Naval Sea Systems Command awards $1.02B contract for ship research and development to Lockheed Martin

Contract Overview

Contract Amount: $1,020,245,287 ($1.0B)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2003-07-17

End Date: 2016-07-30

Contract Duration: 4,762 days

Daily Burn Rate: $214.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200310!035938!1700!BZ002 !NAVAL SEA SYSTEMS COMMAND !N0002403C2311 !A!N! !N! !20030717!20040217!848028494!834951691!834951691!N!LOCKHEED MARTIN CORPORATION !199 BORTON LANDING ROAD !MOORESTOWN !NJ!08057!50000!001!11!WASHINGTON !DISTRICT OF COLUMBIA !D.C. !+000007000000!N!N!000009993359!AC31!RDTE/SHIPS-BASIC RESEARCH !A3 !SHIPS !2000!NOT DISCERNABLE OR CLASSIFIED !336611!E! !3! ! ! ! ! !99990909!B! ! !A! !A!N!J!2!006!B! !Z!N!A! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: MOORESTOWN, BURLINGTON County, NEW JERSEY, 08057

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $1.02 billion to LOCKHEED MARTIN CORPORATION for work described as: 200310!035938!1700!BZ002 !NAVAL SEA SYSTEMS COMMAND !N0002403C2311 !A!N! !N! !20030717!20040217!848028494!834951691!834951691!N!LOCKHEED MARTIN CORPORATION !199 BORTON LANDING ROAD !MOORESTOWN !NJ!08057!50000!001!11!WASHINGTON !DISTR… Key points: 1. Contract awarded for ship research, development, testing, and evaluation. 2. Significant investment in naval technology and platform advancement. 3. Long-term contract duration suggests sustained program needs. 4. Focus on basic research within the shipbuilding sector. 5. Potential for follow-on work and broader naval modernization efforts.

Value Assessment

Rating: good

The contract value of $1.02 billion over its life is substantial, reflecting the complexity and long-term nature of naval research and development. Benchmarking against similar R&D contracts in the defense sector is challenging due to the specialized nature of ship-based research. However, the firm-fixed-price structure suggests an expectation of cost control by the government, though the extensive duration may introduce cost escalation risks.

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 had the opportunity to submit proposals. The presence of three bidders suggests a competitive environment, which typically benefits the government by driving down prices and encouraging innovation. The specific details of the competition, such as the number of proposals received and the evaluation criteria, are not fully detailed here but the initial award was competitive.

Taxpayer Impact: Full and open competition generally leads to better value for taxpayers by ensuring that the government receives the most advantageous offers. It prevents sole-source situations that could lead to inflated prices.

Public Impact

Benefits the U.S. Navy by advancing shipbuilding technologies and capabilities. Delivers critical research and development services for naval platforms. Impacts the defense industrial base, particularly in shipbuilding and advanced manufacturing. Supports a highly skilled workforce in engineering, research, and development within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration may lead to cost overruns if not managed effectively.
Potential for scope creep in R&D projects if requirements are not clearly defined.
Reliance on a single prime contractor for critical R&D could pose supply chain risks.

Positive Signals

Awarded through full and open competition, suggesting competitive pricing.
Firm-fixed-price contract type provides cost certainty for the government.
Lockheed Martin is a major defense contractor with extensive experience in naval systems.
Contract supports critical national defense objectives in naval power.

Sector Analysis

This contract falls within the Defense sector, specifically focusing on Research, Development, Testing, and Evaluation (RDTE) for ships. The shipbuilding and repair industry is a significant segment of the defense industrial base, characterized by high barriers to entry, complex supply chains, and substantial government investment. Spending in this area is crucial for maintaining naval superiority and technological advantage.

Small Business Impact

While this contract was awarded to a large prime contractor, Lockheed Martin, there are often subcontracting opportunities for small businesses within the defense industrial base. The extent to which small businesses will participate in this specific R&D effort is not detailed, but large prime contractors are typically required to meet small business subcontracting goals.

Oversight & Accountability

Oversight for this contract would primarily fall under the Naval Sea Systems Command (NAVSEA) and the Defense Contract Management Agency (DCMA). These entities are responsible for monitoring contractor performance, ensuring compliance with contract terms, and managing financial expenditures. Transparency is generally maintained through contract reporting mechanisms, though specific R&D details might be classified or proprietary.

Related Government Programs

Naval Ship Systems
Shipbuilding and Repair
Defense Research and Development
Naval Technology Advancement
Advanced Manufacturing

Risk Flags

Long contract duration increases risk of cost escalation.
R&D projects can face unforeseen technical challenges impacting schedule.
Potential for scope creep in basic research if not tightly managed.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $1.02 billion to LOCKHEED MARTIN CORPORATION. 200310!035938!1700!BZ002 !NAVAL SEA SYSTEMS COMMAND !N0002403C2311 !A!N! !N! !20030717!20040217!848028494!834951691!834951691!N!LOCKHEED MARTIN CORPORATION !199 BORTON LANDING ROAD !MOORESTOWN !NJ!08057!50000!001!11!WASHINGTON !DISTRICT OF COLUMBIA !D.C. !+000007000000!N!N!000009993359!AC31!RDTE/SHIPS-BASIC RESEARCH !A3 !SHIPS !2000!NOT DISCERNABLE OR CLASSIFIED !336611!E! !3! ! ! ! ! !99990909!B

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 $1.02 billion.

What is the period of performance?

Start: 2003-07-17. End: 2016-07-30.

What is the specific nature of the 'basic research' being conducted under this contract?

The contract specifies 'RDTE/SHIPS-BASIC RESEARCH' and 'SHIPS' as the product service code and subject area, respectively. Basic research in this context typically refers to investigations aimed at acquiring new knowledge and understanding, without specific commercial or military applications in view. For naval applications, this could encompass fundamental studies in hydrodynamics, materials science for marine environments, advanced propulsion concepts, or novel sensor technologies applicable to naval platforms. The exact scope is likely detailed in the contract's statement of work, which is not publicly available but would guide Lockheed Martin's research efforts towards advancing foundational understanding relevant to future naval capabilities.

How does the $1.02 billion value compare to typical R&D spending for naval systems?

The $1.02 billion value for this contract is substantial and indicative of a significant, long-term investment in naval research and development. Comparing it directly to 'typical' R&D spending is complex, as R&D budgets fluctuate based on strategic priorities, technological advancements, and the lifecycle of naval platforms. However, major defense contractors like Lockheed Martin often secure large R&D contracts that span many years, reflecting the lengthy development cycles for advanced military systems. This figure suggests a high level of commitment from the Department of Defense towards innovation in naval technology, potentially encompassing multiple research areas or a particularly ambitious foundational research program.

What are the key performance indicators (KPIs) or milestones expected from Lockheed Martin under this contract?

Specific Key Performance Indicators (KPIs) and milestones for this contract are not detailed in the provided data. However, for a research and development contract of this nature, typical milestones would likely include the delivery of research reports, prototypes, feasibility studies, technical demonstrations, and potentially the development of new methodologies or scientific principles. Performance would be assessed based on the successful completion of these deliverables within the agreed-upon timelines and adherence to the technical requirements outlined in the contract's statement of work. The Naval Sea Systems Command would be responsible for monitoring progress against these milestones.

What is Lockheed Martin's track record with similar naval R&D contracts?

Lockheed Martin has an extensive and well-established track record in performing complex research, development, testing, and evaluation (RDT&E) for the U.S. Navy and other Department of Defense agencies. They are a prime contractor on numerous major naval programs, including shipbuilding, combat systems, and advanced technologies. Their experience spans decades and includes significant contributions to naval aviation, surface combatants, and undersea warfare. Given their deep involvement in the defense sector and specific expertise in naval systems, they are a logical choice for large-scale R&D initiatives aimed at advancing naval capabilities.

Are there any identified risks associated with this contract, such as cost overruns or schedule delays?

Research and Development contracts, especially those with long durations like this one (initial award in 2003 with an end date in 2016, suggesting potential modifications or extensions), inherently carry risks of cost overruns and schedule delays. Unforeseen technical challenges, evolving requirements, or difficulties in integrating new technologies can impact both budget and timeline. The firm-fixed-price nature of the contract aims to mitigate cost risks for the government, but the extensive scope of R&D means that careful management and oversight are crucial to prevent significant deviations from the planned expenditure and delivery schedule.

How does this contract contribute to the overall modernization of the U.S. Navy's fleet?

This contract plays a crucial role in the long-term modernization of the U.S. Navy's fleet by investing in foundational research that underpins future technological advancements. While 'basic research' may not yield immediate deployable systems, the knowledge and innovations generated can lead to breakthroughs in areas such as next-generation propulsion, advanced materials for hull construction, improved sensor capabilities, enhanced electronic warfare systems, and more efficient operational concepts. By funding this type of forward-looking R&D, the Navy aims to maintain its technological edge and ensure its future fleet is equipped with the most advanced and capable platforms available.

Industry Classification

NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 199 BORTON LANDING ROAD, MOORESTOWN, NJ, 08057

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline