DoD Awards $9.46 Billion for Missile and Space Systems to Lockheed Martin, Spanning 26 Years

Contract Overview

Contract Amount: $9,458,382,766 ($9.5B)

Contractor: Lockheed Missiles & Space Comp

Awarding Agency: Department of Defense

Start Date: 1995-11-08

End Date: 2021-10-29

Contract Duration: 9,487 days

Daily Burn Rate: $997.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200510!000044!5700!FA8810!SMC/ISK !F0470195C0017 !A!N! !N! !P00309!20050324!20100630!196596688!196596688!834951691!N!LOCKHEED MARTIN CORPORATION !1111 LOCKHEED MARTIN WAY !SUNNYVALE !CA!94089!77000!085!06!SUNNYVALE !SANTA CLARA !CALIFORNIA!+000003570337!N!N!000000000000!AC23!RDTE/MISSILE AND SPACE SYSTEMS-ADV TECH DEV !A2 !MISSILE AND SPACE SYSTEMS !210 !SBIRS HIGH !323118!E! !3! ! !D! ! !20200930!B! ! !N!Z!D!N!U!1!001!N!1G!Z!Y!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!B!N! ! ! !Y! ! !0001! !

Place of Performance

Location: SUNNYVALE, SANTA CLARA County, CALIFORNIA, 94089

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $9.46 billion to LOCKHEED MISSILES & SPACE COMP for work described as: 200510!000044!5700!FA8810!SMC/ISK !F0470195C0017 !A!N! !N! !P00309!20050324!20100630!196596688!196596688!834951691!N!LOCKHEED MARTIN CORPORATION !1111 LOCKHEED MARTIN WAY !SUNNYVALE !CA!94089!77000!085!06!SUNNYVALE !SANT… Key points: 1. The contract, valued at $9.46 billion, was awarded to Lockheed Martin Corporation for missile and space systems. 2. This represents a significant, long-term investment in advanced technology development within the defense sector. 3. The extensive duration of the contract (1995-2021) suggests a stable, ongoing need for these specialized services. 4. Competition details are not fully clear, but the award was made under 'Full and Open Competition'.

Value Assessment

Rating: good

The contract value of $9.46 billion over 26 years indicates a substantial and consistent need for these services. Benchmarking is difficult without specific unit data, but the scale suggests a significant investment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the long duration and specialized nature of missile and space systems may limit the number of viable bidders.

Taxpayer Impact: The substantial value of this contract represents a significant allocation of taxpayer funds towards advanced defense capabilities.

Public Impact

Taxpayers are funding advanced research and development in critical defense technologies. The long-term nature of the contract provides stability for Lockheed Martin and its workforce. This spending supports national security objectives related to space and missile systems. The contract's duration raises questions about long-term strategic planning and potential for future innovation.

Waste & Efficiency Indicators

Waste Risk Score: 95 / 10

Warning Flags

Long contract duration may indicate a lack of agility in adapting to new technologies.
Potential for cost overruns in such a long-term, complex R&D project.
Limited visibility into the specific technological advancements funded.

Positive Signals

Significant investment in critical national security capabilities.
Awarded under full and open competition, suggesting a competitive process.
Long-term commitment provides stability for a key defense contractor.

Sector Analysis

This contract falls within the 'Missile and Space Systems - Advanced Tech Dev' sector, a high-cost, high-innovation area within the defense industry. Spending benchmarks in this specialized field are difficult to establish due to proprietary technology and unique program requirements.

Small Business Impact

The data indicates this is a large prime contract awarded to Lockheed Martin Corporation. There is no direct information provided on subcontracting to small businesses, which is a common practice in large defense contracts.

Oversight & Accountability

The long duration of this contract necessitates robust oversight to ensure accountability, manage costs, and track technological progress. Regular reviews and performance metrics are crucial for effective oversight.

Related Government Programs

Space Research and Technology
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Long contract duration (26 years) increases risk of cost overruns and technological obsolescence.
Specialized nature of R&D may limit effective competition despite 'Full and Open' designation.
Lack of specific performance metrics or technological deliverables in the provided data.
Potential for contractor lock-in due to the long-term, specialized relationship.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $9.46 billion to LOCKHEED MISSILES & SPACE COMP. 200510!000044!5700!FA8810!SMC/ISK !F0470195C0017 !A!N! !N! !P00309!20050324!20100630!196596688!196596688!834951691!N!LOCKHEED MARTIN CORPORATION !1111 LOCKHEED MARTIN WAY !SUNNYVALE !CA!94089!77000!085!06!SUNNYVALE !SANTA CLARA !CALIFORNIA!+000003570337!N!N!000000000000!AC23!RDTE/MISSILE AND SPACE SYSTEMS-ADV TECH DEV !A2 !MISSILE AND SPACE SYSTEMS !210 !SBIRS HIGH !323118!E! !3! ! !D! ! !202

Who is the contractor on this award?

The obligated recipient is LOCKHEED MISSILES & SPACE COMP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $9.46 billion.

What is the period of performance?

Start: 1995-11-08. End: 2021-10-29.

What specific technological advancements or capabilities are being developed under this contract, and how do they align with current and future defense needs?

The contract focuses on 'Missile and Space Systems - Advanced Tech Dev,' suggesting research into next-generation platforms, propulsion, guidance, and potentially space-based defense or surveillance technologies. The alignment with defense needs would depend on classified strategic objectives, but such investments typically aim to maintain technological superiority and address evolving threats in space and missile warfare.

Given the 26-year duration, what mechanisms are in place to ensure the contract remains cost-effective and adaptable to technological obsolescence or shifts in strategic priorities?

Long-term contracts often include provisions for periodic reviews, cost adjustments based on economic indices, and phased funding. Adaptability might be managed through contract modifications for specific technological insertions or by structuring the contract in phases with defined milestones. However, the inherent risk of obsolescence in a 26-year R&D cycle remains a significant concern requiring diligent program management.

How does the 'Full and Open Competition' process for such a specialized and long-term contract ensure genuine competition and prevent potential contractor lock-in?

While 'Full and Open Competition' indicates the initial bidding process was open, the specialized nature of advanced missile and space systems may mean only a few entities possess the required expertise and infrastructure. Effective competition in such cases relies on clear performance requirements, robust evaluation criteria, and potentially encouraging new entrants or consortia. Long-term contracts can still lead to lock-in if follow-on work is implicitly tied to the initial award without re-competition.

Industry Classification

NAICS: Public Administration › Space Research and Technology › Space Research and Technology

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: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 1111 LOCKHEED MARTIN WAY, SUNNYVALE, CA, 94089

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $2,717,913,507

Exercised Options: $2,733,635,134

Current Obligation: $9,458,382,766

Actual Outlays: $1,309,946

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline