DoD's $78.8M Lockheed Martin contract for counter fire radar support shows limited competition and fair value

Contract Overview

Contract Amount: $78,798,262 ($78.8M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2020-09-28

End Date: 2023-05-30

Contract Duration: 974 days

Daily Burn Rate: $80.9K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: COUNTER FIRE TARGET ACQUISITION RADAR SYSTEM (AN/TPQ-53) CONTRACTOR SUPPORT SERVICES (CSS) AND INTERIM CONTRACTOR SUPPORT (ICS) #4 SERVICES AND SUPPORT.

Place of Performance

Location: LIVERPOOL, ONONDAGA County, NEW YORK, 13088

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $78.8 million to LOCKHEED MARTIN CORPORATION for work described as: COUNTER FIRE TARGET ACQUISITION RADAR SYSTEM (AN/TPQ-53) CONTRACTOR SUPPORT SERVICES (CSS) AND INTERIM CONTRACTOR SUPPORT (ICS) #4 SERVICES AND SUPPORT. Key points: 1. Contract awarded to a single, large defense contractor, indicating limited competition. 2. Pricing appears fair when benchmarked against similar defense support services. 3. Risk indicators are moderate, primarily related to the sole-source nature of the award. 4. Performance context is within the critical area of battlefield awareness and targeting. 5. Sector positioning is within the established defense electronics and systems support market. 6. The contract duration of nearly three years suggests a sustained need for these services.

Value Assessment

Rating: fair

The total contract value of approximately $78.8 million for Counter Fire Target Acquisition Radar System (AN/TPQ-53) contractor support services appears to be within a reasonable range for specialized defense systems support. Benchmarking against similar sole-source or limited-competition contracts for complex radar systems and their associated maintenance and sustainment reveals comparable cost structures. While specific cost breakdowns are not publicly available, the fixed-fee component suggests some level of cost control by the government. However, without competitive bidding, a definitive assessment of optimal value is challenging.

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 employed when a specific contractor possesses unique capabilities, proprietary technology, or is the sole provider of essential services or parts. The lack of competition means that price discovery through market forces was not utilized, potentially leading to higher costs than if multiple vendors had competed. The government likely justified this approach based on the specialized nature of the AN/TPQ-53 system and Lockheed Martin's role as the original equipment manufacturer or primary support provider.

Taxpayer Impact: For taxpayers, a sole-source award means the absence of competitive pressure to drive down prices. This can result in a higher overall expenditure for the government compared to a fully competed contract, as the contractor faces less incentive to offer the most cost-effective solution.

Public Impact

The primary beneficiaries are the U.S. Department of Defense units relying on the AN/TPQ-53 radar system for battlefield awareness and counter-fire targeting. Services delivered include contractor support and interim contractor support, crucial for maintaining the operational readiness of advanced radar systems. The geographic impact is likely concentrated at military bases and operational theaters where these radar systems are deployed. Workforce implications include the employment of specialized technical personnel by Lockheed Martin to support the radar systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Lack of transparency in detailed cost breakdowns for a Cost Plus Fixed Fee contract.
Reliance on a single contractor for critical system support can create vendor lock-in.
Contract duration of nearly three years may not reflect the most agile or cost-effective support solutions.

Positive Signals

Award to an established defense contractor with a known track record in radar systems.
Contract provides essential support for a critical military capability (counter fire targeting).
Fixed-fee component provides some level of cost predictability for the government.
The contract ensures continued operational readiness of vital defense equipment.

Sector Analysis

The defense electronics and systems manufacturing sector is characterized by high barriers to entry, significant R&D investment, and long product lifecycles. Contracts for specialized radar systems and their support are typically awarded to large, established defense prime contractors like Lockheed Martin. The market size for such specialized systems is substantial, driven by ongoing military modernization and operational requirements. This contract fits within the broader category of defense readiness and sustainment, where long-term support agreements are common for complex platforms.

Small Business Impact

This contract does not appear to involve small business set-asides, as indicated by the sole-source award to Lockheed Martin Corporation. There is no explicit information regarding subcontracting plans for small businesses within the provided data. Consequently, the direct impact on the small business ecosystem for this specific contract is likely minimal, with opportunities potentially arising only if Lockheed Martin chooses to subcontract certain components or services to smaller firms.

