DoD awards $61.6M to Lockheed Martin for radar frequency interferometer support, raising competition concerns

Contract Overview

Contract Amount: $61,601,340 ($61.6M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2023-08-30

End Date: 2026-10-31

Contract Duration: 1,158 days

Daily Burn Rate: $53.2K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MODERNIZED-RADAR FREQUENCY INTERFEROMETER (M-RFI) PRODUCTION, SUSTAINMENT HARDWARE, AND TECHNICAL, LOGISTICAL, TEST, AND ENGINEERING SUPPORT

Place of Performance

Location: OWEGO, TIOGA County, NEW YORK, 13827

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $61.6 million to LOCKHEED MARTIN CORPORATION for work described as: MODERNIZED-RADAR FREQUENCY INTERFEROMETER (M-RFI) PRODUCTION, SUSTAINMENT HARDWARE, AND TECHNICAL, LOGISTICAL, TEST, AND ENGINEERING SUPPORT Key points: 1. Contract awarded on a sole-source basis, limiting potential cost savings from competition. 2. Significant duration of over 3 years suggests a long-term need for these specialized services. 3. The contract focuses on production, sustainment, and technical support, indicating a critical operational role. 4. The value of the contract is substantial, requiring careful monitoring of performance and cost-effectiveness. 5. The specific nature of the M-RFI system suggests a niche market with limited contractor alternatives. 6. The award to a single, established prime contractor may impact opportunities for smaller, specialized firms.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without detailed cost breakdowns or comparable sole-source awards. The fixed-price nature provides some cost certainty, but the lack of competition means taxpayers may not be receiving the best possible price. The contract's value of over $61 million over three years warrants close scrutiny to ensure efficient use of funds for critical defense hardware and support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one responsible source can provide the required supplies or services. The lack of competition limits the government's ability to leverage market forces to achieve lower prices and potentially overlooks innovative solutions from other qualified companies.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the price reductions that can arise from competitive bidding, potentially leading to higher overall costs for this essential defense capability.

Public Impact

The U.S. Army benefits from the continued availability of modernized radar frequency interferometers and associated support. Services delivered include production, sustainment hardware, and technical, logistical, test, and engineering support. The contract's geographic impact is primarily within the United States, supporting domestic defense operations. Workforce implications include the potential for continued employment at Lockheed Martin and its subcontractors involved in M-RFI production and support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Lack of transparency in sole-source justification could hide inefficiencies.
Long-term sustainment contracts can sometimes lead to cost overruns if not managed tightly.
Reliance on a single prime contractor can create vendor lock-in.

Positive Signals

Award to a major defense contractor suggests a high level of trust and established performance.
Firm fixed-price contract provides cost predictability.
Focus on sustainment indicates a commitment to maintaining critical defense assets.
Technical and engineering support ensures operational readiness of complex systems.

Sector Analysis

The defense sector, particularly in aerospace and electronic systems manufacturing, is characterized by high R&D costs, long product lifecycles, and significant government procurement. Contracts for specialized systems like radar frequency interferometers are crucial for maintaining technological superiority. The market for such advanced defense hardware is often concentrated among a few large, established prime contractors due to the complexity and security requirements. Spending in this sub-sector is driven by evolving threats and the need for advanced surveillance and targeting capabilities.

Small Business Impact

This contract does not appear to include a small business set-aside. Given the sole-source nature and the likely specialized requirements of the M-RFI system, opportunities for small businesses may be limited to subcontracting roles. The prime contractor, Lockheed Martin, will likely determine the extent of small business participation through its subcontracting plan, if any.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army, with potential involvement from the Defense Contract Management Agency (DCMA). The firm fixed-price structure provides some level of cost control. Transparency regarding the sole-source justification and performance metrics will be key to assessing accountability. Inspector General reviews may be initiated if performance issues or allegations of impropriety arise.

Related Government Programs

Defense Radar Systems Procurement
Electronic Warfare Systems
Aerospace Manufacturing
Military Logistics Support
Advanced Sensor Technology

Risk Flags

Sole-source award
Potential for cost overruns in sustainment
Limited competition may reduce price discovery
Reliance on a single supplier for critical technology

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $61.6 million to LOCKHEED MARTIN CORPORATION. MODERNIZED-RADAR FREQUENCY INTERFEROMETER (M-RFI) PRODUCTION, SUSTAINMENT HARDWARE, AND TECHNICAL, LOGISTICAL, TEST, AND ENGINEERING 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 (Department of the Army).

