Lockheed Martin awarded $74.6M for AN/TPQ-53 radar spare parts, a sole-source contract

Contract Overview

Contract Amount: $74,636,459 ($74.6M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2019-12-06

End Date: 2022-06-09

Contract Duration: 916 days

Daily Burn Rate: $81.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THIS DELIVERY ORDER PROCURES SPARE PARTS IN SUPPORT OF THE AN/TPQ-53 RADAR SYSTEM.

Place of Performance

Location: LIVERPOOL, ONONDAGA County, NEW YORK, 13088

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $74.6 million to LOCKHEED MARTIN CORPORATION for work described as: THIS DELIVERY ORDER PROCURES SPARE PARTS IN SUPPORT OF THE AN/TPQ-53 RADAR SYSTEM. Key points: 1. Contract awarded to a single vendor, raising questions about price competitiveness. 2. Focus on spare parts suggests ongoing operational needs for the AN/TPQ-53 system. 3. Long contract duration of over 900 days indicates sustained support requirements. 4. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 5. No small business set-aside was utilized, potentially limiting broader industry participation.

Value Assessment

Rating: fair

This contract for spare parts for the AN/TPQ-53 radar system was awarded sole-source to Lockheed Martin Corporation for approximately $74.6 million. Without competitive bidding, it is difficult to benchmark the value for money. The contract's duration of 916 days suggests a significant quantity of parts or long-term support. The firm-fixed-price structure is generally favorable for the government in managing cost certainty, but the lack of competition prevents a direct comparison to market rates or other potential suppliers.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Lockheed Martin Corporation. This approach is typically used when a specific vendor possesses unique capabilities or intellectual property essential for the product. The lack of competition means there were no other bidders, and the government did not benefit from a price discovery process driven by multiple offers. This can lead to higher prices than might be achieved in a competitive environment.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without alternative quotes, it's harder to ensure the most cost-effective solution was secured.

Public Impact

The primary beneficiaries are the U.S. Army units relying on the AN/TPQ-53 radar system for their operational missions. The contract delivers essential spare parts, ensuring the continued functionality and readiness of critical surveillance equipment. The geographic impact is primarily within the United States, where the Department of Defense operates and maintains its radar systems. Workforce implications include the potential for continued employment at Lockheed Martin and its supply chain partners involved in manufacturing and delivering these parts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of transparency in the procurement process due to non-competition.
Reliance on a single contractor for critical spare parts could create supply chain vulnerabilities.
No small business participation noted, potentially missing opportunities to support smaller enterprises.

Positive Signals

Firm-fixed-price contract shifts cost overrun risk to the contractor.
Ensures availability of critical spare parts for an important defense system.
Long-term contract provides stability for both the government and the contractor.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on the manufacturing and support of advanced radar systems. The market for such specialized defense electronics is often dominated by a few large prime contractors like Lockheed Martin, who possess the necessary expertise and security clearances. Spending in this area is driven by national security requirements and the need to maintain technological superiority. Comparable spending benchmarks are difficult to establish without competitive data, but investments in radar systems and their sustainment are a significant portion of the defense budget.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to involve significant subcontracting opportunities for them based on the provided data. The award to a large prime contractor like Lockheed Martin suggests that the primary manufacturing and fulfillment will occur within their own facilities or their established large-tier supply chains. This approach may limit the direct economic benefit to the small business ecosystem in this specific procurement.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are embedded within the firm-fixed-price contract terms, requiring Lockheed Martin to deliver specified parts within the agreed-upon schedule and quality standards. Transparency is limited due to the sole-source nature of the award, but contract awards are generally reported in federal procurement databases.

Related Government Programs

AN/TPQ-53 Radar System Procurement
Defense Radar Systems Sustainment
Military Electronics Manufacturing
Department of Defense Spare Parts Logistics

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $74.6 million to LOCKHEED MARTIN CORPORATION. THIS DELIVERY ORDER PROCURES SPARE PARTS IN SUPPORT OF THE AN/TPQ-53 RADAR SYSTEM.

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 $74.6 million.

What is the period of performance?

Start: 2019-12-06. End: 2022-06-09.

What is the historical spending trend for spare parts related to the AN/TPQ-53 radar system?

Analyzing historical spending for AN/TPQ-53 spare parts requires access to broader contract databases beyond this single delivery order. However, the fact that a significant delivery order was issued in late 2019 for parts through mid-2022 suggests a consistent need for sustainment. Without prior contract data, it's impossible to determine if this $74.6 million award represents an increase, decrease, or stable level of spending compared to previous periods. Factors influencing spending trends could include system age, operational tempo, obsolescence of components, and upgrades or modifications to the radar system itself.

What are the specific types of spare parts being procured under this contract?

The provided data indicates that this delivery order procures 'spare parts in support of the AN/TPQ-53 radar system.' However, it does not specify the exact nature or quantity of these parts. Typically, such procurements would include a range of components, from electronic modules and sensors to mechanical parts and power supplies, essential for maintaining the operational readiness of the radar. A detailed breakdown would likely be found in the contract's statement of work or associated exhibits, which are not publicly available in this summary.

What is Lockheed Martin's track record with the AN/TPQ-53 radar system?

Lockheed Martin Corporation is the prime contractor responsible for the AN/TPQ-53 radar system. Their track record with this system would encompass its development, production, and sustainment. As the original equipment manufacturer, they possess the inherent knowledge and capability to produce and supply necessary spare parts. Historical performance data, including delivery timeliness, quality, and responsiveness to support requests, would be crucial for a comprehensive assessment, but is not detailed in the provided summary.

How does the $74.6 million value compare to other similar radar system sustainment contracts?

Benchmarking this $74.6 million contract against similar radar system sustainment contracts is challenging without specific details on the quantity and type of parts procured, and the contract duration. However, for complex defense systems, sustainment costs can often rival or exceed initial procurement costs over the system's lifecycle. Given the sole-source nature, direct comparison is difficult. Contracts for sustainment of major defense platforms can range from tens to hundreds of millions of dollars annually, depending on the system's complexity, age, and operational tempo.

What are the potential risks associated with a sole-source award for critical spare parts?

The primary risk of a sole-source award for critical spare parts is the potential for inflated pricing due to the lack of competitive pressure. This can lead to taxpayers bearing higher costs than necessary. Additionally, it can reduce the incentive for the sole provider to innovate or improve efficiency. There's also a risk of vendor lock-in, where the government becomes overly dependent on a single supplier, potentially facing supply disruptions or unfavorable terms in the future. Ensuring robust oversight and negotiation is critical in such scenarios.

What is the operational significance of the AN/TPQ-53 radar system?

The AN/TPQ-53 radar system is a counter-battery radar used by the U.S. military. Its primary function is to detect and track enemy artillery, rocket, and mortar fire, providing early warning and enabling friendly forces to respond. It plays a crucial role in protecting ground troops by identifying the origin of indirect fire. Ensuring the operational readiness of these systems through the provision of spare parts is vital for mission success and soldier safety in deployed 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: 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: 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: $74,636,459

Exercised Options: $74,636,459

Current Obligation: $74,636,459

Subaward Activity

Number of Subawards: 136

Total Subaward Amount: $197,233,356

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