The Naval Sea Systems Command (NAVSEA) awarded a $223,943,975 cost-plus-incentive-fee contract modification to Lockheed Martin Rotary and Mission Systems of Manassas, Virginia on June 15, 2026, extending engineering design, development, and production support for sound navigation and ranging (SONAR) systems used across the U.S. Navy fleet.
Background
Lockheed Martin's Rotary and Mission Systems division has been the prime contractor under contract N00024-20-C-6117, which covers the full engineering lifecycle for Navy SONAR equipment — from initial design through fielded production support. SONAR systems are core to undersea warfare capability, enabling surface ships and submarines to detect, track, and engage submerged threats. Maintaining continuous engineering support on these systems requires close collaboration between contractor engineering teams and Navy program offices, making long-term contract structures like this one standard practice for complex sensor programs.
The modification adds $223.9 million to the existing contract vehicle rather than standing up a new award, a common approach when the government needs to extend proven contractor performance on developmental programs without disrupting ongoing engineering work or program continuity.
Key Details
The modification covers engineering design, development, and production support for Navy SONAR systems across multiple work locations. Manassas, Virginia accounts for 65% of the contract work. Clearwater, Florida carries 32% of the workload, with smaller shares allocated to Syracuse, New York (2%) and Marion, Florida (1%).
Of the total contract value, 97% supports the U.S. Navy directly. The remaining 3% flows through the Foreign Military Sales program on behalf of Canada, reflecting an existing security cooperation arrangement under which Canada receives SONAR systems or associated engineering support aligned with U.S. Navy configurations.
Funding for the modification comes from three appropriations streams. The Navy obligated $19,814,440 from fiscal year 2026 Other Procurement (Navy) funds and $18,300,000 from fiscal year 2026 Shipbuilding and Conversion (Navy) funds at the time of award. Canada's FMS portion contributed an additional $1,000,000 at award. The remaining contract value will be funded incrementally as work progresses through the September 2027 completion date.
NAVSEA in Washington, D.C. serves as the contracting activity for the modification. The cost-plus-incentive-fee structure means Lockheed Martin is reimbursed for allowable costs and can earn additional fee by meeting defined performance targets, a contract type the government uses when work scope carries technical risk and final costs cannot be estimated with precision at the outset.
What It Means for Contractors
For Lockheed Martin, the award cements continued revenue in its Rotary and Mission Systems segment through the end of fiscal year 2027. The Manassas and Clearwater facilities absorb the bulk of the work, supporting engineering and production workforces at both sites. The contract structure — a modification to an existing vehicle rather than a new competitive award — indicates the Navy is satisfied with Lockheed Martin's performance on the underlying contract and sees no programmatic reason to recompete the work at this stage.
The FMS component, while modest at 3%, keeps Canadian engineers and military personnel in the same SONAR ecosystem as U.S. Navy operators, which simplifies joint training and interoperability for North American maritime defense operations. FMS channels allow allied nations to procure systems without running independent competitions.
For other defense contractors in the undersea warfare space, this award reinforces that NAVSEA continues to invest in sustained engineering support contracts rather than breaking SONAR work into discrete delivery orders. Companies competing in adjacent sensor or acoustic processing programs should note the multi-year horizon and cost-plus structure, which signal ongoing development activity rather than mature production runs. Subcontractors and suppliers supporting Lockheed Martin's SONAR programs at the Manassas and Clearwater facilities can expect continued demand through 2027 under this modification.
The Shipbuilding and Conversion, Navy funding stream used in this award ties SONAR engineering support to active shipbuilding accounts, suggesting the work may be linked to specific hull programs or new-construction integration efforts in addition to legacy fleet sustainment.
Undersea Warfare Context
SONAR remains the primary sensor technology for undersea domain awareness, and its continued relevance is not in question despite advances in unmanned systems and distributed sensor networks. The acoustic environment that modern surface ship and submarine SONAR systems must operate in has grown more complex over the past decade — quieter adversary submarine designs, increased commercial maritime traffic, and the proliferation of undersea infrastructure all raise the noise floor that SONAR processing algorithms must work through. Lockheed Martin's engineering teams at Manassas and Clearwater work on the signal processing, transducer technology, and system integration challenges that determine whether a SONAR suite can reliably detect and track a threat submarine at operationally useful ranges.
The Navy's SONAR portfolio is not a single system but a family of equipment spanning towed arrays, hull-mounted sonars, and variable depth systems deployed across surface combatants, submarines, and maritime patrol aircraft. Sustaining and improving this family requires continuous engineering effort as the platforms that carry these systems undergo hull life extensions, combat system modernizations, and new-construction integration. Contract N00024-20-C-6117 provides the engineering backbone for that work — Lockheed Martin's role is to maintain the technical baseline, respond to emerging threats identified by Navy program offices, and support production of new units as shipbuilding programs deliver new hulls that need equipped SONAR suites.
The Canadian FMS component reflects a longstanding bilateral arrangement in North American maritime defense. Canada's surface combatant fleet operates in environments — the North Atlantic, the Arctic, and Pacific approaches — where SONAR performance is critical and where interoperability with U.S. Navy forces is an operational necessity. Sharing a SONAR engineering support contractor ensures that Canadian fleet configurations remain compatible with U.S. Navy systems and can benefit from engineering improvements developed under the larger American program without requiring Canada to fund separate development programs at comparable scale. The arrangement has persisted across multiple contract cycles and reflects a mature alliance relationship in the undersea domain.
