DoD Awards Lockheed Martin $2.36 Billion for Titan IV Launch Vehicle Program

Contract Overview

Contract Amount: $2,361,601,334 ($2.4B)

Contractor: Lockheed Martin Commercial Launch Services, Inc.

Awarding Agency: Department of Defense

Start Date: 1997-04-01

End Date: 2008-09-30

Contract Duration: 4,200 days

Daily Burn Rate: $562.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 199707!5700!0051!GZ74 !SMC/PKV2 !F0470196C0001 !A!*!P00051 !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!+000000998348!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!*!*!*!B!A!*!C !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 $2.36 billion to LOCKHEED MARTIN COMMERCIAL LAUNCH SERVICES, INC. for work described as: 199707!5700!0051!GZ74 !SMC/PKV2 !F0470196C0001 !A!*!P00051 !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 investment in a critical defense program. 2. Sole contractor for a specialized, high-stakes project. 3. Long-term contract duration indicates ongoing need. 4. Potential for cost overruns in complex R&D.

Value Assessment

Rating: fair

The contract value of $2.36 billion over 11 years suggests a substantial but potentially variable cost. Benchmarking is difficult without specific unit data, but the scale implies significant resource allocation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

While the contract was initially awarded under full and open competition, the specific nature of the Titan IV program may have led to limited subsequent competition for modifications or extensions. The pricing mechanism (Cost Plus Award Fee) aims to incentivize performance but can also lead to higher costs.

Taxpayer Impact: Taxpayers are funding a major defense initiative. The Cost Plus Award Fee structure means that while efficiency is rewarded, the final cost could exceed initial estimates, impacting overall budget.

Public Impact

Supports national security by ensuring reliable space launch capabilities. Drives innovation in aerospace engineering and manufacturing. Creates and sustains high-skilled jobs in the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost overruns due to complexity
Program delays impacting launch schedules
Technological obsolescence
Reliance on a single contractor

Positive Signals

Successful execution of critical missions
Advancement of space launch technology
Contribution to national security objectives

Sector Analysis

This contract falls within the Defense sector, specifically focusing on missile and space systems. Spending in this area is typically high due to the advanced technology and strategic importance of such programs. Benchmarks are difficult to establish due to the unique nature of launch vehicles.

Small Business Impact

While the prime contractor is Lockheed Martin, a large corporation, subcontracts may have been awarded to small businesses for specialized components or services, though this information is not detailed in the provided data.

Oversight & Accountability

Oversight is likely managed by the Defense Contract Management Agency (DCMA). The Cost Plus Award Fee structure necessitates close monitoring of performance and costs to ensure value for taxpayer money.

Related Government Programs

Electron Tube Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

High cost potential with CPAF
Long contract duration increases risk exposure
Dependence on a single, large prime contractor
Potential for schedule slippage in complex R&D

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $2.36 billion to LOCKHEED MARTIN COMMERCIAL LAUNCH SERVICES, INC.. 199707!5700!0051!GZ74 !SMC/PKV2 !F0470196C0001 !A!*!P00051 !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!+000000998348!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!*!*!*!B!A!*!C !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 $2.36 billion.

What is the period of performance?

Start: 1997-04-01. End: 2008-09-30.

What was the primary driver for selecting Lockheed Martin for this program, and were there viable alternatives considered during the initial full and open competition?

The selection of Lockheed Martin likely stemmed from their established expertise and capabilities in developing and managing complex launch vehicle programs. During the initial full and open competition, multiple bidders may have been evaluated based on technical proposals, past performance, and cost. The specific details of the competitive evaluation and the number of proposals received would provide a clearer picture of the alternatives considered and the rationale behind the final award.

How has the Cost Plus Award Fee (CPAF) structure impacted the final cost and performance of the Titan IV program compared to other contract types?

The CPAF structure incentivizes contractors to meet or exceed performance targets by offering award fees. While this can drive efficiency and quality, it also carries the risk of higher overall costs if award fee criteria are broadly met without strict cost controls. Analyzing the actual award fees paid versus the target fees, and comparing the final contract cost to initial estimates, would reveal the effectiveness of CPAF in this specific program and its impact on taxpayer expenditure.

What is the long-term strategic value of the Titan IV program, and how does its performance contribute to broader national security objectives?

The Titan IV program was crucial for launching heavy payloads, including satellites for intelligence, reconnaissance, and communication, essential for national security operations. Its successful operation ensured the deployment of critical assets in space. The program's performance directly contributed to maintaining U.S. military readiness and technological superiority by providing reliable access to space for vital national assets.

Industry Classification

NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Electron Tube Manufacturing

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: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 12999 W DEER CREEK CANYON, LITTLETON, CO, 80127

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $2,122,105,551

Exercised Options: $1,644,590,018

Current Obligation: $2,361,601,334

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline