Over $41.7 million awarded to Lockheed Martin for aerostat engineering and technical support for persistent threat detection

Contract Overview

Contract Amount: $41,715,889 ($41.7M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2013-09-26

End Date: 2014-09-25

Contract Duration: 364 days

Daily Burn Rate: $114.6K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THIS TASK ORDER (TO) IDENTIFIES THE SERVICES REQUIRED FOR PERSISTENT THREAT DETECTION SYSTEM (PTDS) ENGINEERING AND TECHNICAL SUPPORT PROVIDING THE FOLLOWING AEROSTAT ENGINEERING AND TECHNICAL SERVICES: ENGINEERING SERVICES, ABOVE USER-LEVEL MAINTENANCE TO INCLUDE IN THEATER REPAIR SERVICES, AND LOGISTICS SUPPORT FOR EXISTING AEROSTAT SYSTEMS AND EQUIPMENT AND NEW SYSTEMS.

Place of Performance

Location: AKRON, SUMMIT County, OHIO, 44315

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $41.7 million to LOCKHEED MARTIN CORPORATION for work described as: THIS TASK ORDER (TO) IDENTIFIES THE SERVICES REQUIRED FOR PERSISTENT THREAT DETECTION SYSTEM (PTDS) ENGINEERING AND TECHNICAL SUPPORT PROVIDING THE FOLLOWING AEROSTAT ENGINEERING AND TECHNICAL SERVICES: ENGINEERING SERVICES, ABOVE USER-LEVEL MAINTENANCE TO INCLUDE IN THEATER REPA… Key points: 1. Contract provides essential engineering, maintenance, and logistics for aerostat systems used in threat detection. 2. Sole-source award raises questions about potential for higher costs and limited innovation. 3. Duration of one year suggests a need for ongoing support and potential for future task orders. 4. Focus on existing systems indicates a reliance on current technology rather than new development. 5. Geographic focus on Ohio for this specific task order. 6. Cost-plus-fixed-fee contract type may incentivize cost overruns if not closely monitored.

Value Assessment

Rating: fair

This contract's value is difficult to benchmark without comparable sole-source awards for similar aerostat engineering services. The cost-plus-fixed-fee structure means the final cost is not fixed upfront, making it harder to assess value for money compared to fixed-price contracts. However, the services provided are critical for national security, suggesting a baseline necessity for this expenditure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor, Lockheed Martin Corporation, was solicited. This limits competition and may result in less favorable pricing and terms for the government compared to a fully competed contract. The absence of multiple bids prevents a clear understanding of the market's competitive landscape for these specialized services.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government lacks the leverage of competitive bidding to drive down prices.

Public Impact

The Department of the Army benefits from continued operational readiness of its persistent threat detection systems. Services ensure the functionality and maintenance of aerostat systems crucial for surveillance and intelligence gathering. The geographic impact is noted as Ohio, where the contractor is located or services are performed. Workforce implications include specialized engineering and technical roles required for aerostat maintenance and support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost-plus-fixed-fee structure can lead to cost escalations if not managed tightly.
Lack of competition may stifle innovation in aerostat technology and support.
Contract duration is relatively short, potentially leading to frequent re-solicitations or extensions.

Positive Signals

Addresses critical national security needs for persistent threat detection.
Leverages established expertise of a known contractor for specialized systems.
Ensures continued operational capability of vital surveillance assets.

Sector Analysis

The Persistent Threat Detection System (PTDS) falls within the aerospace and defense sector, specifically focusing on surveillance and intelligence gathering technologies. This contract supports the manufacturing and maintenance of aerostat systems, which are lighter-than-air platforms used for persistent surveillance. The market for such specialized systems is often dominated by a few large defense contractors due to high research and development costs and stringent security requirements. Comparable spending would likely be within the broader intelligence, surveillance, and reconnaissance (ISR) systems procurement category.

Small Business Impact

This contract does not appear to have a small business set-aside. As a sole-source award to a large prime contractor, it is unlikely to directly benefit small businesses through prime contract opportunities. However, Lockheed Martin may engage small businesses as subcontractors, though the extent of this is not detailed in the provided data. The absence of a set-aside means opportunities for small businesses to compete directly for this specific requirement are limited.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. As a cost-plus-fixed-fee contract, rigorous financial oversight and auditing are crucial to ensure costs are reasonable and allocable. Transparency is generally maintained through contract reporting mechanisms, but the sole-source nature limits public visibility into the justification for the award. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Intelligence, Surveillance, and Reconnaissance (ISR) Systems
Aerospace and Defense Manufacturing
Department of the Army Procurement
Persistent Surveillance Technologies

Risk Flags

Sole-source award lacks competitive justification.
Cost-plus-fixed-fee contract type poses risk of cost overruns.
Limited public data on contractor performance for this specific task order.
Potential for reduced innovation due to lack of competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.7 million to LOCKHEED MARTIN CORPORATION. THIS TASK ORDER (TO) IDENTIFIES THE SERVICES REQUIRED FOR PERSISTENT THREAT DETECTION SYSTEM (PTDS) ENGINEERING AND TECHNICAL SUPPORT PROVIDING THE FOLLOWING AEROSTAT ENGINEERING AND TECHNICAL SERVICES: ENGINEERING SERVICES, ABOVE USER-LEVEL MAINTENANCE TO INCLUDE IN THEATER REPAIR SERVICES, AND LOGISTICS SUPPORT FOR EXISTING AEROSTAT SYSTEMS AND EQUIPMENT AND NEW SYSTEMS.

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 $41.7 million.

What is the period of performance?

Start: 2013-09-26. End: 2014-09-25.

What is Lockheed Martin's track record with similar aerostat engineering and technical support contracts?

Lockheed Martin Corporation has a significant history of providing complex engineering, manufacturing, and support services for defense systems, including aerostats. They have been a key player in the development and sustainment of various surveillance platforms. While specific details on past aerostat support contracts are not provided here, their extensive experience in aerospace and defense suggests a strong capability. However, the performance metrics and value delivered on previous, similar sole-source contracts would be crucial for a comprehensive assessment of their track record in this specific domain.

How does the $41.7 million cost compare to market rates for similar aerostat engineering services?

Benchmarking the $41.7 million cost is challenging due to the sole-source nature of this contract and the specialized, niche market for aerostat engineering and technical support. Without competitive bids, it's difficult to establish a true market rate. Typically, sole-source contracts, especially cost-plus-fixed-fee, can be more expensive than competitively awarded fixed-price contracts. A thorough value assessment would require comparing this contract's scope, duration, and deliverables against any available data on similar sole-source procurements or internal cost estimates if available.

What are the primary risks associated with this sole-source, cost-plus-fixed-fee contract?

The primary risks associated with this contract are related to its acquisition strategy and contract type. The sole-source nature eliminates competitive pressure, potentially leading to higher costs and reduced incentive for the contractor to innovate or optimize performance. The cost-plus-fixed-fee structure carries the risk of cost overruns, as the government agrees to cover allowable costs plus a negotiated fixed fee. Effective oversight is critical to mitigate these risks, ensuring that costs are reasonable and that the contractor remains focused on delivering the required services efficiently.

How effective are aerostat systems in persistent threat detection compared to other technologies?

Aerostat systems offer unique advantages for persistent threat detection, particularly in providing long-endurance, wide-area surveillance from a stable, elevated platform. They can remain airborne for extended periods, offering continuous monitoring capabilities that are often more cost-effective and less logistically demanding than comparable manned or unmanned aircraft systems for certain missions. However, their effectiveness can be limited by weather conditions, vulnerability to attack, and range limitations compared to satellite-based systems. Their suitability depends heavily on the specific operational requirements, threat environment, and desired coverage area.

What has been the historical spending trend for aerostat engineering and technical support within the Department of the Army?

Historical spending on aerostat engineering and technical support within the Department of the Army has likely fluctuated based on strategic priorities, technological advancements, and operational needs. While specific aggregate data for this niche category isn't provided, the Army has historically invested in persistent surveillance capabilities, including aerostats, particularly in response to evolving threats in complex operational environments. Spending trends would reflect the lifecycle of aerostat programs, from initial procurement and development to sustainment and upgrades. Increased focus on ISR capabilities in recent decades suggests a sustained, if not growing, investment in related technologies and support services.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 1210 MASSILLIN RD, AKRON, OH, 44315

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: $41,715,889

Exercised Options: $41,715,889

Current Obligation: $41,715,889

Subaward Activity

Number of Subawards: 10

Total Subaward Amount: $6,198,618

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W15P7T13DC111

IDV Type: IDC

Timeline