What is the total obligated amount?

The obligated amount is $61.6 million.

What is the period of performance?

Start: 2023-08-30. End: 2026-10-31.

What is the specific justification for awarding this contract on a sole-source basis to Lockheed Martin?

The provided data does not detail the specific justification for the sole-source award. Typically, sole-source contracts are justified under circumstances such as unique capabilities, urgent needs, or when only one vendor can meet the requirements. For a system like the Modernized Radar Frequency Interferometer (M-RFI), the justification might stem from proprietary technology, specialized manufacturing processes, or the need for seamless integration with existing platforms where Lockheed Martin is the sole provider. A thorough review of the Justification for Other Than Full and Open Competition (JOFOC) document would be necessary to understand the government's rationale and assess its validity.

How does the $61.6 million contract value compare to historical spending on similar radar frequency interferometer systems?

Without specific historical spending data for comparable M-RFI systems or detailed cost breakdowns within this award, a direct comparison is difficult. However, $61.6 million over approximately three years for production, sustainment, and support of advanced radar technology suggests a significant investment. The value is consistent with the high cost of specialized defense electronics. To provide a more precise benchmark, one would need to analyze past contracts for similar radar systems, considering factors like system complexity, technological advancements, and inflation over time. The lack of competition in this award also means direct price comparisons are unavailable.

What are the key performance indicators (KPIs) being used to measure the success of this contract?

The provided data does not specify the Key Performance Indicators (KPIs) for this contract. However, for a contract involving production, sustainment, and technical support of radar systems, typical KPIs would likely include metrics related to delivery timelines, hardware reliability and uptime, defect rates, response times for technical support, and successful completion of testing and engineering tasks. The firm fixed-price nature of the contract implies that meeting defined specifications and delivery schedules is paramount. Performance would be monitored by the contracting officer and potentially through quality assurance representatives.

What is Lockheed Martin's track record with the Department of the Army for similar defense electronics contracts?

Lockheed Martin Corporation is a major defense contractor with an extensive history of performing complex electronics and systems integration contracts for the Department of the Army and other military branches. They are known for producing a wide range of defense products, including radar systems, aircraft, and communication equipment. Their track record generally includes successful delivery of large-scale programs, though like any major contractor, they may have faced challenges on specific projects. For M-RFI specific work, their experience would be tied to their established expertise in radar technology and electronic warfare systems, likely involving prior development or production phases of this or related systems.

Are there any identified risks associated with the sustainment hardware and technical support aspects of this contract?

Risks associated with sustainment hardware and technical support for advanced systems like the M-RFI can include obsolescence of components, difficulty in sourcing spare parts, degradation of system performance over time, and the need for highly specialized technical expertise. For this sole-source contract, risks also include potential cost increases during the sustainment phase if not tightly managed, and vendor lock-in, making it difficult to switch providers or negotiate better terms in the future. Ensuring robust maintenance schedules, proactive component management, and continuous training for technical personnel are critical to mitigating these risks.

What is the expected impact of this contract on the overall modernization efforts of the U.S. Army's radar capabilities?

This contract is directly tied to the modernization of the U.S. Army's radar capabilities by ensuring the production and ongoing support of the Modernized Radar Frequency Interferometer (M-RFI). The M-RFI likely represents an advancement over older technologies, offering improved detection, tracking, or electronic warfare capabilities. Continued investment in its production and sustainment signifies the Army's commitment to maintaining and enhancing its situational awareness and electronic warfare posture. The successful execution of this contract will ensure that these advanced systems remain operational and effective, contributing to the Army's overall technological edge.

Industry Classification

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

Address: 1801 STATE RT 17 C, OWEGO, NY, 13827

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: $61,601,340

Exercised Options: $61,601,340

Current Obligation: $61,601,340

Subaward Activity

Number of Subawards: 43

Total Subaward Amount: $5,498,600

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W52P1J18D0061

IDV Type: IDC

Timeline