Lockheed Martin awarded $5.97M for Apache helicopter targeting system support, a sole-source contract

Contract Overview

Contract Amount: $5,965,738 ($6.0M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2023-05-05

End Date: 2028-03-31

Contract Duration: 1,792 days

Daily Burn Rate: $3.3K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: POST PRODUCTION SUPPORT SERVICES (PPSS) TO SUPPORT SUSTAINMENT PROGRAM FOR THE GOVERNMENT OF GREECE - HELLENIC ARMY APACHE MODERNIZED TARGET ACQUISITION DESIGNATION / PILOT NIGHT VISION SYSTEM (MTADS/PNVS)

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32819

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $6.0 million to LOCKHEED MARTIN CORPORATION for work described as: POST PRODUCTION SUPPORT SERVICES (PPSS) TO SUPPORT SUSTAINMENT PROGRAM FOR THE GOVERNMENT OF GREECE - HELLENIC ARMY APACHE MODERNIZED TARGET ACQUISITION DESIGNATION / PILOT NIGHT VISION SYSTEM (MTADS/PNVS) Key points: 1. Contract awarded on a sole-source basis, limiting competitive pricing benefits. 2. Focus on sustainment and post-production support for critical military hardware. 3. Long-term contract duration suggests ongoing need for specialized engineering services. 4. Performance period extends through March 2028, indicating sustained demand. 5. Contract type is Firm Fixed Price, providing cost certainty for the government. 6. No small business set-aside, potentially impacting opportunities for smaller firms.

Value Assessment

Rating: fair

The contract value of $5.97 million for post-production support services for the MTADS/PNVS system appears reasonable given the specialized nature of the equipment and the sole-source award. Benchmarking is difficult without comparable sole-source sustainment contracts for similar advanced targeting systems. However, the firm fixed-price structure offers some cost control. The absence of competition inherently limits the ability to assess optimal value for money.

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 product or service is required, and only one source can provide it. The lack of competition means there were no other bidders, and therefore no direct price comparison or negotiation leverage was gained through a competitive bidding process.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government does not benefit from the price reductions typically achieved through competitive bidding.

Public Impact

The Hellenic Army (Greece) benefits from continued operational readiness of their Apache helicopters. Services include post-production support and sustainment for the MTADS/PNVS targeting system. Ensures the availability and effectiveness of a critical component for aerial warfare. Supports the technological capabilities of a key NATO ally.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential cost savings.
Long-term sustainment contract may indicate a lack of alternative solutions or vendor lock-in.
Dependence on a single contractor for critical system support.

Positive Signals

Firm Fixed Price contract provides cost predictability.
Focus on sustainment ensures continued operational capability of essential military equipment.
Contract awarded to a known entity with established expertise in the system.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on the sustainment and support of advanced avionics and targeting systems for military aircraft. The market for such specialized support is often dominated by the original equipment manufacturers due to proprietary knowledge and technical expertise. Comparable spending benchmarks would typically involve other sustainment contracts for complex military systems, which are often sole-sourced or limited competition due to the unique nature of the technology.

Small Business Impact

This contract does not appear to include a small business set-aside. Given the specialized nature of post-production support for advanced military targeting systems, it is likely that the prime contractor, Lockheed Martin, possesses unique capabilities. There is no explicit information provided regarding subcontracting plans to small businesses, which could represent missed opportunities for the small business ecosystem in this specific award.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the Firm Fixed Price contract type, which obligates the contractor to deliver specified services within the agreed price. Transparency is generally maintained through contract databases, though detailed performance metrics may not always be publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Apache Helicopter Modernization Programs
Avionics and Targeting Systems Support
Foreign Military Sales Sustainment
Defense Logistics Agency Support Contracts

Risk Flags

Sole-source award
Potential for higher costs due to lack of competition
Limited transparency on specific performance metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $6.0 million to LOCKHEED MARTIN CORPORATION. POST PRODUCTION SUPPORT SERVICES (PPSS) TO SUPPORT SUSTAINMENT PROGRAM FOR THE GOVERNMENT OF GREECE - HELLENIC ARMY APACHE MODERNIZED TARGET ACQUISITION DESIGNATION / PILOT NIGHT VISION SYSTEM (MTADS/PNVS)

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 $6.0 million.

