Lockheed Martin Awarded $897.5M for Titan IV Launch Vehicle Program Amidst Limited Competition

Contract Overview

Contract Amount: $897,511,837 ($897.5M)

Contractor: Lockheed Martin Commercial Launch Services, Inc.

Awarding Agency: Department of Defense

Start Date: 1997-04-01

End Date: 2005-09-30

Contract Duration: 3,104 days

Daily Burn Rate: $289.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 199707!5700!0047!GZ74 !SMC/PKV2 !F0470195C0012 !A!*!P00040 !19970401!20030930!080372998!080372998!834951691!N!04236!LOCKHEED MARTIN CORPORATION !12999 W DEER CREEK CANYON !LITTLETON !CO!80127!20000!031!08!DENVER !DENVER !COLORADO !0001!+000009809999!N!N!000000000000!AC25!RDTE/MISSILE AND SPACE SYSTEMS-ENG/MANUF DEVEL !A2 !MISSILE AND SPACE SYSTEMS !3CPA!TITAN IV LAUNCH VEH PROGRAM !3671!3!A!S!D!B!A!*!D !N!R!1!001!N!1A!A!Y!Z!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: LITTLETON, DOUGLAS County, COLORADO, 80125

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $897.5 million to LOCKHEED MARTIN COMMERCIAL LAUNCH SERVICES, INC. for work described as: 199707!5700!0047!GZ74 !SMC/PKV2 !F0470195C0012 !A!*!P00040 !19970401!20030930!080372998!080372998!834951691!N!04236!LOCKHEED MARTIN CORPORATION !12999 W DEER CREEK CANYON !LITTLETON !CO!80127!20000!031!08!DENVER !DENVER… Key points: 1. Significant contract value of $897.5 million awarded to Lockheed Martin. 2. Limited competition raises questions about price discovery and taxpayer value. 3. Contract spans over 8 years, indicating a long-term commitment to the program. 4. The program falls under the Defense sector, specifically missile and space systems development.

Value Assessment

Rating: questionable

The contract value of $897.5 million for a Cost Plus Award Fee contract needs further scrutiny. Without detailed cost breakdowns and performance metrics, it's difficult to assess if this represents excellent value compared to similar missile and space system development contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not competed, indicating a limited competition approach. This method can sometimes lead to higher costs for taxpayers if robust price negotiation and market analysis are not thoroughly conducted.

Taxpayer Impact: The lack of full and open competition may result in a suboptimal price for taxpayers, as alternative, potentially more cost-effective solutions may not have been explored.

Public Impact

Taxpayers are funding a significant portion of the U.S. defense budget through this contract. The success of the Titan IV program directly impacts national security and space exploration capabilities. This contract supports jobs and economic activity within the aerospace and defense industry, particularly in Colorado.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition
Cost Plus Award Fee structure
Long contract duration

Positive Signals

Established contractor with proven capabilities
Critical national security program

Sector Analysis

This contract is within the Defense sector, specifically for missile and space systems development and manufacturing. Spending in this area is often characterized by high R&D costs and long program lifecycles, with significant government oversight required.

Small Business Impact

The data does not indicate any specific provisions or subcontracting goals for small businesses within this contract. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

The contract is managed by the Department of Defense through the Defense Contract Management Agency. Oversight would focus on performance, cost control, and adherence to contract terms, especially given the Cost Plus Award Fee structure.

Related Government Programs

Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Limited competition may lead to higher costs.
Cost Plus Award Fee structure can incentivize cost overruns if not tightly managed.
Long contract duration risks technological obsolescence.
Lack of transparency on specific performance metrics and award criteria.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $897.5 million to LOCKHEED MARTIN COMMERCIAL LAUNCH SERVICES, INC.. 199707!5700!0047!GZ74 !SMC/PKV2 !F0470195C0012 !A!*!P00040 !19970401!20030930!080372998!080372998!834951691!N!04236!LOCKHEED MARTIN CORPORATION !12999 W DEER CREEK CANYON !LITTLETON !CO!80127!20000!031!08!DENVER !DENVER !COLORADO !0001!+000009809999!N!N!000000000000!AC25!RDTE/MISSILE AND SPACE SYSTEMS-ENG/MANUF DEVEL !A2 !MISSILE AND SPACE SYSTEMS !3CPA!TITAN IV LAUNCH VEH PROGRAM !3671!3!A!S!D!B!A!*!D !N!R!1!0

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN COMMERCIAL LAUNCH SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $897.5 million.

What is the period of performance?

Start: 1997-04-01. End: 2005-09-30.

What specific performance metrics and award fee criteria are in place to ensure Lockheed Martin delivers exceptional value for the $897.5 million awarded?

The contract utilizes a Cost Plus Award Fee (CPAF) structure, implying that Lockheed Martin's compensation is tied to meeting specific performance objectives and milestones. Detailed examination of the contract's Statement of Work (SOW) and the defined award fee criteria is necessary to understand how 'exceptional value' is measured and incentivized. Without this information, assessing the effectiveness of the fee structure in driving optimal outcomes is challenging.

Given the limited competition, what measures were taken to ensure the $897.5 million price reflects a fair and reasonable cost for the Titan IV launch vehicle program?

When competition is limited, agencies typically rely on techniques such as should-cost analysis, historical pricing data, and independent government cost estimates to determine price reasonableness. The contracting officer's determination of 'fair and reasonable' would be documented, likely involving detailed negotiations with Lockheed Martin. However, the absence of competitive bids inherently reduces the market-driven pressure to achieve the lowest possible price.

How does the long duration of this contract (1997-2005) impact the government's ability to adapt to evolving technological advancements in launch vehicle capabilities?

A long contract duration, such as this one spanning over eight years, can pose a risk of technological obsolescence. While it provides stability for the program, it may limit the government's flexibility to incorporate newer, potentially more efficient or capable technologies that emerge during the contract period. Contract clauses for modifications, technical refreshers, or termination for convenience would be critical in managing this risk.

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: 12999 W DEER CREEK CANYON, LITTLETON, CO, 90

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

Contract Characteristics

Cost or Pricing Data: YES

Timeline