DoD Awards $44.4M Minimum Guarantee Delivery Order to Lockheed Martin for Electronic Components
Contract Overview
Contract Amount: $44,442,408 ($44.4M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2023-12-22
End Date: 2027-03-01
Contract Duration: 1,165 days
Daily Burn Rate: $38.1K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: MINIMUM GUARANTEE DELIVERY ORDER
Place of Performance
Location: ORLANDO, ORANGE County, FLORIDA, 32819
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $44.4 million to LOCKHEED MARTIN CORPORATION for work described as: MINIMUM GUARANTEE DELIVERY ORDER Key points: 1. Significant contract value highlights reliance on a single supplier for critical components. 2. Sole-source award raises concerns about potential overpricing and lack of competitive pressure. 3. Long duration suggests a sustained need, but limited competition could inflate costs. 4. Focus on 'Other Electronic Component Manufacturing' indicates a specialized, potentially high-cost sector.
Value Assessment
Rating: questionable
The $44.4 million minimum guarantee for a delivery order is substantial. Without competitive bidding, it's difficult to assess if this price is aligned with market rates for similar electronic components.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This method limits price discovery and may lead to higher costs for taxpayers as there is no competitive pressure to drive down prices.
Taxpayer Impact: The lack of competition in this sole-source award could result in taxpayers paying a premium for these electronic components.
Public Impact
Taxpayers may be overpaying for essential electronic components due to the absence of competition. The Department of the Army's reliance on a single vendor for a long period raises questions about supply chain resilience. Future procurements in this category may continue to be non-competitive if not actively managed.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for overpricing
- Long contract duration
Positive Signals
- Clear minimum guarantee established
- Specific end date for delivery
Sector Analysis
This award falls under 'Other Electronic Component Manufacturing,' a sector often characterized by specialized production and potentially high research and development costs. Benchmarking spending in this niche area is challenging without competitive data.
Small Business Impact
The data indicates this contract was awarded to Lockheed Martin Corporation, a large prime contractor. There is no information provided to suggest any subcontracting opportunities for small businesses on this specific delivery order.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and prevent potential waste. Accountability will be key in verifying the necessity and cost-effectiveness of this procurement.
Related Government Programs
- Other Electronic Component Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award lacks competitive pricing pressure.
- Potential for overpayment due to lack of competition.
- Long contract duration increases exposure to price changes.
- Limited visibility into the specific components and their market value.
- Risk of supply chain disruption if the sole provider encounters issues.
Tags
other-electronic-component-manufacturing, department-of-defense, fl, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $44.4 million to LOCKHEED MARTIN CORPORATION. MINIMUM GUARANTEE DELIVERY ORDER
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 $44.4 million.
What is the period of performance?
Start: 2023-12-22. End: 2027-03-01.
What is the justification for awarding this contract on a sole-source basis, and what steps are being taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities or proprietary technology. Agencies must conduct a thorough price analysis, comparing proposed costs to historical prices, commercial prices, or independent government estimates. Regular reviews and audits are crucial to maintain accountability and ensure taxpayer funds are used efficiently, especially when competition is absent.
What are the risks associated with relying on a single supplier for critical electronic components over an extended period?
Sole-source reliance increases vulnerability to supply chain disruptions, price gouging, and technological obsolescence. If the supplier faces production issues, quality control problems, or decides to discontinue the product, the government could face significant delays and increased costs to find an alternative. This lack of competition also stifles innovation and prevents the government from benefiting from potentially lower prices offered by other manufacturers.
How does the government plan to assess the value and effectiveness of this contract, given the absence of competitive benchmarks?
Value and effectiveness will be assessed through rigorous contract performance monitoring, including delivery schedules, quality assurance, and adherence to specifications. Price reasonableness will be evaluated using cost analysis techniques, comparing actual costs to independent estimates or commercial data where available. The agency should also explore opportunities for future competition or negotiate better terms if performance or market conditions change.
Industry Classification
NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Other Electronic Component Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
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, 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: $44,442,408
Exercised Options: $44,442,408
Current Obligation: $44,442,408
Subaward Activity
Number of Subawards: 25
Total Subaward Amount: $8,366,503
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W56HZV24D0016
IDV Type: IDC
Timeline
Start Date: 2023-12-22
Current End Date: 2027-03-01
Potential End Date: 2027-03-01 12:03:00
Last Modified: 2025-09-23
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