What is the period of performance?

Start: 2023-05-05. End: 2028-03-31.

What is Lockheed Martin's track record with the MTADS/PNVS system and similar sustainment contracts?

Lockheed Martin Corporation is the original equipment manufacturer (OEM) for the Modernized Target Acquisition Designation/Pilot Night Vision System (MTADS/PNVS). Their track record with this specific system is extensive, as they designed, developed, and manufactured it. They have a long history of providing sustainment, upgrades, and support for various military platforms, including the Apache helicopter. Their experience with complex avionics and targeting systems is well-established, often leading to sole-source or limited-competition awards for sustainment due to proprietary knowledge and the need for specialized expertise. Publicly available data often shows a consistent pattern of them being the primary provider for systems they develop.

How does the $5.97 million value compare to similar sustainment contracts for advanced targeting systems?

Direct comparison of the $5.97 million value is challenging due to the sole-source nature of this award and the specific system involved. Sustainment contracts for advanced military avionics and targeting systems can vary significantly based on the system's complexity, the scope of support (e.g., depot-level maintenance, spare parts, software updates), the number of units supported, and the duration of the contract. Contracts for similar high-tech, mission-critical systems can range from a few million to tens or even hundreds of millions of dollars over their lifecycle. The value here appears to be for a defined period of post-production support, and without knowing the exact deliverables and the number of systems supported for the Hellenic Army, a precise benchmark is difficult. However, for specialized, long-term support of advanced military hardware, this figure is not inherently unreasonable, though the lack of competition prevents definitive value assessment.

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

The primary risk associated with this sole-source contract is the potential for inflated costs due to the absence of competitive bidding. Without competing offers, the government may not achieve the most favorable pricing. Another risk is vendor lock-in, where the government becomes dependent on Lockheed Martin for sustainment, potentially limiting future flexibility or the adoption of alternative technologies. There's also a risk related to contractor performance; while Lockheed Martin has a strong track record, any sole-source provider faces less pressure to innovate or improve efficiency compared to a competitive environment. Finally, if the contractor experiences financial difficulties or strategic shifts, it could impact the sustainment of this critical system for the Hellenic Army.

How effective is the Firm Fixed Price (FFP) contract type in managing costs for this type of service?

The Firm Fixed Price (FFP) contract type is generally considered effective for managing costs when the scope of work is well-defined, as is often the case with post-production support and sustainment services. Under an FFP contract, the contractor assumes most of the risk for cost overruns, and the government pays a set price. This provides cost certainty and predictability for the government, making budgeting easier. For sustainment services where the tasks are largely known (e.g., scheduled maintenance, provision of specific support), FFP helps prevent scope creep from increasing costs. However, if unforeseen technical issues arise that are outside the defined scope, they may require contract modifications, potentially increasing the overall cost.

What are the historical spending patterns for MTADS/PNVS support, and how does this award fit?

Historical spending patterns for MTADS/PNVS support, particularly from the U.S. Department of Defense, have likely involved significant investments over the system's lifecycle, reflecting its advanced capabilities and integration into the Apache fleet. These patterns often include substantial R&D costs, procurement, and ongoing sustainment. Awards for sustainment, especially for foreign military sales like this one to Greece, are common and often follow a similar trajectory of sole-source or limited-competition contracts awarded to the prime manufacturer. This $5.97 million award fits within the expected pattern of ongoing sustainment funding required to maintain the operational readiness of such sophisticated military equipment for allied nations, continuing the lifecycle support provided by Lockheed Martin.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

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: $5,965,738

Exercised Options: $5,965,738

Current Obligation: $5,965,738

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $34,505

Contract Characteristics

Commercial Item: PRODUCTS OR SERVICES PURSUANT TO FAR 12.102(F)

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W52P1J19D0006

IDV Type: IDC

Timeline