DoD awards $123M contract for armament training devices to Lockheed Martin, highlighting a 3-bid competition

Contract Overview

Contract Amount: $12,300,414 ($12.3M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2005-05-17

End Date: 2015-04-27

Contract Duration: 3,632 days

Daily Burn Rate: $3.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200508!800030!1700!M67854!COMMANDING GENERAL !M6785405C8002 !A!N! !N! !P00002!20050517!20100323!041512187!041512187!834951691!N!LOCKHEED MARTIN CORPORATION !4000 SOUTH MEMORIAL PARKWA!HUNTSVILLE !AL!35802!37000!089!01!HUNTSVILLE !MADISON !ALABAMA !+000000013440!N!N!000000000000!6920!ARMAMENT TRAINING DEVICES !C9E!ALL OTHER SUPPLIES AND EQUIPMENT !000 !* !339999!E! !3! ! !C! ! !20200930!B! ! !A! !A!N!J!2!003!A! !A!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! ! !1727!M67854!0001! !

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35802, UNITED STATES OF AMERICA

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $12.3 million to LOCKHEED MARTIN CORPORATION for work described as: 200508!800030!1700!M67854!COMMANDING GENERAL !M6785405C8002 !A!N! !N! !P00002!20050517!20100323!041512187!041512187!834951691!N!LOCKHEED MARTIN CORPORATION !4000 SOUTH MEMORIAL PARKWA!HUNTSVILLE !AL!35802!37000!089!01!HUNTSVILLE !MADI… Key points: 1. The contract value of $123 million represents a significant investment in defense training capabilities. 2. Competition dynamics indicate a healthy market with three bidders vying for this significant award. 3. The firm-fixed-price contract type suggests a clear understanding of scope and cost expectations. 4. This award falls within the 'All Other Miscellaneous Manufacturing' category, indicating specialized defense production. 5. The contract duration of over 10 years (3632 days) points to a long-term need for these training devices. 6. The geographic location of the contractor in Huntsville, Alabama, is a hub for aerospace and defense industries.

Value Assessment

Rating: good

The contract value of $123 million for armament training devices appears reasonable given the long duration and specialized nature of the product. Benchmarking against similar, long-term defense training system contracts suggests that this price point is within expected ranges for complex, high-value systems. The firm-fixed-price structure also implies that the government has secured predictable costs over the contract's life, which is a positive indicator of value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with three bids received. The presence of multiple bidders suggests a competitive environment where contractors are incentivized to offer competitive pricing and innovative solutions. The fact that three distinct entities submitted proposals indicates that the market for these specific armament training devices is accessible and that potential suppliers were aware of and able to respond to the government's requirements.

Taxpayer Impact: A full and open competition with multiple bidders generally leads to better price discovery and potentially lower costs for taxpayers compared to sole-source or limited competition scenarios.

Public Impact

The primary beneficiaries are the U.S. Army personnel who will utilize these advanced armament training devices to enhance their combat readiness and proficiency. The services delivered include the provision of specialized training equipment designed to simulate real-world combat scenarios safely and effectively. The geographic impact is national, as these training devices will likely be deployed at various military installations across the United States. Workforce implications include the potential for job creation and sustainment within Lockheed Martin's facilities and its supply chain, particularly in the Huntsville, Alabama area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to potential cost overruns if not managed effectively.
Reliance on a single contractor for a critical training capability might pose supply chain risks.
Technological obsolescence of training devices over a decade-long period is a concern.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Full and open competition suggests a robust market and competitive pricing.
Contractor's established presence in defense manufacturing indicates experience and capability.

Sector Analysis

The defense sector, particularly the segment focused on training and simulation, is a critical area for military readiness. This contract for armament training devices fits within the broader market for defense simulation and training systems, which is a multi-billion dollar industry. Companies like Lockheed Martin are major players in this space, leveraging advanced technologies to provide realistic training solutions. Spending in this area is often driven by the need to maintain a highly skilled military force while reducing the costs and risks associated with live-fire training.

Small Business Impact

There is no explicit indication of a small business set-aside for this contract. Given the prime contractor is Lockheed Martin, a large defense corporation, it is likely that any subcontracting opportunities would be directed towards small businesses as part of the contractor's overall small business subcontracting plan. The impact on the small business ecosystem would depend on the specific subcontracting goals and achievements outlined in the contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. Accountability measures are embedded within the firm-fixed-price contract terms, requiring delivery of specified training devices. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Armament Systems
Training Simulators
Defense Logistics Agency
Military Readiness Programs
Tactical Training Equipment

Risk Flags

Long contract duration increases risk of technological obsolescence.
Potential for cost creep if fixed-price contract doesn't account for inflation.
Dependence on a single contractor for critical training assets.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.3 million to LOCKHEED MARTIN CORPORATION. 200508!800030!1700!M67854!COMMANDING GENERAL !M6785405C8002 !A!N! !N! !P00002!20050517!20100323!041512187!041512187!834951691!N!LOCKHEED MARTIN CORPORATION !4000 SOUTH MEMORIAL PARKWA!HUNTSVILLE !AL!35802!37000!089!01!HUNTSVILLE !MADISON !ALABAMA !+000000013440!N!N!000000000000!6920!ARMAMENT TRAINING DEVICES !C9E!ALL OTHER SUPPLIES AND EQUIPMENT !000 !* !339999!E! !3! ! !C! ! !202

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 $12.3 million.

What is the period of performance?

Start: 2005-05-17. End: 2015-04-27.

What is Lockheed Martin's track record with similar armament training device contracts?

Lockheed Martin has a long and extensive history of developing and producing advanced training and simulation systems for various branches of the U.S. military. Their portfolio includes a wide range of simulators, from individual weapon trainers to complex flight and combat mission simulators. They have consistently been a major contractor in this domain, often securing large, multi-year contracts due to their technological capabilities and established manufacturing infrastructure. Their track record generally indicates a high level of technical proficiency and program execution, though like any large defense contractor, specific contract performance can vary. Past performance reviews and contract close-out data would provide more granular detail on their success rates with similar armament training device procurements.

How does the $123 million value compare to other armament training device contracts awarded by the DoD?

The $123 million contract value for armament training devices, awarded over a period of approximately 10 years, falls within a moderate to large range for specialized defense training equipment. Contracts for complex simulation systems can range from tens of millions to hundreds of millions of dollars, depending on the sophistication, quantity, and duration of support. For instance, major flight simulators or integrated combat training systems can easily exceed $100 million. Simpler, individual weapon trainers might be awarded at lower values. This specific contract's value appears aligned with procurements for substantial training systems that require significant research, development, and production efforts over an extended period, suggesting it is a significant but not unprecedented investment in this category.

What are the primary risks associated with a contract of this duration and type?

The primary risks associated with a long-duration contract like this ($123M over ~10 years) include technological obsolescence, where the training devices may become outdated before the contract ends, requiring costly upgrades or replacements. There's also the risk of contractor performance degradation over time, or potential cost growth if the firm-fixed-price structure doesn't adequately account for unforeseen economic factors or material cost fluctuations. Furthermore, a long-term reliance on a single contractor for critical training capabilities can create supply chain vulnerabilities and reduce flexibility for the government to adopt newer, potentially more effective technologies that emerge during the contract period. Programmatic risks also include potential shifts in military requirements or budget priorities that could impact the need for these specific devices.

How effective are armament training devices in improving soldier performance compared to live training?

Armament training devices are highly effective in improving soldier performance by providing a safe, repeatable, and cost-efficient alternative or supplement to live training. They allow soldiers to practice complex maneuvers, engage in high-risk scenarios, and develop muscle memory without the logistical burdens, safety concerns, and environmental impact associated with live ammunition and exercises. Studies and military doctrine consistently show that well-designed simulators enhance marksmanship, tactical decision-making, and team coordination. While they cannot fully replicate the sensory and psychological aspects of real combat, they offer a controlled environment to build foundational skills and refine tactics, ultimately leading to better preparedness and potentially reducing casualties during actual deployments. The integration of virtual and constructive simulations further enhances their utility.

What are the historical spending patterns for armament training devices within the Department of the Navy?

Historical spending patterns for armament training devices within the Department of the Navy (DoN) show a consistent and significant investment in simulation and training capabilities. The DoN, responsible for naval aviation, surface warfare, and amphibious operations, relies heavily on advanced training systems to prepare its personnel. Spending in this category typically fluctuates based on modernization cycles, new platform introductions, and evolving threat environments. Over the past decade, there has been a trend towards more immersive and technologically advanced virtual and constructive simulation systems. While specific figures vary annually, the DoN consistently allocates substantial portions of its procurement and RDT&E budgets to training systems, reflecting their critical role in maintaining operational readiness and technological superiority.

Industry Classification

NAICS: Manufacturing › Other Miscellaneous Manufacturing › All Other Miscellaneous Manufacturing

Product/Service Code: TRAINING AIDS AND DEVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 4000 SOUTH MEMORIAL PARKWA, HUNTSVILLE, AL, 35802

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

Contract Characteristics

Cost or Pricing Data: NO

Timeline