DoD Awards $287M Sonar System Contract to Lockheed Martin, Raising Competition Concerns

Contract Overview

Contract Amount: $287,432,445 ($287.4M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2001-09-28

End Date: 2007-02-01

Contract Duration: 1,952 days

Daily Burn Rate: $147.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200112!018653!1700!BZ006 !NAVAL SEA SYSTEMS COMMAND !N0002401C6237 !A!N!*!N! !20010928!20031231!019710586!019710586!834951691!N!LOCKHEED MARTIN CORPORATION !9500 GOODWIN DR !MANASSAS !VA!20110!48952!683!51!MANASSAS !MANASSAS (CITY) !VIRGINIA !+000003604723!N!N!000000000000!AJ25!RDTE/MATH & COMPUTER SCIENCES - ENG/MANUF DEVEL !A7 !ELECTRONICS AND COMMUNICATION !2GST!AN/BSY-1 (V) SONAR !334111!*!*!3! ! ! !*!*!*!B!*!*!A! !D !U!R!1!001!N!1G!Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! !Y! ! !0001!

Place of Performance

Location: MANASSAS, PRINCE WILLIAM County, VIRGINIA, 20110

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $287.4 million to LOCKHEED MARTIN CORPORATION for work described as: 200112!018653!1700!BZ006 !NAVAL SEA SYSTEMS COMMAND !N0002401C6237 !A!N!*!N! !20010928!20031231!019710586!019710586!834951691!N!LOCKHEED MARTIN CORPORATION !9500 GOODWIN DR !MANASSAS !VA!20110!48952!683!51!MANASSAS !MANAS… Key points: 1. Significant contract value of $287.4 million awarded for AN/BSY-1 Sonar. 2. Sole-source award to Lockheed Martin raises questions about competition and potential price inflation. 3. Contract duration of 1952 days (over 5 years) indicates a long-term commitment. 4. The sector is Defense, specifically RDTE/MATH & COMPUTER SCIENCES - ENG/MANUF DEVEL, highlighting advanced technology procurement.

Value Assessment

Rating: questionable

The contract value of $287.4 million for an AN/BSY-1 Sonar system appears high given the lack of competitive bidding. Benchmarking against similar advanced sonar systems would be necessary to determine true value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Lockheed Martin. This lack of competition limits price discovery and may lead to higher costs for taxpayers.

Taxpayer Impact: The absence of competition in this sole-source award could result in inflated prices, directly impacting taxpayer funds allocated for defense.

Public Impact

Taxpayers may be overpaying for advanced sonar technology due to the lack of competitive bidding. The long contract duration suggests a critical need for this specific system, but also a prolonged period without competitive pressure. The award to a single large corporation raises concerns about market concentration and potential barriers for smaller, innovative firms.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for overpricing
Long contract duration

Positive Signals

Award to established defense contractor
Procurement of advanced technology

Sector Analysis

This contract falls within the Defense sector, specifically focusing on Research, Development, Test, and Evaluation (RDTE) for advanced electronics and communication systems. Spending in this area is critical for national security but requires careful oversight due to high costs and technological complexity.

Small Business Impact

The award to Lockheed Martin, a large prime contractor, does not provide direct benefit to small businesses. There is no indication of subcontracting plans for small businesses within this sole-source award.

Oversight & Accountability

The sole-source nature of this contract warrants increased oversight to ensure fair pricing and performance. The Department of Defense should provide justification for the lack of competition and monitor contract execution closely.

Related Government Programs

Electronic Computer Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competition
Potential for price gouging
Limited transparency
No small business set-aside
High contract value

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $287.4 million to LOCKHEED MARTIN CORPORATION. 200112!018653!1700!BZ006 !NAVAL SEA SYSTEMS COMMAND !N0002401C6237 !A!N!*!N! !20010928!20031231!019710586!019710586!834951691!N!LOCKHEED MARTIN CORPORATION !9500 GOODWIN DR !MANASSAS !VA!20110!48952!683!51!MANASSAS !MANASSAS (CITY) !VIRGINIA !+000003604723!N!N!000000000000!AJ25!RDTE/MATH & COMPUTER SCIENCES - ENG/MANUF DEVEL !A7 !ELECTRONICS AND COMMUNICATION !2GST!AN/BSY-1 (V) SONAR !334111!*!*!3! ! ! !*!*!*!B!*!*!A!

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 $287.4 million.

What is the period of performance?

Start: 2001-09-28. End: 2007-02-01.

What is the justification for awarding this contract on a sole-source basis instead of seeking competitive bids?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent national security needs that cannot be met by other sources. Without specific documentation, it is difficult to ascertain the precise reason, but it is crucial for the agency to provide a clear and verifiable rationale to ensure taxpayer funds are used appropriately and that competition was genuinely not feasible.

How will the government ensure fair pricing and prevent cost overruns in this sole-source contract?

In sole-source contracts, ensuring fair pricing relies heavily on robust government cost analysis, negotiation, and oversight. The government should conduct thorough audits of the contractor's cost proposals, benchmark against similar systems if possible, and implement strict performance metrics and award fee structures tied to cost control and efficiency. Regular reviews and transparent reporting are essential.

What is the long-term strategic value of the AN/BSY-1 Sonar system, and how does this contract contribute to it?

The AN/BSY-1 Sonar system likely represents a critical component of naval defense capabilities, potentially enhancing submarine detection and tracking. This contract's value and duration suggest it's essential for maintaining or upgrading these capabilities. The long-term strategic value lies in ensuring technological superiority and operational readiness for the fleet, though the cost-effectiveness remains a concern without competition.

Industry Classification

NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Electronic Computer Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › General Science and Technology R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 9500 GOODWIN DR, MANASSAS, VA, 20110

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline