DoD Awards $580M for Missile Defense System Development to Lockheed Martin
Contract Overview
Contract Amount: $580,243,224 ($580.2M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2012-01-01
End Date: 2018-10-31
Contract Duration: 2,495 days
Daily Burn Rate: $232.6K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS INCENTIVE FEE
Sector: IT
Official Description: TASK ORDER 0001 UNDER THE FOLLOW-ON CONTRACT IS FOR THE CONTINUED DEVELOPMENT OF SPIRAL 8.2, SYSTEMS AND COMPONENT ENGINEERING, INFORMATION ASSURANCE, MODELING AND SIMULATIONS, TRAINING AND OPERATIONS OF THE SYSTEM. TASK ORDER 0001 WILL INCLUDE THE DEVELOPMENT OF SPIRAL 8.2 (S8.2), SYSTEMS AND COMPONENT ENGINEERING, INFORMATION ASSURANCE, MODELING AND SIMULATIONS, TRAINING AND OPERATIONS OF THE SYSTEM.
Place of Performance
Location: GAITHERSBURG, MONTGOMERY County, MARYLAND, 20879
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $580.2 million to LOCKHEED MARTIN CORPORATION for work described as: TASK ORDER 0001 UNDER THE FOLLOW-ON CONTRACT IS FOR THE CONTINUED DEVELOPMENT OF SPIRAL 8.2, SYSTEMS AND COMPONENT ENGINEERING, INFORMATION ASSURANCE, MODELING AND SIMULATIONS, TRAINING AND OPERATIONS OF THE SYSTEM. TASK ORDER 0001 WILL INCLUDE THE DEVELOPMENT OF SPIRAL 8.2 (S8.2… Key points: 1. Significant investment in advanced missile defense technology. 2. Sole-source award to Lockheed Martin raises competition concerns. 3. Long contract duration (2012-2018) suggests ongoing, complex development. 4. Cost-plus contract type may incentivize higher spending.
Value Assessment
Rating: questionable
The $580M award for custom computer programming services is substantial. Without comparable contracts for similar advanced missile defense development, a precise pricing assessment is difficult. The cost-plus incentive fee structure warrants scrutiny for potential cost overruns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This task order was not competed, indicating a sole-source award to Lockheed Martin. This lack of competition limits price discovery and may result in a higher price than if multiple vendors had bid.
Taxpayer Impact: The absence of competition for a contract of this magnitude raises concerns about the optimal use of taxpayer funds.
Public Impact
Enhances national security through advanced missile defense capabilities. Supports high-tech jobs in the aerospace and defense sector. Potential for technological advancements with broad defense applications.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of competition
Positive Signals
- Critical national security program
- Experienced contractor
- Potential for technological innovation
Sector Analysis
This contract falls within the IT and Defense sectors, specifically focusing on custom computer programming for advanced systems. Spending benchmarks for similar large-scale, sole-source defense development contracts are typically high due to complexity and specialized requirements.
Small Business Impact
The contract was awarded to Lockheed Martin Corporation and does not indicate any subcontracting to small businesses. This suggests a lack of opportunity for small businesses in this specific task order.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and effective program execution. Accountability for cost and performance will be crucial given the contract type and duration.
Related Government Programs
- Custom Computer Programming Services
- Department of Defense Contracting
- Missile Defense Agency Programs
Risk Flags
- Potential for cost overruns due to contract type.
- Lack of competitive pricing pressure.
- Limited transparency in pricing due to sole-source award.
- Long-term dependency on a single contractor.
- Risk of scope creep in complex development projects.
Tags
custom-computer-programming-services, department-of-defense, md, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $580.2 million to LOCKHEED MARTIN CORPORATION. TASK ORDER 0001 UNDER THE FOLLOW-ON CONTRACT IS FOR THE CONTINUED DEVELOPMENT OF SPIRAL 8.2, SYSTEMS AND COMPONENT ENGINEERING, INFORMATION ASSURANCE, MODELING AND SIMULATIONS, TRAINING AND OPERATIONS OF THE SYSTEM. TASK ORDER 0001 WILL INCLUDE THE DEVELOPMENT OF SPIRAL 8.2 (S8.2), SYSTEMS AND COMPONENT ENGINEERING, INFORMATION ASSURANCE, MODELING AND SIMULATIONS, TRAINING AND OPERATIONS OF THE SYSTEM.
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Missile Defense Agency).
What is the total obligated amount?
The obligated amount is $580.2 million.
What is the period of performance?
Start: 2012-01-01. End: 2018-10-31.
What was the justification for awarding this task order on a sole-source basis?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the need for seamless integration with existing systems where only one contractor can meet the requirements. For advanced defense systems, this often involves specialized expertise or intellectual property held by a single entity, making competition impractical or detrimental to program continuity.
What are the primary risks associated with a cost-plus incentive fee contract for this type of development?
Cost-plus incentive fee contracts carry risks of cost overruns if targets are not met or if the incentive structure is not well-defined. The contractor may have less incentive to control costs compared to fixed-price contracts. For complex R&D, estimating costs accurately is challenging, potentially leading to disputes and increased final prices for the government.
How will the effectiveness of the Spiral 8.2 development be measured given the sole-source nature and contract type?
Effectiveness will be measured through rigorous testing, adherence to technical specifications, and achievement of performance milestones outlined in the contract. The Missile Defense Agency will likely employ independent verification and validation processes. Performance metrics and the achievement of defined capabilities, rather than cost savings from competition, will be the primary indicators of success.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services
Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: HQ014711R0003
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp
Address: 700 N FREDERICK AVE, GAITHERSBURG, MD, 20878
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $597,285,937
Exercised Options: $597,285,937
Current Obligation: $580,243,224
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: HQ014712D0003
IDV Type: IDC
Timeline
Start Date: 2012-01-01
Current End Date: 2018-10-31
Potential End Date: 2018-10-31 00:00:00
Last Modified: 2025-02-06
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