Oversight & Accountability

Oversight for this contract is managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance with contract terms. As a Cost Plus Fixed Fee contract, financial oversight is particularly important to monitor costs against the agreed-upon fixed fee. Transparency is limited due to the sole-source nature and the lack of detailed public cost breakdowns. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

AN/TPQ-53 Radar System Procurement
Defense Radar Systems Support
Battlefield Intelligence Systems
Military Electronics Sustainment
Lockheed Martin Defense Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Vendor lock-in risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $78.8 million to LOCKHEED MARTIN CORPORATION. COUNTER FIRE TARGET ACQUISITION RADAR SYSTEM (AN/TPQ-53) CONTRACTOR SUPPORT SERVICES (CSS) AND INTERIM CONTRACTOR SUPPORT (ICS) #4 SERVICES AND SUPPORT.

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 $78.8 million.

What is the period of performance?

Start: 2020-09-28. End: 2023-05-30.

What is Lockheed Martin's track record with similar radar system support contracts?

Lockheed Martin Corporation has an extensive track record supporting a wide array of radar systems for the U.S. military and international allies. This includes systems for air defense, surveillance, targeting, and electronic warfare. Their experience spans decades, encompassing development, production, integration, and long-term sustainment. For counter-fire radar systems specifically, Lockheed Martin has been a key player, often serving as the prime contractor or a major subcontractor. Their history suggests a deep understanding of the technical complexities and operational requirements associated with these critical defense assets. However, the specific performance metrics and value propositions of past contracts can vary significantly based on contract type, competition level, and specific system requirements.

How does the value of this contract compare to other DoD radar support contracts?

The total contract value of approximately $78.8 million for the AN/TPQ-53 CSS and ICS services over a period of nearly three years is substantial but falls within the expected range for specialized defense systems support. When compared to other contracts for similar complex radar systems (e.g., air defense radars, surveillance radars) and their associated sustainment, maintenance, and upgrade services, this contract's value appears commensurate. However, direct comparisons are often difficult due to variations in contract scope, duration, system complexity, and whether the contract is for new procurement, sustainment, or interim support. Sole-source contracts, like this one, may inherently carry higher price points than competitively bid contracts for comparable services.

What are the primary risks associated with this sole-source contract?

The primary risks associated with this sole-source contract are centered around cost and potential lack of innovation. Without competition, Lockheed Martin has less incentive to offer the most cost-effective solutions, potentially leading to higher prices for the government than if multiple bidders were involved. There's also a risk of vendor lock-in, where the government becomes dependent on a single provider for critical support, making it difficult and costly to switch providers in the future. Furthermore, the absence of competitive pressure might reduce the urgency for the contractor to innovate or implement efficiency improvements. The government's ability to negotiate favorable terms is also diminished in a sole-source scenario.

How effective is the AN/TPQ-53 radar system, and what is the impact of this support contract on its effectiveness?

The AN/TPQ-53 Counter Fire Target Acquisition Radar System is a critical component of U.S. military operations, designed to detect and track incoming enemy artillery, rockets, and mortars, thereby enabling rapid counter-battery fire. Its effectiveness is crucial for protecting friendly forces and disrupting enemy attacks. This support contract, providing Contractor Support Services (CSS) and Interim Contractor Support (ICS), is directly linked to maintaining the operational readiness and performance of the AN/TPQ-53. By ensuring timely maintenance, repairs, technical assistance, and potentially spare parts, the contract directly contributes to the system's reliability and availability in the field, thereby maximizing its effectiveness in safeguarding troops and enabling mission success.

What are the historical spending patterns for AN/TPQ-53 support or similar radar systems by the DoD?

Historical spending patterns for the AN/TPQ-53 and similar counter-fire radar systems by the Department of Defense typically involve significant investments over the lifecycle of the equipment. This includes initial procurement costs, followed by substantial expenditures on sustainment, maintenance, upgrades, and contractor support services. Contracts for such systems often span multiple years and can run into hundreds of millions or even billions of dollars over their operational life. Spending tends to be concentrated with major defense contractors who possess the specialized expertise and manufacturing capabilities. The nature of these contracts often shifts from competitive procurement to sole-source or limited-competition sustainment as systems mature and become specialized.

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: 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: $118,643,571

Exercised Options: $78,798,262

Current Obligation: $78,798,262

Subaward Activity

Number of Subawards: 116

Total Subaward Amount: $31,487,998

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