Navy awards $140M+ for Surface Combat Systems Training Support to Lockheed Martin, highlighting engineering services

Contract Overview

Contract Amount: $140,481,591 ($140.5M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2006-07-15

End Date: 2010-09-30

Contract Duration: 1,538 days

Daily Burn Rate: $91.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: CSCS/ATRC SURFACE COMBAT SYSTEMS TRAINING SUPPORT

Place of Performance

Location: CHESAPEAKE, CHESAPEAKE CITY County, VIRGINIA, 23320

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $140.5 million to LOCKHEED MARTIN CORPORATION for work described as: CSCS/ATRC SURFACE COMBAT SYSTEMS TRAINING SUPPORT Key points: 1. Contract value exceeds $140 million, indicating significant investment in naval training capabilities. 2. Awarded under full and open competition, suggesting a robust bidding process. 3. The contract type (Cost Plus Award Fee) allows for performance-based incentives. 4. Duration of over 1500 days points to a long-term strategic need for these services. 5. The primary NAICS code (541330) signifies a focus on engineering services for defense applications. 6. The awardee, Lockheed Martin, is a major defense contractor with extensive experience.

Value Assessment

Rating: good

The contract value of over $140 million for training support services appears substantial. Benchmarking against similar large-scale defense training contracts would be necessary for a precise value-for-money assessment. The Cost Plus Award Fee structure suggests an attempt to incentivize performance, which can be a positive indicator if managed effectively. However, without specific performance metrics or comparisons to industry benchmarks for similar training programs, a definitive assessment of cost efficiency is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited and considered. The presence of multiple bidders generally fosters price discovery and can lead to more competitive pricing for the government. The specific number of bidders is not provided, but the designation suggests a healthy competitive environment at the outset.

Taxpayer Impact: A full and open competition process is generally favorable for taxpayers as it increases the likelihood of obtaining services at a competitive price, maximizing the value of public funds.

Public Impact

Naval personnel will benefit from enhanced training for surface combat systems. Improved training capabilities can lead to increased operational readiness and effectiveness of naval forces. The services delivered are critical for maintaining and advancing the technical proficiency of sailors and officers. The contract's impact is primarily within the defense sector, supporting the U.S. Navy's mission. Workforce implications include employment opportunities for engineers, trainers, and support staff within the defense industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee contracts can sometimes lead to cost overruns if not closely monitored.
The long duration of the contract may present challenges in adapting to rapidly evolving technologies.
Reliance on a single large contractor for critical training support could pose a risk if performance falters.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
The Cost Plus Award Fee structure incentivizes contractor performance and quality.
Lockheed Martin's established track record in defense systems provides a degree of confidence in execution.

Sector Analysis

The defense training sector is a significant market driven by the continuous need for advanced capabilities and personnel readiness. This contract for surface combat systems training support fits within the broader engineering services and defense logistics market. Spending in this area is often substantial due to the complexity of modern military hardware and the high stakes involved in operational effectiveness. Comparable spending benchmarks would typically be found within large-scale defense procurement and sustainment contracts.

Small Business Impact

The provided data does not indicate any specific small business set-asides or subcontracting requirements for this contract. As a large prime contract awarded to a major defense corporation, the primary focus is likely on the prime contractor's capabilities. Further analysis would be needed to determine if small businesses are involved as subcontractors and their role in the overall service delivery.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. The Cost Plus Award Fee structure implies performance metrics that would be monitored to determine award fees. Transparency would be assessed through contract reporting mechanisms and potential Inspector General reviews, particularly concerning cost and performance.

Related Government Programs

Naval Training Systems
Surface Warfare Systems
Defense Engineering Services
Combat Systems Support
Military Simulation and Training

Risk Flags

Potential for cost growth under CPAF structure.
Risk of technological obsolescence over contract duration.
Need for rigorous performance monitoring to ensure value.
Dependence on a single large contractor for critical support.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $140.5 million to LOCKHEED MARTIN CORPORATION. CSCS/ATRC SURFACE COMBAT SYSTEMS TRAINING SUPPORT

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 Navy).

