DoD Awards $160.9M to Lockheed Martin for Re-entry System Sustaining Engineering Services
Contract Overview
Contract Amount: $160,878,142 ($160.9M)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2019-06-05
End Date: 2026-06-04
Contract Duration: 2,556 days
Daily Burn Rate: $62.9K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Official Description: RE-ENTRY SYSTEM/RE-ENTRY VEHICLE SUSTAINING ENGINEERING SERVICES
Place of Performance
Location: KING OF PRUSSIA, MONTGOMERY County, PENNSYLVANIA, 19406
Plain-Language Summary
Department of Defense obligated $160.9 million to LOCKHEED MARTIN CORP for work described as: RE-ENTRY SYSTEM/RE-ENTRY VEHICLE SUSTAINING ENGINEERING SERVICES Key points: 1. Significant contract value for critical defense systems. 2. Sole-source award to Lockheed Martin raises competition concerns. 3. Long-term contract (2019-2026) indicates sustained need. 4. Engineering services are vital for national security infrastructure.
Value Assessment
Rating: questionable
The contract's Cost Plus Award Fee structure can lead to cost overruns if not managed tightly. Benchmarking is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, limiting price discovery and potentially increasing costs for taxpayers. The lack of competition means no alternative providers were considered.
Taxpayer Impact: The sole-source nature of this award may result in higher costs than a competitive procurement, impacting taxpayer value.
Public Impact
Ensures continued operation and maintenance of critical re-entry systems. Supports national security by maintaining strategic defense capabilities. Potential for cost inefficiencies due to sole-source award.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of small business participation
Positive Signals
- Critical national security system support
- Long-term sustainment plan
Sector Analysis
This contract falls under Engineering Services, a sector crucial for maintaining complex defense systems. Spending benchmarks for such specialized services are often high due to technical requirements and limited providers.
Small Business Impact
The data indicates no specific allocation or set-aside for small businesses in this contract. This suggests a missed opportunity to leverage small business capabilities in specialized engineering services.
Oversight & Accountability
The Cost Plus Award Fee structure requires robust oversight to ensure performance objectives are met and costs are controlled. The long duration necessitates continuous monitoring of contractor performance and spending.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award limits competition.
- Cost-plus contract type can inflate costs.
- Lack of small business participation.
- Potential for cost overruns without strict oversight.
- Long contract duration increases exposure to changing needs.
Tags
engineering-services, department-of-defense, pa, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $160.9 million to LOCKHEED MARTIN CORP. RE-ENTRY SYSTEM/RE-ENTRY VEHICLE SUSTAINING ENGINEERING SERVICES
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORP.
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 $160.9 million.
What is the period of performance?
Start: 2019-06-05. End: 2026-06-04.
What is the justification for the sole-source award, and were alternatives ever considered?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one contractor can fulfill the requirement. Without further documentation, it's unclear if alternatives were thoroughly explored or if specific circumstances necessitated bypassing full and open competition.
How is the 'award fee' component structured and monitored to ensure fair pricing and contractor performance?
The award fee is performance-based, meaning Lockheed Martin earns additional profit based on meeting or exceeding specific criteria outlined in the contract. Robust oversight by the Air Force is crucial to objectively assess performance against these criteria and ensure the fee structure incentivizes efficiency and value, rather than simply cost accumulation.
What are the long-term implications for re-entry system readiness and modernization given this sustainment contract?
This contract ensures the immediate readiness and sustainment of existing re-entry systems. However, its focus on sustainment may not inherently drive innovation or modernization. Future contracts will be critical for addressing technological advancements and ensuring the systems remain effective against evolving threats.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Address: 230 MALL BLVD, KING OF PRUSSIA, PA, 19406
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: $261,876,230
Exercised Options: $168,445,230
Current Obligation: $160,878,142
Actual Outlays: $5,020,286
Subaward Activity
Number of Subawards: 51
Total Subaward Amount: $4,396,121
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA821419D0001
IDV Type: IDC
Timeline
Start Date: 2019-06-05
Current End Date: 2026-06-04
Potential End Date: 2029-06-04 00:00:00
Last Modified: 2025-08-21
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