Lockheed Martin awarded $140M for Apache helicopter night vision components, with no competition

Contract Overview

Contract Amount: $139,513,968 ($139.5M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2021-12-28

End Date: 2026-10-31

Contract Duration: 1,768 days

Daily Burn Rate: $78.9K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PRODUCTION OF MODERNIZED TARGET ACQUISITION DESIGNATION SYSTEM/PILOT NIGHT VISION SIGHT COMPONENTS FOR APACHE HELICOPTERS IN SUPPORT OF THE USG AND FOREIGN MILITARY SALES - EGYPT.

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32819

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $139.5 million to LOCKHEED MARTIN CORPORATION for work described as: PRODUCTION OF MODERNIZED TARGET ACQUISITION DESIGNATION SYSTEM/PILOT NIGHT VISION SIGHT COMPONENTS FOR APACHE HELICOPTERS IN SUPPORT OF THE USG AND FOREIGN MILITARY SALES - EGYPT. Key points: 1. Significant investment in critical aviation technology for Apache helicopters. 2. Sole-source award raises questions about price competitiveness and potential for cost savings. 3. Long contract duration suggests a sustained need for these specialized components. 4. Focus on modernization highlights ongoing efforts to enhance military capabilities. 5. Foreign Military Sales component indicates international demand for US defense technology.

Value Assessment

Rating: questionable

The contract value of approximately $140 million for modernized target acquisition and designation system/pilot night vision sight components is substantial. Without competitive bidding, it is difficult to benchmark the value for money. The firm-fixed-price contract type offers some cost certainty, but the absence of competition means taxpayers may not be benefiting from the lowest possible price. Further analysis would be needed to compare this pricing to similar systems or previous contracts for comparable components.

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 bypasses the standard competitive procurement process. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities, urgent needs), they limit price discovery and can lead to higher costs for the government compared to a fully competed contract. The lack of multiple bids prevents a direct comparison of offers and potential negotiation leverage.

Taxpayer Impact: The absence of competition for this significant contract means taxpayers may be paying a premium. Without competing offers, there is less pressure on the contractor to offer the most cost-effective solution, potentially leading to less efficient use of public funds.

Public Impact

The primary beneficiaries are the US Army and potentially allied nations (Egypt) through Foreign Military Sales, receiving modernized night vision capabilities for Apache helicopters. The contract delivers critical components for advanced targeting and situational awareness systems, enhancing the combat effectiveness of Apache attack helicopters. The contract is primarily associated with operations in Florida, indicated by the 'ST' and 'SN' codes, likely involving manufacturing or assembly. This contract supports specialized manufacturing jobs within the aerospace and defense sector, contributing to the skilled workforce required for advanced military hardware production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Long contract duration (over 4 years) may not reflect the most efficient procurement strategy.
Lack of transparency in the justification for a sole-source award.
Potential for cost overruns if not closely monitored due to lack of competitive pressure.

Positive Signals

Addresses a critical need for modernized night vision systems on high-value platforms.
Firm-fixed-price contract provides some cost predictability.
Supports a key defense contractor with established expertise in this area.
Foreign Military Sales component can bolster international partnerships and US influence.

Sector Analysis

This contract falls within the Aircraft Manufacturing sub-sector of the broader aerospace and defense industry. The market for advanced avionics and targeting systems is highly specialized, often dominated by a few large prime contractors like Lockheed Martin due to the significant R&D investment and proprietary technology involved. Comparable spending benchmarks would typically involve other contracts for similar integrated systems on military aircraft, which are often awarded through competitive processes or as sole-source due to unique technological requirements.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a sole-source award to a large prime contractor, it is unlikely that significant subcontracting opportunities for small businesses will be mandated or easily accessible unless proactively pursued by the prime. This contract does not appear to directly contribute to the small business ecosystem in terms of set-asides, though Lockheed Martin may engage small businesses as part of its broader supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. The firm-fixed-price nature provides a degree of cost control, but the sole-source justification requires rigorous review to ensure necessity and fair pricing. Transparency regarding the rationale for the sole-source award and ongoing performance monitoring would be key accountability measures. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Apache Helicopter Modernization Programs
Night Vision Systems Procurement
Target Acquisition Systems
Foreign Military Sales - Egypt
Avionics and Electronic Warfare Systems

Risk Flags

Sole-source award lacks competitive justification.
Potential for inflated pricing due to lack of competition.
Long contract duration may not align with rapid technological advancements.
Limited transparency on specific performance metrics and oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $139.5 million to LOCKHEED MARTIN CORPORATION. PRODUCTION OF MODERNIZED TARGET ACQUISITION DESIGNATION SYSTEM/PILOT NIGHT VISION SIGHT COMPONENTS FOR APACHE HELICOPTERS IN SUPPORT OF THE USG AND FOREIGN MILITARY SALES - EGYPT.