What is the total obligated amount?

The obligated amount is $140.5 million.

What is the period of performance?

Start: 2006-07-15. End: 2010-09-30.

What is Lockheed Martin's track record with similar Navy training support contracts?

Lockheed Martin has a long and extensive history of providing training and simulation services to the U.S. military, including the Navy. They are a prime contractor on numerous programs involving complex weapon systems, often including integrated training solutions. Their experience spans various platforms, from aircraft to naval vessels. For surface combat systems specifically, Lockheed Martin has been involved in the development and sustainment of systems like the Aegis Combat System, which inherently includes training components. While specific contract values and durations vary, their consistent presence as a major awardee in this domain suggests a recognized capability to meet the demanding requirements of naval training support. A deeper dive would involve examining past performance reviews and contract modifications for similar endeavors.

How does the $140M+ award compare to typical spending on surface combat systems training?

The $140 million award for surface combat systems training support is substantial and aligns with the significant investment required for advanced naval training. Large-scale training programs for complex platforms like destroyers or cruisers, which involve sophisticated simulation, curriculum development, and instructor support, often run into tens or hundreds of millions of dollars over their lifecycle. This contract's duration of over four years further supports its classification as a major program. Benchmarking against other Navy training contracts for similar platforms (e.g., Littoral Combat Ship training, carrier-based systems training) would provide a more precise comparison. However, given the scope implied by 'Surface Combat Systems,' this figure is within the expected range for comprehensive, long-term support.

What are the primary risks associated with a Cost Plus Award Fee (CPAF) contract of this magnitude?

The primary risks associated with a CPAF contract of this magnitude include potential cost growth and challenges in objective performance measurement. While CPAF aims to incentivize performance by allowing for award fees based on achieving certain criteria, the 'cost plus' element means the government pays the contractor's allowable costs plus a fee. If cost controls are weak or the award fee criteria are not clearly defined and rigorously assessed, costs can escalate beyond initial projections. There's also a risk that the contractor may focus on achieving easily measurable metrics to gain award fees, potentially neglecting less quantifiable but equally important aspects of training effectiveness. Effective oversight, robust auditing, and clear, measurable performance standards are crucial to mitigate these risks.

How effective is full and open competition in ensuring value for taxpayer money in defense training contracts?

Full and open competition is generally considered the most effective method for ensuring value for taxpayer money in defense training contracts. By soliciting bids from all responsible sources, the government maximizes the pool of potential offerors, fostering a competitive environment that drives down prices and encourages innovation. This process allows for a thorough comparison of technical approaches, past performance, and costs, enabling the selection of the best overall value. While complex training requirements can sometimes limit the number of truly capable bidders, the principle of open competition ensures that the government explores all viable options, thereby increasing the likelihood of securing high-quality services at a fair and reasonable price. It also promotes transparency and accountability.

What are the implications of a 1538-day contract duration for technological relevance?

A contract duration of 1538 days (approximately 4.2 years) for surface combat systems training support presents both opportunities and challenges regarding technological relevance. On the positive side, it allows for long-term planning, stable development of training curricula, and sustained support, which can lead to deeper expertise and more effective training outcomes. However, the defense technology landscape evolves rapidly. The risk is that the training systems and methodologies developed or supported under this contract could become outdated before the contract concludes. Mitigation strategies are essential, such as incorporating clauses for technology refresh, regular reviews of emerging technologies, and flexible contract modifications to adapt to new systems or threats. Without such provisions, the long duration could lead to supporting legacy systems or methods.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: EDUCATION AND TRAINING › EDUCATION AND TRAINING SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation ID: N0002406R3199

Offers Received: 2

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 9500 GODWIN DR, MANASSAS, VA, 20110

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $149,286,370

Exercised Options: $149,286,370

Current Obligation: $140,481,591

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4079

IDV Type: IDC

Timeline