Lockheed Martin awarded $12.6M contract for advanced gunnery training systems, with limited competition

Contract Overview

Contract Amount: $12,601,792 ($12.6M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2023-04-18

End Date: 2026-08-31

Contract Duration: 1,231 days

Daily Burn Rate: $10.2K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: TABLETOP ADVANCED GUNNERY TRAINING SYSTEM (T-AGTS) CREW STATIONS.

Plain-Language Summary

Department of Defense obligated $12.6 million to LOCKHEED MARTIN CORPORATION for work described as: TABLETOP ADVANCED GUNNERY TRAINING SYSTEM (T-AGTS) CREW STATIONS. Key points: 1. The contract value of $12.6 million for training systems suggests a significant investment in crew readiness. 2. Limited competition for this contract may indicate specialized requirements or a lack of alternative providers. 3. The firm-fixed-price nature of the contract shifts performance risk to the contractor, Lockheed Martin. 4. The duration of the contract (over 3 years) points to a sustained need for these training capabilities. 5. The absence of small business set-aside flags suggests this contract is not specifically targeting smaller enterprises. 6. The procurement falls under 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' indicating a niche within defense manufacturing.

Value Assessment

Rating: fair

Benchmarking the value of this $12.6 million contract is challenging without specific details on the T-AGTS system's capabilities and the number of units procured. However, given the specialized nature of advanced military training systems, the price appears within a plausible range for complex technological solutions. Further analysis would require comparing this to similar advanced simulation or training systems procured by the Department of Defense or other military branches to assess if the pricing is competitive for the delivered functionality and technological sophistication.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'NOT AVAILABLE FOR COMPETITION,' which typically signifies a sole-source or limited competition scenario. This could be due to the proprietary nature of the technology, the unique capabilities required, or a lack of sufficient qualified bidders. The limited competition means that the government may not have achieved the full benefits of price discovery that would result from a broader bidding process, potentially leading to a higher price than if multiple vendors had competed.

Taxpayer Impact: For taxpayers, limited competition can mean less assurance of obtaining the best possible price for the required goods or services. It necessitates robust government negotiation and oversight to ensure value for money is still achieved.

Public Impact

The primary beneficiaries are Department of the Army personnel requiring advanced gunnery training. The contract delivers critical training systems that enhance crew proficiency and combat readiness. The geographic impact is likely focused on military installations where the training systems will be deployed or utilized. Workforce implications may include specialized technical support and maintenance roles related to the training systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition raises concerns about potential overpricing and lack of innovation.
Lack of transparency in the 'not available for competition' justification requires scrutiny.
Dependence on a single contractor for critical training systems could pose long-term supply chain risks.

Positive Signals

Firm-fixed-price contract structure provides cost certainty and transfers risk to the contractor.
Award to Lockheed Martin, a major defense contractor, suggests a focus on proven capabilities.
The contract supports the modernization of military training, enhancing operational effectiveness.

Sector Analysis

The defense training and simulation market is a significant segment within the broader aerospace and defense industry. This contract for the TABLETOP ADVANCED GUNNERY TRAINING SYSTEM (T-AGTS) fits within the specialized niche of military simulation and training solutions. The market is characterized by high technological barriers to entry and a strong reliance on government contracts. Comparable spending benchmarks would involve looking at other advanced simulation systems for various military platforms, which can range from millions to hundreds of millions of dollars depending on complexity and scale.

Small Business Impact

The contract data indicates that small business participation was not a primary consideration, as the 'sb' (small business) flag is false and there is no mention of small business set-asides. This suggests that the prime contract was not specifically allocated to small businesses. Subcontracting opportunities for small businesses may exist, but they are not explicitly detailed in the provided data and would depend on Lockheed Martin's subcontracting plan.

Oversight & Accountability

Oversight for this contract would primarily 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 goods or services within the agreed-upon price. Transparency regarding the 'not available for competition' justification would be crucial for assessing the procurement process. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Military Simulation and Training Systems
Advanced Gunnery Training Programs
Department of Defense Procurement
Lockheed Martin Defense Contracts

Risk Flags

Limited Competition Justification
Potential for Cost Overruns (if FFP price not well-negotiated)
Contractor Performance Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.6 million to LOCKHEED MARTIN CORPORATION. TABLETOP ADVANCED GUNNERY TRAINING SYSTEM (T-AGTS) CREW STATIONS.

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 $12.6 million.

What is the period of performance?

Start: 2023-04-18. End: 2026-08-31.

