Department of the Army awards $38M for Delta Kits, supporting Abrams and Bradley vehicle readiness

Contract Overview

Contract Amount: $38,020,672 ($38.0M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2021-09-27

End Date: 2026-12-28

Contract Duration: 1,918 days

Daily Burn Rate: $19.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY OF DELTA KITS UNDER VTESS SINGLE AWARD IDIQ. DELTA KITS IS SHORTHAND FOR THE READINESS TECHNOLOGY LEVEL , ABRAMS, BRADLEY, MOBILE GUN SYSTEM AND ANTI-TANK GUIDED MISSILES KITS, ETC. AS DESCRIBED IN PARAGRAPH B.4 OF THE SOW.

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32825

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $38.0 million to LOCKHEED MARTIN CORPORATION for work described as: DELIVERY OF DELTA KITS UNDER VTESS SINGLE AWARD IDIQ. DELTA KITS IS SHORTHAND FOR THE READINESS TECHNOLOGY LEVEL , ABRAMS, BRADLEY, MOBILE GUN SYSTEM AND ANTI-TANK GUIDED MISSILES KITS, ETC. AS DESCRIBED IN PARAGRAPH B.4 OF THE SOW. Key points: 1. This contract focuses on delivering critical upgrade kits for armored vehicles, enhancing combat readiness. 2. The award to Lockheed Martin Corporation suggests a reliance on established defense manufacturing capabilities. 3. The firm-fixed-price contract type aims to provide cost certainty for the government. 4. The duration of the contract extends over five years, indicating a long-term need for these components. 5. The geographic focus on Florida for delivery suggests a specific logistical or operational hub.

Value Assessment

Rating: good

Benchmarking the value of this contract is challenging without specific per-unit cost data for the Delta Kits. However, the total award amount of $38 million over approximately five years for specialized military hardware suggests a significant investment in maintaining and upgrading combat vehicle fleets. Given the complexity and specialized nature of the kits, the pricing appears to be within a reasonable range for defense procurement, assuming the delivered kits meet all technical specifications and performance requirements. Further analysis would require comparing the cost of similar upgrade kits for different vehicle platforms or historical pricing trends for these specific components.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under a full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The specific number of bidders is not provided, but the 'full and open' designation generally suggests a competitive environment. This approach is intended to foster price discovery and ensure the government receives the best value by considering a wide range of potential suppliers.

Taxpayer Impact: A full and open competition provides taxpayers with assurance that the government sought the most cost-effective solution, potentially leading to lower prices compared to sole-source or limited competitions.

Public Impact

The primary beneficiaries are the U.S. Army personnel who operate and maintain Abrams, Bradley, and other combat vehicles. The services delivered include the provision of essential upgrade kits that enhance the technological capabilities and operational readiness of armored fighting vehicles. The geographic impact is primarily within the United States, with specific delivery points likely at military bases or depots, as indicated by the Florida delivery location. Workforce implications include supporting jobs in manufacturing, logistics, and defense contracting, particularly within Lockheed Martin's supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the scope of 'Delta Kits' expands beyond initial expectations.
Reliance on a single contractor, Lockheed Martin, could limit future competitive pricing if not managed carefully.
Long contract duration may not fully account for rapid technological advancements in defense.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing process.
Firm-fixed-price contract type provides cost certainty for the government.
Focus on critical vehicle readiness directly supports national defense objectives.

Sector Analysis

This contract falls within the defense industrial base, specifically the manufacturing of military vehicles and associated equipment. The market for armored vehicle upgrades is dominated by a few large defense contractors. Spending in this sector is driven by geopolitical factors, military modernization efforts, and the need to maintain readiness of aging fleets. Comparable spending benchmarks would involve looking at other major upgrade programs for tanks, infantry fighting vehicles, and other combat platforms.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses explicitly stated in the provided details. This suggests that the primary awardee, Lockheed Martin, will likely fulfill the contract using its own resources or through its established supply chains, which may or may not involve significant small business participation. Further investigation into Lockheed Martin's subcontracting plans would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army's contracting and program management offices. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified kits. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Armored Vehicle Modernization Programs
Combat Vehicle Improvement Initiatives
Tactical Vehicle Systems
Defense Logistics and Sustainment Contracts

Risk Flags

Long-term contract duration may expose the government to risks of technological obsolescence or changing requirements.
Reliance on a single large contractor for critical components warrants monitoring for potential price increases in future awards.
Lack of specific small business subcontracting goals in the provided data could limit opportunities for smaller enterprises.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.0 million to LOCKHEED MARTIN CORPORATION. DELIVERY OF DELTA KITS UNDER VTESS SINGLE AWARD IDIQ. DELTA KITS IS SHORTHAND FOR THE READINESS TECHNOLOGY LEVEL , ABRAMS, BRADLEY, MOBILE GUN SYSTEM AND ANTI-TANK GUIDED MISSILES KITS, ETC. AS DESCRIBED IN PARAGRAPH B.4 OF THE SOW.

