Lockheed Martin awarded $25.2M for AN/TPQ-53 radar improvements, a sole-source contract

Contract Overview

Contract Amount: $25,178,591 ($25.2M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2019-04-04

End Date: 2021-03-31

Contract Duration: 727 days

Daily Burn Rate: $34.6K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: AWARD FOR MULTI-MISSION RADAR IMPROVEMENTS TO THE AN/TPQ-53.

Place of Performance

Location: LIVERPOOL, ONONDAGA County, NEW YORK, 13088

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $25.2 million to LOCKHEED MARTIN CORPORATION for work described as: AWARD FOR MULTI-MISSION RADAR IMPROVEMENTS TO THE AN/TPQ-53. Key points: 1. Contract awarded to a single, established provider suggests potential for higher costs due to lack of competition. 2. The contract type (Cost Plus Fixed Fee) can incentivize cost overruns, requiring robust oversight. 3. Performance period of two years indicates a focused effort on specific system enhancements. 4. The award falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' industry, a critical defense sector. 5. No small business set-aside was utilized, potentially limiting opportunities for smaller specialized firms. 6. The contract's value is moderate within the context of major defense system upgrades.

Value Assessment

Rating: fair

The award of $25.2 million for radar improvements to the AN/TPQ-53 system is difficult to benchmark without detailed cost breakdowns and comparisons to similar sole-source upgrades. Given the sole-source nature, there is an inherent risk that the pricing may not reflect competitive market rates. The Cost Plus Fixed Fee (CPFF) contract type, while allowing for flexibility, can sometimes lead to higher final costs if not managed tightly, as the contractor is reimbursed for allowable costs plus a fixed fee. Further analysis of the contractor's historical performance and pricing on similar contracts would be necessary to provide a more definitive 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 unique capability is required, or when it is impractical or uneconomical to obtain competition. The lack of competition means that price discovery through market forces was absent, potentially leading to a higher price than if multiple bids had been considered. The justification for sole-source procurement would need to be thoroughly reviewed to understand the necessity of this approach.

Taxpayer Impact: For taxpayers, a sole-source award means there is no assurance that the government secured the best possible price. The absence of competitive pressure can result in funds being spent less efficiently compared to a competed contract.

Public Impact

The primary beneficiaries are the U.S. Army units that will utilize the enhanced AN/TPQ-53 radar systems for improved battlefield situational awareness and threat detection. The services delivered include upgrades and improvements to the multi-mission radar system, enhancing its capabilities and reliability. The geographic impact is primarily within military operational theaters where these radar systems are deployed. Workforce implications include specialized engineering, manufacturing, and technical support roles at Lockheed Martin and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing, potentially increasing costs for taxpayers.
Cost Plus Fixed Fee contract type carries inherent risk of cost overruns if not rigorously managed.
Lack of small business participation means fewer opportunities for smaller, specialized firms in this defense contract.
Limited public information on the specific technical improvements makes independent assessment of value difficult.

Positive Signals

Award to a prime contractor with extensive experience in radar systems suggests a high likelihood of successful technical execution.
The contract addresses critical defense capabilities, directly supporting national security objectives.
The fixed fee component of the CPFF contract provides some level of cost predictability for the government.

Sector Analysis

The contract falls within the Defense industry, specifically the segment focused on electronic warfare and radar systems manufacturing. This sector is characterized by high research and development costs, long product lifecycles, and significant government investment. The AN/TPQ-53 is a key component for counter-battery radar operations. Comparable spending in this area often involves multi-year development and sustainment contracts for advanced sensor technologies, with values ranging from tens to hundreds of millions of dollars depending on the scope of upgrades and system integration.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. This means that opportunities for small businesses to participate directly in this contract are limited. Larger prime contractors like Lockheed Martin often have established supply chains, and while they may engage small businesses, it's not a mandated focus for this specific award. The absence of set-asides in such contracts can impact the broader small business defense industrial base.

Oversight & Accountability

Oversight for this contract would primarily be conducted by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance with contract terms. The Cost Plus Fixed Fee structure necessitates close monitoring of allowable costs to prevent overspending. Transparency is limited by the sole-source nature and the proprietary information inherent in defense contracting. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

AN/TPQ-53 Radar System Sustainment
Counter-battery Radar Programs
Defense Electronic Systems Modernization
Tactical Radar Development

Risk Flags

Sole-source procurement lacks competitive pricing.
Cost Plus Fixed Fee contract type poses risk of cost overruns.
Limited public details on specific improvements hinder independent value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.2 million to LOCKHEED MARTIN CORPORATION. AWARD FOR MULTI-MISSION RADAR IMPROVEMENTS TO THE AN/TPQ-53.

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 Contract Management Agency).

What is the total obligated amount?

The obligated amount is $25.2 million.

What is the period of performance?

Start: 2019-04-04. End: 2021-03-31.

What is the track record of Lockheed Martin Corporation in delivering similar radar system upgrades?

Lockheed Martin Corporation has a long and extensive track record in developing, manufacturing, and upgrading complex defense systems, including radar technologies. They are a major prime contractor for numerous U.S. Department of Defense programs. For radar systems specifically, they have been involved in programs ranging from air and missile defense radars to tactical surveillance and targeting radars. Their experience with the AN/TPQ-53 family of systems likely includes prior sustainment and upgrade efforts. While specific performance metrics for past upgrades are often proprietary, their sustained position as a leading defense contractor suggests a general capability to meet technical requirements. However, the success of any specific upgrade hinges on detailed program management, technical execution, and the specific challenges encountered during the development and integration phases.

How does the $25.2 million award compare to historical spending on the AN/TPQ-53 program?

The provided data indicates an award of $25,178,591.43 for multi-mission radar improvements to the AN/TPQ-53. Without access to historical contract databases or specific program budget documents, a direct comparison to total historical spending on the AN/TPQ-53 program is challenging. However, this figure represents a specific delivery order under a larger contract vehicle, likely for a defined set of improvements or sustainment activities. The AN/TPQ-53 program itself has seen significant investment over its lifecycle for development, production, and fielding. This $25.2 million award appears to be a moderate-sized investment for specific enhancements or sustainment actions, rather than a full system procurement or major block upgrade, which could cost substantially more.

What are the primary risks associated with this sole-source Cost Plus Fixed Fee contract?

The primary risks associated with this sole-source Cost Plus Fixed Fee (CPFF) contract are twofold. Firstly, the sole-source nature eliminates competitive pressure, which can lead to inflated pricing as the government does not benefit from multiple bids to drive down costs. The contractor has less incentive to offer the most competitive price. Secondly, the CPFF structure, while providing flexibility for evolving requirements, carries an inherent risk of cost overruns. The contractor is reimbursed for all allowable costs plus a predetermined fixed fee. If costs escalate beyond initial estimates, the government bears the burden of these increased expenses, while the contractor's profit (the fixed fee) remains constant. Effective oversight is crucial to mitigate these risks by scrutinizing allowable costs and ensuring efficient performance.

What is the expected impact of these AN/TPQ-53 improvements on operational effectiveness?

The AN/TPQ-53 is a critical counter-battery radar system designed to detect and track enemy artillery, rocket, and mortar fire, thereby enabling friendly forces to respond rapidly. Improvements to this system are expected to enhance its operational effectiveness in several key areas. These could include increased detection range, improved accuracy in tracking and locating threats, reduced false alarm rates, enhanced mobility and deployment speed, and greater resilience against electronic warfare. Such enhancements directly contribute to improved battlefield situational awareness, better protection for friendly forces, and more effective counter-fire operations, ultimately increasing the overall survivability and mission success rates for units employing the system.

Are there any specific performance metrics or Key Performance Indicators (KPIs) associated with this contract?

The provided data does not explicitly list specific performance metrics or Key Performance Indicators (KPIs) for this contract. However, for a contract involving radar system improvements, typical KPIs would likely focus on technical performance aspects such as the accuracy of threat detection and location, the system's uptime and reliability, the time required for deployment and operation, and potentially measures related to its resistance to jamming or interference. Given the CPFF contract type, performance is also implicitly tied to the efficient management of costs within the scope of the fixed fee. The Defense Contract Management Agency (DCMA) would typically monitor adherence to technical specifications and delivery schedules.

What is the strategic importance of the AN/TPQ-53 radar system within the U.S. military's capabilities?

The AN/TPQ-53 is strategically vital as it provides a crucial counter-battery radar capability. Its primary function is to detect, identify, and track indirect fire threats such as mortars, artillery, and rockets. By providing near real-time targeting information, it enables friendly forces to quickly neutralize enemy firing positions, thereby protecting themselves and disrupting enemy operations. In modern warfare, where dispersed and mobile threats are common, the ability to rapidly locate and respond to indirect fire is paramount for maintaining operational tempo and ensuring the safety of personnel and assets. The AN/TPQ-53 represents a significant advancement in this capability, contributing directly to force protection and mission success in complex environments.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 497 ELECTRONICS PKWY BLDG 5, 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: $26,676,726

Exercised Options: $25,344,383

Current Obligation: $25,178,591

Actual Outlays: $37,443

Subaward Activity

Number of Subawards: 40

Total Subaward Amount: $7,334,010

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56KGY17D0005

IDV Type: IDC

Timeline