What is the specific technological capability of the TABLETOP ADVANCED GUNNERY TRAINING SYSTEM (T-AGTS) and how does it enhance crew performance compared to previous systems?

The TABLETOP ADVANCED GUNNERY TRAINING SYSTEM (T-AGTS) is designed to provide realistic and immersive training for military crews operating advanced weapon systems. While specific technical details are often proprietary, these systems typically incorporate high-fidelity simulations of battlefield environments, realistic weapon physics, and interactive crew stations that mimic actual vehicle controls and displays. The 'tabletop' designation might imply a more modular or deployable system compared to full-scale simulators. Its enhancement over previous systems likely lies in improved graphical fidelity, more sophisticated artificial intelligence for adversary behavior, advanced data analytics for performance feedback, and potentially network capabilities for multi-crew or joint training exercises. The $12.6 million contract value suggests a substantial investment in these advanced features, aiming to significantly improve crew decision-making, target acquisition, and engagement proficiency in a safe, repeatable, and cost-effective training environment.

How does the 'not available for competition' status impact the overall value for money achieved in this $12.6 million contract?

The 'not available for competition' status, indicating a sole-source or limited competition award, inherently raises questions about the potential for achieving optimal value for money. In a competitive bidding process, multiple vendors vie to offer the best price and performance, driving down costs and fostering innovation. When competition is limited, the government relies more heavily on its negotiation expertise and market research to ensure a fair price. For this $12.6 million contract, the absence of broad competition means the Department of the Army may not have benefited from the price pressures that typically arise from multiple bids. This necessitates a thorough review of the contractor's proposed costs, profit margins, and the justification for limiting competition to ensure that the final price reflects a reasonable return for the capabilities provided and does not include an undue premium.

What are the potential risks associated with awarding a contract for critical training systems to a single provider like Lockheed Martin?

Awarding a contract for critical training systems to a single provider, even a large and reputable one like Lockheed Martin, carries several potential risks. Firstly, there's the risk of vendor lock-in, where the government becomes heavily reliant on that specific contractor for upgrades, maintenance, and future iterations of the system. This dependence can limit flexibility and bargaining power in future negotiations. Secondly, a lack of competition can stifle innovation over the long term, as the contractor may face less pressure to develop cutting-edge improvements. Thirdly, supply chain disruptions or financial instability within the sole provider could significantly impact the availability and support of these essential training systems. Finally, without competitive benchmarking, there's an increased risk of the contractor charging premium prices over the contract's lifecycle, impacting long-term cost-effectiveness for the Department of the Army.

Can the firm-fixed-price (FFP) contract type mitigate risks related to cost overruns for this $12.6 million T-AGTS system?

Yes, the firm-fixed-price (FFP) contract type is specifically designed to mitigate risks related to cost overruns for the buyer. Under an FFP contract, the contractor, Lockheed Martin in this case, assumes the primary responsibility for all costs incurred in fulfilling the contract requirements. The agreed-upon price is fixed, regardless of the contractor's actual costs. This means that if Lockheed Martin experiences cost increases due to unforeseen issues, inefficiencies, or poor performance, those additional expenses will be absorbed by the contractor, not the Department of the Army. This structure provides significant cost certainty for the government, making the $12.6 million budget predictable. However, it's crucial that the initial price negotiated is fair and reflects realistic cost estimates, as the contractor will build in contingencies to cover potential risks, which could lead to a higher initial price compared to other contract types.

What is the historical spending context for advanced gunnery training systems within the Department of Defense, and how does this $12.6M contract compare?

Historical spending on advanced gunnery training systems within the Department of Defense (DoD) is substantial, reflecting the continuous need to maintain and enhance crew proficiency across various platforms (e.g., tanks, aircraft, ships). Contracts for such systems can range widely, from a few million dollars for specific component upgrades or software enhancements to tens or even hundreds of millions for comprehensive, full-mission simulators or large-scale training solutions. The $12.6 million awarded to Lockheed Martin for the T-AGTS crew stations appears to be a moderate-sized contract within this domain. It suggests a focused procurement for a specific system or set of components rather than an overarching, enterprise-wide training solution. Without knowing the exact scope (number of units, specific features), direct comparison is difficult, but it falls within the typical range for acquiring specialized, high-technology training equipment for a particular military application.

Industry Classification

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

Product/Service Code: TRAINING AIDS AND DEVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W900KK23R0014

Offers Received: 1

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: $12,601,792

Exercised Options: $12,601,792

Current Obligation: $12,601,792

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $84,532

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline