Lockheed Martin awarded $60.6M for Modernized Laser Range Finder Designator production, supporting Army aviation

Contract Overview

Contract Amount: $60,612,167 ($60.6M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2015-07-30

End Date: 2018-12-31

Contract Duration: 1,250 days

Daily Burn Rate: $48.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: UNDEFINITIZED CONTRACT (UCA) FOR THE MODERNIZED LASER RANGE FINDER DESIGNATOR (MLRFD) LOT 4 PRODUCTION, INCLUSIVE OF M-LRFD KITS AND SPARES, REQUIRED TO SUPPORT PRODUCTION.

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32819

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $60.6 million to LOCKHEED MARTIN CORPORATION for work described as: UNDEFINITIZED CONTRACT (UCA) FOR THE MODERNIZED LASER RANGE FINDER DESIGNATOR (MLRFD) LOT 4 PRODUCTION, INCLUSIVE OF M-LRFD KITS AND SPARES, REQUIRED TO SUPPORT PRODUCTION. Key points: 1. Contract value represents a significant investment in advanced targeting technology for military aviation. 2. Sole-source award raises questions about potential price overruns and lack of competitive pressure. 3. Fixed-price incentive contract structure aims to balance cost control with performance incentives. 4. Long duration suggests a sustained need for these critical components. 5. Geographic concentration in Florida may indicate specific logistical or manufacturing advantages. 6. The contract supports the production of kits and spares, indicating a focus on sustainment and readiness.

Value Assessment

Rating: fair

The contract's total value of $60.6 million over approximately 3.5 years (1250 days) for the MLRFD Lot 4 production is difficult to benchmark without specific per-unit cost data or comparisons to similar systems. The fixed-price incentive (FPI) contract type suggests an attempt to manage costs, but the lack of competition limits the ability to assess if the pricing is truly competitive. The awarded amount of $48.49 million for the base period is a substantial figure, and its value for money hinges on the performance and reliability of the delivered laser range finders.

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 considered. This approach is typically used when a unique capability is required, or when prior contracts have established a sole provider. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices or spurred innovation from multiple vendors. This raises concerns about whether the government secured the best possible price and terms.

Taxpayer Impact: The absence of competition means taxpayers may have paid a premium, as there was no market pressure to ensure the most cost-effective solution was pursued.

Public Impact

The primary beneficiaries are the U.S. Army aviation units requiring advanced targeting capabilities for enhanced situational awareness and mission effectiveness. The contract delivers modernized laser range finder designator kits and essential spare parts, crucial for maintaining operational readiness. The geographic impact is concentrated in Florida, where the contractor is located, potentially supporting local jobs and the defense industrial base in that region. Workforce implications include the need for skilled labor in manufacturing, engineering, and quality assurance within Lockheed Martin's facilities.

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 the procurement process due to non-competitive nature.
Long contract duration could lead to cost escalations if not managed tightly.
Reliance on a single supplier for critical components poses supply chain risks.

Positive Signals

Fixed-price incentive contract aims to align contractor and government interests on cost and performance.
Production of spares ensures sustainment and operational readiness of the MLRFD system.
Award supports a critical defense capability for Army aviation.

Sector Analysis

The defense sector, particularly within aerospace and defense manufacturing, relies heavily on specialized components like laser range finder designators. The market for such advanced targeting systems is often dominated by a few large prime contractors due to high R&D costs and stringent performance requirements. This contract fits within the broader category of defense electronics and weapon systems manufacturing, where spending can be substantial and often involves complex, sole-source procurements for unique capabilities. Comparable spending benchmarks would typically involve other advanced electro-optical/infrared (EO/IR) systems or targeting pods for military platforms.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. Furthermore, the prime contractor, Lockheed Martin Corporation, is a large aerospace and defense company. While large prime contractors are often required to subcontract a portion of their work to small businesses, the specific subcontracting plan for this contract is not detailed here. The absence of a direct small business set-aside means that opportunities for small businesses to compete directly for this prime contract were limited.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. As a definitive contract, it is subject to standard federal procurement regulations and oversight. Transparency is limited due to the sole-source nature of the award. Accountability measures are embedded within the fixed-price incentive contract terms, which link payment to performance and cost targets. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Army Aviation Modernization Programs
Advanced Targeting Systems
Electro-Optical/Infrared (EO/IR) Systems
Defense Production Contracts
Laser Range Finder Designators

Risk Flags

Sole-source procurement
Lack of competitive pricing
Potential for cost overruns
Supply chain dependency on a single vendor

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $60.6 million to LOCKHEED MARTIN CORPORATION. UNDEFINITIZED CONTRACT (UCA) FOR THE MODERNIZED LASER RANGE FINDER DESIGNATOR (MLRFD) LOT 4 PRODUCTION, INCLUSIVE OF M-LRFD KITS AND SPARES, REQUIRED TO SUPPORT PRODUCTION.

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 $60.6 million.

What is the period of performance?

Start: 2015-07-30. End: 2018-12-31.

What is the historical spending trend for the Modernized Laser Range Finder Designator (MLRFD) program or similar systems by the Department of the Army?

Analyzing historical spending for the MLRFD program or comparable systems is crucial for understanding the long-term investment in this technology. Without specific historical data for the MLRFD program itself, we can infer trends from broader spending on advanced targeting pods and laser designators. The Department of the Army consistently invests billions annually in aviation modernization and weapon systems. Spending on EO/IR systems and targeting technologies has generally increased over the past two decades, driven by evolving battlefield requirements and technological advancements. For instance, programs like the Advanced Precision Kill Weapon System (APKWS) or upgrades to existing targeting pods (e.g., Sniper XR) represent significant, multi-year investments. The $60.6 million awarded here for Lot 4 production, while substantial for a single contract, represents a component of a larger, ongoing modernization effort. Understanding the total lifecycle cost, including R&D, procurement, and sustainment, provides a more comprehensive view of the program's financial footprint.

How does the per-unit cost of the MLRFD kits and spares compare to industry benchmarks or previous versions of the system?

Determining the precise per-unit cost for the MLRFD kits and spares under this $60.6 million contract is challenging without access to detailed pricing breakdowns, which are typically considered proprietary. The contract is a sole-source award, which inherently limits the ability to perform direct cost comparisons against competitive bids. However, the fixed-price incentive (FPI) contract structure suggests that there are target costs and ceiling prices, with incentives for the contractor to perform below the target cost. To benchmark value, one would ideally compare the negotiated price per unit against similar systems from other manufacturers or against the cost of previous generations of the MLRFD, if available. Given the advanced nature of 'modernized' systems, it is common for per-unit costs to be higher than older versions due to increased capabilities, technological sophistication, and potentially lower production volumes. The absence of competition means the government relied on its negotiation power and cost-estimating capabilities to arrive at a fair price.

What are the specific performance metrics and Key Performance Parameters (KPPs) associated with the MLRFD Lot 4 production contract?

The specific performance metrics and Key Performance Parameters (KPPs) for the Modernized Laser Range Finder Designator (MLRFD) Lot 4 production contract are not publicly detailed in the provided data. However, for a system like the MLRFD, KPPs typically revolve around critical operational capabilities such as range accuracy, target identification resolution, environmental operating conditions (temperature, humidity, vibration), reliability (Mean Time Between Failures - MTBF), maintainability, and power consumption. The 'modernized' aspect suggests improvements in areas like increased range, enhanced precision, better target discrimination in adverse weather, integration with newer platforms, or reduced size, weight, and power (SWaP). The Fixed Price Incentive (FPI) contract structure implies that these performance parameters are defined and that achieving them is linked to the incentive portion of the contract, potentially rewarding the contractor for exceeding baseline requirements or penalizing them for failing to meet them.

What is Lockheed Martin Corporation's track record with producing similar advanced targeting and laser designation systems for the Department of Defense?

Lockheed Martin Corporation has a long and extensive track record of producing advanced targeting and laser designation systems for the Department of Defense (DoD). They are a major prime contractor in the aerospace and defense industry, known for developing and manufacturing a wide array of sophisticated systems, including electro-optical/infrared (EO/IR) targeting pods, missile seekers, and laser guidance components. Examples include their involvement in systems like the Sniper Advanced Targeting Pod, targeting systems for aircraft like the F-35, F-16, and F/A-18, as well as various missile programs that incorporate laser guidance. Their experience spans decades, encompassing research, development, testing, and large-scale production. This deep experience provides them with significant expertise in system integration, performance optimization, and manufacturing complex defense electronics, making them a frequent choice for sole-source or competitively awarded contracts for such critical technologies.

What are the potential risks associated with a sole-source award for critical defense components like the MLRFD?

Sole-source awards for critical defense components like the Modernized Laser Range Finder Designator (MLRFD) present several potential risks. Firstly, the most significant risk is the lack of price competition, which can lead to higher costs for the government and taxpayers compared to what might be achieved through a competitive bidding process. Without competing offers, the government has less leverage to negotiate favorable pricing and terms. Secondly, sole-source contracts can reduce the incentive for the contractor to innovate or improve efficiency, as there is no direct competitive pressure. Thirdly, reliance on a single supplier can create supply chain vulnerabilities; if the sole source encounters production issues, quality problems, or financial difficulties, it could disrupt the availability of critical components, impacting military readiness. Finally, it can stifle the development of alternative technologies or suppliers in the market.

How does the MLRFD fit into the broader landscape of Army aviation modernization and future warfare concepts?

The Modernized Laser Range Finder Designator (MLRFD) plays a crucial role in the broader landscape of Army aviation modernization by enhancing the precision strike capabilities of its rotary-wing and fixed-wing platforms. In an era focused on multi-domain operations and contested environments, accurate and timely target identification and designation are paramount. The MLRFD enables pilots and sensor operators to precisely locate, identify, and track targets, facilitating the effective employment of guided munitions and improving situational awareness. This directly supports concepts like network-centric warfare, where shared, accurate targeting data is essential for synchronized operations across different domains and services. Modernization efforts in Army aviation are increasingly focused on increasing lethality, survivability, and interoperability, and advanced targeting systems like the MLRFD are fundamental enablers for achieving these objectives, allowing platforms to engage threats more effectively at longer ranges and with reduced collateral damage.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE (L)

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: $60,612,167

Exercised Options: $60,612,167

Current Obligation: $60,612,167

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline