Lockheed Martin awarded $137M for aviation applied technology R&D, with a 4-year contract duration

Contract Overview

Contract Amount: $13,708,113 ($13.7M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2006-03-31

End Date: 2009-12-31

Contract Duration: 1,371 days

Daily Burn Rate: $10.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200608!000040!2100!W911W6!AVIATION APPLIED TECHNOLOGY !W911W606C0040 !A!N! !N! ! !20060331!20081231!002232973!002232973!834951691!N!LOCKHEED MARTIN CORPORATION !1801 STATE ROUTE 17C !OWEGO !NY!13827!55882!107!36!OWEGO !TIOGA !NEW YORK !+000001762000!N!N!000000000000!AC13!RDTE/AIRCRAFT-ADV TECH DEV !A1C!OTHER AIRCRAFT EQUIPMENT !000 !NOT DISCERNABLE !541710!E! !3! ! ! ! ! !99990909!B! ! !A! !A!N!U!2!004!B! !A!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!D!N! ! ! !Y! ! !0001! !

Place of Performance

Location: OWEGO, TIOGA County, NEW YORK, 13827, UNITED STATES OF AMERICA

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $13.7 million to LOCKHEED MARTIN CORPORATION for work described as: 200608!000040!2100!W911W6!AVIATION APPLIED TECHNOLOGY !W911W606C0040 !A!N! !N! ! !20060331!20081231!002232973!002232973!834951691!N!LOCKHEED MARTIN CORPORATION !1801 STATE ROUTE 17C !OWEGO !NY!13827!55882!107!36!OWEGO !TIOG… Key points: 1. Contract focused on advanced technology development for aviation, indicating a need for cutting-edge solutions. 2. The award to Lockheed Martin suggests a reliance on established aerospace contractors for complex R&D. 3. A 4-year duration points to a significant, long-term research and development effort. 4. The contract's R&D nature implies potential for future technological advancements and applications. 5. The specific Public Service Code (PSC) AC13 highlights a focus on aircraft research and development. 6. The North American Industry Classification System (NAICS) code 541710 confirms the contract's alignment with R&D services.

Value Assessment

Rating: fair

The contract value of approximately $137 million over four years averages to about $34 million annually. Benchmarking this against similar large-scale R&D contracts in the aerospace sector is challenging without more specific project details. However, for advanced aviation technology development, this figure appears within a plausible range, though a detailed cost breakdown would be necessary for a definitive value-for-money assessment. The Cost Plus Fixed Fee (CPFF) contract type suggests that while the fee is fixed, the costs are subject to change, which can introduce some risk regarding the final expenditure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of four bids suggests a competitive environment, which is generally favorable for price discovery and achieving better value. However, the specific details of the competition, such as the evaluation criteria and the number of technically acceptable proposals, are not provided, making it difficult to fully assess the intensity of the competition.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages multiple companies to bid, potentially driving down costs and ensuring the government receives competitive pricing for its R&D investments.

Public Impact

The primary beneficiaries are likely the Department of Defense and potentially other government agencies that will utilize the advanced aviation technologies developed. The contract delivers research and development services aimed at advancing aviation technology, which could lead to improved military capabilities or civilian applications. The geographic impact is primarily centered around Lockheed Martin's facilities in Owego, NY, and the broader aerospace industry supply chain. Workforce implications include employment for scientists, engineers, technicians, and support staff involved in the R&D process.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contracts can sometimes lead to cost overruns if not managed tightly, as the contractor is reimbursed for allowable costs.
The specific nature of 'Aviation Applied Technology' is broad and could encompass a wide range of R&D efforts, making it difficult to assess specific risks without further detail.
Reliance on a single large contractor like Lockheed Martin for critical R&D may limit future flexibility or innovation from smaller, specialized firms.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
Lockheed Martin is a well-established aerospace and defense contractor with a proven track record in R&D.
The contract duration of over three years indicates a commitment to a significant technological advancement.
The contract is for Research and Development, which has the potential for significant long-term benefits and innovation.

Sector Analysis

The aerospace and defense sector is characterized by high R&D investment, long product development cycles, and significant government procurement. This contract falls squarely within the 'Aircraft Equipment' sub-sector, specifically focusing on advanced technology development. The market for such specialized R&D is dominated by a few large, established prime contractors like Lockheed Martin, often working on complex, high-value projects. Comparable spending benchmarks would typically be found within the Department of Defense's overall R&D budget for aviation and aerospace systems.

Small Business Impact

This contract does not appear to have a specific small business set-aside. Given the nature of advanced aviation technology R&D and the prime contractor being Lockheed Martin, it is likely that any small business involvement would be through subcontracting opportunities. The extent of small business participation would depend on Lockheed Martin's subcontracting plan and the availability of specialized small businesses capable of contributing to this advanced R&D effort.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are embedded within the Cost Plus Fixed Fee structure, requiring detailed cost reporting and adherence to technical specifications. Transparency is generally maintained through contract award databases and reporting requirements, though specific R&D project details may be sensitive.

Related Government Programs

Advanced Aviation Technology Development Programs
Department of Defense Research and Development Contracts
Aerospace Engineering Services
Aircraft Systems Research
Lockheed Martin Corporation Contracts

Risk Flags

Cost Plus Fixed Fee contract type may lead to cost overruns.
R&D projects inherently carry technical uncertainty and risk of failure.
Contract duration exceeds three years, increasing risk of obsolescence or changing requirements.
Specific details of 'applied technology' are not fully discernible, limiting risk assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.7 million to LOCKHEED MARTIN CORPORATION. 200608!000040!2100!W911W6!AVIATION APPLIED TECHNOLOGY !W911W606C0040 !A!N! !N! ! !20060331!20081231!002232973!002232973!834951691!N!LOCKHEED MARTIN CORPORATION !1801 STATE ROUTE 17C !OWEGO !NY!13827!55882!107!36!OWEGO !TIOGA !NEW YORK !+000001762000!N!N!000000000000!AC13!RDTE/AIRCRAFT-ADV TECH DEV !A1C!OTHER AIRCRAFT EQUIPMENT !000 !NOT DISCERNABLE !541710!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $13.7 million.

What is the period of performance?

Start: 2006-03-31. End: 2009-12-31.

What is Lockheed Martin's track record with similar aviation R&D contracts?

Lockheed Martin has an extensive and well-documented track record in aviation and aerospace research and development. They are a prime contractor on numerous advanced technology programs for the Department of Defense and other government agencies, including significant work on fighter jets, transport aircraft, and unmanned aerial systems. Their history includes developing cutting-edge technologies in areas such as stealth, avionics, propulsion, and materials science. While specific details of past aviation R&D contracts are often classified or proprietary, Lockheed Martin's consistent role as a major player in this field suggests a high level of expertise and capability. Their performance on previous contracts, while generally strong, has also faced scrutiny at times, as is common with large, complex defense programs. Analyzing their past performance on similar Cost Plus Fixed Fee R&D contracts would provide further insight into their ability to manage costs and deliver results within defined technical parameters.

How does the $137 million contract value compare to other aviation R&D efforts?

The $137 million contract value for aviation applied technology R&D over approximately four years represents a substantial investment. To benchmark this effectively, one would need to compare it against similar large-scale, advanced R&D initiatives within the aerospace and defense sector. For instance, the development of new aircraft platforms or major upgrades to existing systems often involves R&D budgets in the hundreds of millions or even billions of dollars. This particular contract, focusing on 'applied technology,' suggests it might be geared towards specific technological advancements rather than the full development of a new aircraft. Therefore, while significant, it may be a component of a larger strategic initiative. Comparing it to other contracts under the same NAICS code (541710) and PSC (AC13) awarded by the Department of Defense would provide a more direct comparison point for assessing its relative scale and investment level.

What are the primary risks associated with this specific contract?

The primary risks associated with this contract stem from its nature as a Cost Plus Fixed Fee (CPFF) Research and Development (R&D) effort. For CPFF contracts, there is a risk of cost overruns if the contractor's actual costs exceed initial estimates, although the fixed fee provides a ceiling on the contractor's profit. R&D projects inherently carry technical risks; the desired technological advancements may prove more difficult or impossible to achieve within the allocated budget and timeline. Furthermore, the 'applied technology' aspect implies that the outcomes might be experimental, with no guarantee of successful transition to production or operational use. Dependence on a single large contractor like Lockheed Martin also presents a risk of vendor lock-in and potentially less competitive pricing in future related procurements. Finally, the duration of the contract (over three years) increases the risk of changing technological landscapes or evolving mission requirements rendering the R&D less relevant by its completion.

How effective is the 'full and open competition' approach for this type of R&D contract?

The 'full and open competition' approach is generally considered the most effective method for ensuring fair pricing and maximizing value for taxpayers, especially for R&D contracts where innovation and diverse solutions are sought. By allowing all responsible sources to submit bids, the government can leverage a wider pool of potential contractors, fostering innovation and potentially uncovering novel approaches. In this case, with four bids received, it suggests a competitive marketplace for aviation applied technology R&D. However, the effectiveness is contingent on the clarity of the solicitation, the evaluation criteria, and the government's ability to assess complex technical proposals. For highly specialized R&D, 'full and open' might still result in awards to a few large, incumbent contractors due to their established expertise and infrastructure, but it provides the best opportunity to identify the most capable and cost-effective solution available in the market.

What are the historical spending patterns for aviation applied technology R&D within the Department of Defense?

Historical spending patterns for aviation applied technology R&D within the Department of Defense (DoD) show a consistent and significant investment over decades. The DoD prioritizes advancements in aviation for maintaining technological superiority. Spending in this area fluctuates based on strategic priorities, emerging threats, and technological breakthroughs. Major programs like the development of next-generation fighter jets (e.g., F-35, F-22), advanced unmanned systems, and improvements in aircraft survivability and performance have historically driven substantial R&D expenditures. Contracts awarded under PSC AC13 and NAICS 541710, particularly those with prime contractors like Lockheed Martin, represent a portion of this broader investment. Analyzing historical data reveals a trend of sustained funding for aviation R&D, often characterized by large, multi-year contracts awarded through competitive processes, reflecting the long development cycles and high costs associated with aerospace innovation.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

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

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline