falls under aircraft manufacturing, a sector with high barriers to entry. 6. This award represents a small fraction of overall Apache program spending.

Value Assessment

Rating: fair

Benchmarking refurbishment services for specialized military equipment is challenging due to unique technical requirements and limited market availability. The $17.5 million value for a nearly three-year refurbishment task order for night vision sensors on Apache helicopters appears within a reasonable range for such complex, sole-source military sustainment. However, without competitive bids, it's difficult to definitively assess if this represents the best possible value for taxpayers. Comparisons to similar sole-source refurbishment contracts for other aircraft systems would be necessary for a more robust value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor, Lockheed Martin Corporation, was solicited. This approach is typically used when a specific capability or product is only available from a single source, or in this case, likely due to the proprietary nature of the M-TADS/PNVS systems and the need for specialized expertise held by the original manufacturer. The lack of competition means there was no opportunity for other companies to bid, potentially limiting price discovery and the incentive for the incumbent to offer the most competitive pricing.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This necessitates strong oversight to ensure fair pricing and prevent potential overspending.

Public Impact

The U.S. Army benefits from the continued operational readiness of its Apache attack helicopter fleet. Refurbishment of M-TADS/PNVS systems ensures pilots maintain critical night vision capabilities. The contract supports specialized technical services, potentially maintaining skilled jobs within the defense industrial base. Geographic impact is primarily within Florida, where the refurbishment services are likely performed. This sustains the effectiveness of a key component of the Army's aviation combat power.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source nature limits competitive pricing and may result in higher costs.
Reliance on a single contractor for critical component refurbishment poses a supply chain risk.
Lack of transparency in pricing due to non-competitive award.
Potential for scope creep or cost overruns without competitive checks.

Positive Signals

Ensures continued availability of critical night vision systems for a vital military platform.
Leverages specialized expertise of the original equipment manufacturer for complex refurbishment.
Supports the sustainment of existing defense assets, potentially extending their service life.
Provides necessary technical services to maintain aircraft readiness.

Sector Analysis

The defense aerospace sector is characterized by high research and development costs, long product lifecycles, and significant government procurement. Contracts for aircraft components and sustainment, like this one for Apache helicopter systems, are common. The market is often dominated by a few large prime contractors who possess specialized knowledge and manufacturing capabilities. Benchmarking spending in this area requires comparing against similar sole-source sustainment contracts for other major weapon systems, which often involve substantial, long-term investments.

Small Business Impact

This contract was not competed and does not appear to have specific small business set-aside provisions. Lockheed Martin, the prime contractor, is a large business. While there might be subcontracting opportunities for small businesses within the refurbishment process, the primary award does not directly benefit small businesses through a set-aside. The impact on the broader small business ecosystem is likely indirect, depending on Lockheed Martin's subcontracting choices.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. As a sole-source award, scrutiny on pricing and justification for the non-competitive nature is crucial. Transparency is limited due to the lack of a competitive bidding process. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse were suspected or reported.

Related Government Programs

Apache Attack Helicopter Program
Avionics and Electronic Warfare Systems
Night Vision and Targeting Systems
Defense Logistics and Sustainment Services
Aircraft Component Manufacturing

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Reliance on single supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.5 million to LOCKHEED MARTIN CORPORATION. MODERNIZED TARGET ACQUISITION DESIGNATION SIGHT/PILOT NIGHT VISION SENSOR (M-TADS/PNVS) SYSTEMS, SUBCOMPONENT PRODUCTION, AND TECHNICAL SERVICES IN SUPPORT OF APACHE ATTACK HELICOPTER. THIS TASK ORDER PROCURES REFURBISHMENT SERVICES.

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 $17.5 million.

What is the period of performance?

Start: 2019-06-01. End: 2022-01-31.

What is Lockheed Martin Corporation's track record with the M-TADS/PNVS systems and Apache helicopter support?

Lockheed Martin Corporation is the original manufacturer of the M-TADS/PNVS systems, integral to the Apache attack helicopter's targeting and navigation capabilities. They have a long-standing and extensive track record supporting these systems throughout the Apache's operational life. This includes initial production, upgrades, and ongoing sustainment, maintenance, and refurbishment services. Their deep institutional knowledge and proprietary data related to the M-TADS/PNVS make them the sole entity capable of providing specialized refurbishment and technical services, as evidenced by this sole-source award. Their performance history with the U.S. Army on the Apache platform is extensive, encompassing decades of production and support contracts.

How does the $17.5 million value compare to similar refurbishment contracts for military aircraft components?

Direct comparisons for specialized military component refurbishment are difficult due to the unique nature of each system and the varying scope of work (e.g., repair vs. full overhaul vs. modernization). However, for complex avionics and targeting systems on major platforms like attack helicopters, refurbishment contracts in the multi-million dollar range over several years are not uncommon. The $17.5 million for nearly three years of work on the M-TADS/PNVS suggests a significant undertaking, likely involving intricate diagnostics, component replacement, recalibration, and testing. Without access to proprietary data or specific benchmarks for similar sole-source sustainment efforts, it's challenging to definitively label this value as high or low, but it aligns with the expected cost profile for specialized defense sustainment.

What are the primary risks associated with this sole-source contract for the U.S. Army?

The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competitive bidding. Without competing offers, Lockheed Martin may have less incentive to minimize costs, potentially leading to a higher overall expenditure for the refurbishment services. Another significant risk is vendor lock-in; the Army becomes dependent on Lockheed Martin for critical sustainment, which could limit future flexibility in sourcing or negotiating support. Furthermore, a sole-source award can reduce transparency in the pricing structure, making it harder for the government to verify cost reasonableness. Finally, any disruption in Lockheed Martin's ability to provide these services could directly impact the operational readiness of the Apache fleet.

How effective is the M-TADS/PNVS system, and what is the impact of its refurbishment on Apache helicopter program effectiveness?

The Modernized Target Acquisition Designation Sight/Pilot Night Vision Sensor (M-TADS/PNVS) system is a critical component of the Apache attack helicopter, providing pilots with advanced day and night targeting, navigation, and pilotage capabilities. Its effectiveness is paramount for the helicopter's mission success in complex combat environments. Refurbishing these systems ensures they operate at peak performance, maintaining their accuracy, reliability, and resolution. This directly translates to enhanced situational awareness for pilots, improved target identification and engagement, and overall increased mission effectiveness and survivability for the Apache fleet. Failure to maintain or refurbish these systems could degrade the helicopter's combat capabilities.

What are the historical spending patterns for M-TADS/PNVS sustainment and refurbishment by the U.S. Army?

Historical spending on M-TADS/PNVS sustainment and refurbishment by the U.S. Army has been substantial, reflecting the system's critical role and the long operational life of the Apache helicopter. While specific figures for refurbishment alone are not publicly itemized across all years, the Army has consistently awarded contracts to Lockheed Martin for production, upgrades, and sustainment of these systems. These contracts often span multiple years and involve significant dollar values, running into the hundreds of millions or even billions over the life cycle of the Apache program. The current $17.5 million task order represents a specific instance of refurbishment within this broader, ongoing sustainment effort, indicating a continuous need for maintenance and repair of these complex systems.

What is the justification for awarding this contract as sole-source rather than through full and open competition?

The justification for awarding this contract as sole-source likely stems from the proprietary nature of the M-TADS/PNVS technology and Lockheed Martin's exclusive role as the original equipment manufacturer (OEM). Refurbishing such specialized and integrated systems typically requires unique technical data, tooling, test equipment, and highly trained personnel that only the OEM possesses. The U.S. Army likely determined that Lockheed Martin is the only responsible source capable of performing the required refurbishment services to meet the government's needs without substantial duplication of cost or unacceptable delays. This is a common justification for sole-source awards in the defense sector for complex weapon systems sustainment.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: ENGINE ACCESSORIES

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: 5600 W SAND LAKE RD # MP-265, ORLANDO, FL, 32819

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: $17,511,053

Exercised Options: $17,511,053

Current Obligation: $17,511,053

Subaward Activity

Number of Subawards: 27

Total Subaward Amount: $2,387,951

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W52P1J17D0043

IDV Type: IDC

Timeline