DoD awards $30.7M for MK 48 Torpedo components to Lockheed Martin under full and open competition
Contract Overview
Contract Amount: $30,722,124 ($30.7M)
Contractor: Lockheed Martin Integrated Systems, LLC
Awarding Agency: Department of Defense
Start Date: 2007-12-18
End Date: 2013-11-26
Contract Duration: 2,170 days
Daily Burn Rate: $14.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: MK 48 HEAVYWEIGHT TORPEDO IMA PEARL HARBOR
Place of Performance
Location: VIRGINIA BEACH, VIRGINIA BEACH CITY County, VIRGINIA, 23454
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $30.7 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC for work described as: MK 48 HEAVYWEIGHT TORPEDO IMA PEARL HARBOR Key points: 1. Significant investment in advanced torpedo technology for naval defense. 2. Lockheed Martin is a major defense contractor, indicating established capabilities. 3. Cost-plus fixed-fee contract type may lead to cost overruns. 4. Engineering services sector supports complex defense systems development.
Value Assessment
Rating: fair
The contract's cost-plus fixed-fee structure, while allowing for flexibility in complex projects, can present a risk of cost escalation. Benchmarking against similar torpedo development or production contracts would be necessary for a more precise value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Full and open competition was utilized, suggesting a robust price discovery process. However, the cost-plus fixed-fee nature of the award might still allow for costs to exceed initial estimates.
Taxpayer Impact: Taxpayer funds are supporting critical defense procurement. The effectiveness of competition and contract type in controlling costs will determine the ultimate taxpayer impact.
Public Impact
Enhances naval warfare capabilities with advanced torpedo technology. Supports high-tech manufacturing and engineering jobs within the defense sector. Ensures readiness of naval forces through critical equipment acquisition.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus fixed-fee contract type.
- Lack of specific per-unit cost data.
- Long contract duration.
Positive Signals
- Full and open competition.
- Award to established defense contractor.
Sector Analysis
This contract falls within the defense engineering services sector, which is characterized by complex, high-value procurements for specialized military applications. Spending in this area is driven by national security priorities and technological advancements.
Small Business Impact
The data indicates the prime contractor is Lockheed Martin, a large business. There is no information provided on subcontracting to small businesses for this specific award.
Oversight & Accountability
The contract was managed by the Defense Contract Management Agency, responsible for ensuring contractor performance and compliance. Further oversight would involve tracking cost performance and delivery schedules.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Cost-plus fixed-fee contract.
- Potential for cost overruns.
- Lack of specific per-unit cost data for benchmarking.
- Long contract duration may indicate complexity or potential delays.
Tags
engineering-services, department-of-defense, va, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $30.7 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC. MK 48 HEAVYWEIGHT TORPEDO IMA PEARL HARBOR
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $30.7 million.
What is the period of performance?
Start: 2007-12-18. End: 2013-11-26.
What is the estimated cost per torpedo unit, and how does it compare to industry benchmarks for similar systems?
The provided data does not specify a per-unit cost for the MK 48 torpedo components. The total award is $30.7 million over a 2170-day period. To assess value, this total cost would need to be divided by the number of units delivered, and then compared to benchmarks for advanced torpedo systems, which can vary significantly based on technological sophistication and production volume.
What are the primary risks associated with the cost-plus fixed-fee contract type for this torpedo acquisition?
The primary risk of a cost-plus fixed-fee (CPFF) contract is that the contractor is reimbursed for all allowable costs plus a fixed fee representing profit. This structure can incentivize cost overruns, as the contractor may not have a strong financial incentive to control expenses beyond what is necessary to achieve the fixed fee. Effective government oversight is crucial to manage these risks.
How effectively does the full and open competition process ensure optimal value for taxpayer dollars in acquiring advanced defense systems like torpedoes?
Full and open competition is designed to foster a competitive environment, theoretically leading to better pricing and innovation. However, for highly specialized defense systems like torpedoes, the number of capable bidders may be limited. While competition is a positive signal, the CPFF contract type introduces cost control risks that could offset some of the value realized through competition.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: N0002407R3305
Offers Received: 4
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: 1293 PERIMETER PKWY, VIRGINIA BEACH, VA, 23454
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $107,165,183
Exercised Options: $41,123,891
Current Obligation: $30,722,124
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0017804D4079
IDV Type: IDC
Timeline
Start Date: 2007-12-18
Current End Date: 2013-11-26
Potential End Date: 2013-11-26 00:00:00
Last Modified: 2018-09-19
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