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 $38.0 million.

What is the period of performance?

Start: 2021-09-27. End: 2026-12-28.

What is the historical spending trend for 'Delta Kits' or similar upgrade packages by the Department of the Army?

Analyzing historical spending on 'Delta Kits' or analogous upgrade packages requires access to detailed contract databases and specific product definitions. 'Delta Kits' are described as shorthand for readiness technology levels for vehicles like Abrams, Bradley, and Mobile Gun Systems. The current award of approximately $38 million is a significant single award. To understand trends, one would need to query historical data for similar components or broader vehicle modernization efforts over the past 5-10 years. This would involve looking at contract vehicles, delivery orders, and prime contractors involved in maintaining and upgrading these specific platforms. Without specific historical data points for 'Delta Kits' themselves, comparisons would be made to overall spending on armored vehicle sustainment and modernization, which can fluctuate based on defense budgets, geopolitical events, and the lifecycle of major weapon systems.

How does the per-unit cost of these Delta Kits compare to similar upgrade kits for other military vehicles?

Determining the per-unit cost of these Delta Kits and comparing them to similar upgrade kits for other military vehicles is challenging with the provided data. The total award is $38,020,672, and the contract duration is 1918 days (approximately 5.25 years). The number of kits to be delivered is not specified. To perform a meaningful comparison, we would need to know the exact quantity of kits procured under this award. If, for example, 100 kits were delivered, the average cost per kit would be around $380,000. This figure would then need to be benchmarked against upgrade kits for other platforms, such as Humvees, MRAPs, or even aircraft components. Factors like technological complexity, material costs, research and development amortization, and the scale of production significantly influence per-unit pricing in the defense sector. A higher per-unit cost might be justified for more complex systems like those for Abrams or Bradley tanks compared to lighter vehicles.

What are the specific risks associated with the long-term delivery schedule of this contract?

The long-term delivery schedule of approximately 5.25 years for these Delta Kits presents several potential risks. Firstly, technological obsolescence is a significant concern; defense technology evolves rapidly, and kits designed today might be less effective or compatible with future upgrades by the time they are fully delivered and integrated. Secondly, supply chain disruptions are a risk, especially over an extended period. Geopolitical events, natural disasters, or economic instability could impact the availability of raw materials or components needed for manufacturing. Thirdly, cost escalation, despite the firm-fixed-price nature, can occur if unforeseen issues arise in manufacturing or if the initial cost estimates did not adequately account for inflation or material price volatility over such a long duration. Finally, changes in military doctrine or operational requirements could render the specific upgrades less relevant, leading to potential underutilization or the need for further modifications.

What is Lockheed Martin Corporation's track record with similar defense contracts, particularly for vehicle upgrades?

Lockheed Martin Corporation has an extensive and well-established track record in the defense sector, including numerous contracts for the development, manufacturing, and sustainment of military vehicles and their associated systems. They are a primary contractor for the Abrams Main Battle Tank and the Bradley Fighting Vehicle, the very platforms for which these Delta Kits are intended. This deep involvement suggests a strong understanding of the technical requirements, operational context, and logistical needs associated with these systems. Their history includes delivering complex upgrade packages, weapon systems integration, and long-term sustainment services for various military platforms across different branches of the U.S. armed forces and allied nations. While specific performance metrics for every contract are not publicly detailed, their consistent selection for major defense programs indicates a perceived capability and reliability in meeting government requirements, though like any large contractor, they have also faced scrutiny on specific programs regarding cost and schedule.

How does the 'full and open competition' for this contract ensure value for taxpayers compared to other contracting methods?

A 'full and open competition' is generally considered the most effective method for ensuring value for taxpayers in government contracting. This process requires the government to solicit proposals from all responsible sources, meaning any interested and qualified company can bid. This broad solicitation maximizes the pool of potential offerors, thereby increasing the likelihood of receiving competitive bids and innovative solutions. The competition drives down prices as contractors vie for the award. Furthermore, it provides transparency and fairness, reducing the risk of favoritism or cronyism. Compared to sole-source contracts, where only one vendor is considered (often leading to higher prices due to lack of competition), or limited competitions (where only a few pre-selected vendors bid), full and open competition offers the greatest potential for cost savings and the best overall value by leveraging market forces to their fullest extent.

Industry Classification

NAICS: Manufacturing › Commercial and Service Industry Machinery Manufacturing › Other Commercial and Service Industry Machinery Manufacturing

Product/Service Code: TRAINING AIDS AND DEVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W900KK16R0003

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 100 GLOBAL INNOVATION CIR, ORLANDO, FL, 32825

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: $38,020,672

Exercised Options: $38,020,672

Current Obligation: $38,020,672

Subaward Activity

Number of Subawards: 39

Total Subaward Amount: $11,408,778

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W900KK17D0003

IDV Type: IDC

Timeline