Army awards $40.8M for Apache Helicopter Radar Frequency Interferometer production and support to Lockheed Martin
Contract Overview
Contract Amount: $40,846,000 ($40.8M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2024-08-29
End Date: 2027-08-30
Contract Duration: 1,096 days
Daily Burn Rate: $37.3K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: THIS REQUIREMENT IS FOR THE PROCUREMENT OF THE GEN 2/3 RADAR FREQUENCY INTERFEROMETER (RFI), FOR PRODUCTION, SUSTAINMENT HARDWARE, TECHNICAL, LOGISTICAL, TEST, AND ENGINEERING SUPPORT FOR THE APACHE ATTACK HELICOPTER.
Place of Performance
Location: OWEGO, TIOGA County, NEW YORK, 13827
State: New York Government Spending
Plain-Language Summary
Department of Defense obligated $40.8 million to LOCKHEED MARTIN CORPORATION for work described as: THIS REQUIREMENT IS FOR THE PROCUREMENT OF THE GEN 2/3 RADAR FREQUENCY INTERFEROMETER (RFI), FOR PRODUCTION, SUSTAINMENT HARDWARE, TECHNICAL, LOGISTICAL, TEST, AND ENGINEERING SUPPORT FOR THE APACHE ATTACK HELICOPTER. Key points: 1. The contract focuses on critical sustainment hardware and engineering support for the Apache attack helicopter. 2. Lockheed Martin is the sole awardee, raising questions about competition and potential price discovery. 3. The award is a delivery order under an existing contract, suggesting a continuation of a known relationship. 4. The sector is dominated by large prime contractors, with limited opportunities for smaller specialized firms.
Value Assessment
Rating: fair
The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not closely managed. Benchmarking against similar complex aerospace components is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This award was not competed, indicating a sole-source or limited competition scenario. This limits the government's ability to leverage market competition to achieve the best possible price.
Taxpayer Impact: The lack of competition may result in higher costs for taxpayers compared to a fully competed procurement.
Public Impact
Ensures continued operational readiness of the Apache attack helicopter fleet. Supports advanced radar technology crucial for threat detection and targeting. Maintains critical defense manufacturing capabilities within the US. Potential for cost increases due to sole-source award.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition.
- Cost-plus contract type carries inherent cost overrun risk.
- Long duration of support could escalate total contract value.
Positive Signals
- Essential for maintaining critical defense platform.
- Awardee has established expertise in the system.
- Supports US defense industrial base.
Sector Analysis
This procurement falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts and auxiliary equipment. Spending in this area is often characterized by long-term contracts, high R&D investment, and significant consolidation among prime contractors.
Small Business Impact
The contract was awarded to Lockheed Martin, a large prime contractor. There is no indication of subcontracting opportunities for small businesses in the provided data, suggesting limited direct impact.
Oversight & Accountability
As a delivery order under an existing contract, oversight may be ongoing. However, the sole-source nature warrants close monitoring of costs and performance to ensure accountability and value for money.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Lack of competition may lead to inflated prices.
- Cost Plus Fixed Fee contract type increases risk of cost overruns.
- Potential for vendor lock-in due to specialized nature of the equipment.
- Long contract duration could obscure true value for money over time.
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, ny, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $40.8 million to LOCKHEED MARTIN CORPORATION. THIS REQUIREMENT IS FOR THE PROCUREMENT OF THE GEN 2/3 RADAR FREQUENCY INTERFEROMETER (RFI), FOR PRODUCTION, SUSTAINMENT HARDWARE, TECHNICAL, LOGISTICAL, TEST, AND ENGINEERING SUPPORT FOR THE APACHE ATTACK HELICOPTER.
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 $40.8 million.
What is the period of performance?
Start: 2024-08-29. End: 2027-08-30.
What is the historical cost performance of similar Cost Plus Fixed Fee contracts for radar systems within the Department of Defense?
Historical data for similar Cost Plus Fixed Fee (CPFF) contracts in radar systems within the DoD often shows a wide variance in cost performance. While CPFF contracts are intended to incentivize contractor efficiency, they can also lead to cost growth if the scope is not well-defined or if unforeseen technical challenges arise. Robust oversight and clear performance metrics are crucial to mitigate these risks and ensure value.
What is the justification for the sole-source award, and what steps are being taken to ensure fair pricing?
The justification for a sole-source award typically involves factors like unique capabilities, proprietary technology, or urgent need where only one source can fulfill the requirement. To ensure fair pricing, the government should conduct a thorough price analysis, potentially using historical pricing, should-cost estimates, or comparison to similar commercial items if applicable. Independent cost estimates and negotiation are vital.
How will the long-term sustainment and engineering support be managed to prevent cost creep and ensure effective technology insertion?
Effective management of long-term sustainment and engineering support requires a clear contract structure with well-defined performance metrics and service level agreements. Regular performance reviews, competitive re-evaluation of support tasks where feasible, and proactive technology road mapping are essential. Establishing ceilings for cost-plus elements and incentivizing efficiency can help control costs and ensure the system remains effective.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
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: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 1801 STATE ROUTE 17C, 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: $78,803,000
Exercised Options: $40,846,000
Current Obligation: $40,846,000
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W58RGZ24D0078
IDV Type: IDC
Timeline
Start Date: 2024-08-29
Current End Date: 2027-08-30
Potential End Date: 2027-08-30 12:08:00
Last Modified: 2025-07-15
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