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 $139.5 million.

What is the period of performance?

Start: 2021-12-28. End: 2026-10-31.

What is the specific justification provided by the Department of the Army for awarding this contract on a sole-source basis to Lockheed Martin Corporation?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source procurements are justified under specific circumstances outlined in the Federal Acquisition Regulation (FAR), such as when only one responsible source is available or possesses unique capabilities, or in cases of urgent and compelling need. Without access to the Justification and Approval (J&A) document, it is impossible to ascertain the precise rationale. This lack of transparency is a concern, as it prevents independent verification of the necessity for bypassing the competitive bidding process and potentially impacts the government's ability to secure the best possible price.

How does the pricing of these modernized night vision sight components compare to previous procurements or similar systems from other manufacturers?

The provided data does not contain sufficient information to perform a direct pricing comparison. Key details such as the specific technical specifications of the components, the quantity ordered in this delivery order, and historical pricing data for similar systems are missing. Furthermore, since this was a sole-source award, there is no competitive benchmark to evaluate against. To assess value for money, one would need to compare the per-unit cost (if calculable from the total award and quantity) against industry benchmarks, previous contracts for the same or comparable systems, or pricing for systems with similar capabilities offered by other defense contractors. The absence of competitive bids makes such an assessment challenging.

What are the key performance metrics and delivery milestones associated with this contract, and how is Lockheed Martin's performance being monitored?

The provided data indicates the contract start date (2021-12-28) and end date (2026-10-31), suggesting a performance period of nearly five years. However, specific key performance metrics (e.g., reliability rates, image quality standards, integration success) and detailed delivery milestones are not included. Monitoring of Lockheed Martin's performance would typically be managed by the Army Contracting Officer's Representative (COR) and the Program Management Office. This would involve regular progress reviews, acceptance testing of delivered components, and adherence to the schedule. The firm-fixed-price nature implies that the contractor is responsible for meeting performance specifications within the agreed price, but the government still needs to actively monitor quality and timeliness.

What is the total historical spending by the Department of the Army on Apache helicopter night vision systems, and how does this contract fit into that pattern?

The provided data focuses solely on this specific contract award of approximately $140 million. It does not offer historical spending figures for Apache helicopter night vision systems by the Department of the Army. To understand the broader spending pattern, one would need to access historical contract databases (e.g., FPDS, SAM.gov) and aggregate spending on relevant Product Service Codes (PSCs) or contract descriptions related to Apache avionics and night vision over several fiscal years. This contract represents a significant, but likely not isolated, investment in maintaining and modernizing the Apache fleet's sensory capabilities, reflecting an ongoing commitment to upgrading this critical platform.

What are the potential risks associated with a sole-source award of this magnitude, particularly concerning technological obsolescence and future upgradeability?

Sole-source awards, especially for complex technological systems, carry inherent risks. One significant risk is the potential for the contractor to become the sole provider of technology, potentially leading to vendor lock-in and limiting future competition for upgrades or replacements. Regarding technological obsolescence, the long duration of this contract (ending in 2026) means that the components being produced might be nearing the end of their cutting-edge lifecycle by the time they are fully delivered or integrated. Without competitive pressure, there might be less incentive for the contractor to incorporate the latest advancements or ensure seamless future upgrade paths. The government must ensure contract terms address technology refresh cycles and interoperability requirements to mitigate these risks.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: ENGINE ACCESSORIES

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 # 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: $139,513,968

Exercised Options: $139,513,968

Current Obligation: $139,513,968

Subaward Activity

Number of Subawards: 82

Total Subaward Amount: $11,454,431

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W52P1J17D0043

IDV Type: IDC

Timeline