DoD's $15M MK21 Arming and Fuzing Refurbishment Contract Awarded to Lockheed Martin
Contract Overview
Contract Amount: $15,000,103 ($15.0M)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2024-08-15
End Date: 2026-04-01
Contract Duration: 594 days
Daily Burn Rate: $25.3K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: MK21 ARMING AND FUZING (AFA) REFURBISHMENT
Place of Performance
Location: KING OF PRUSSIA, MONTGOMERY County, PENNSYLVANIA, 19406
Plain-Language Summary
Department of Defense obligated $15.0 million to LOCKHEED MARTIN CORP for work described as: MK21 ARMING AND FUZING (AFA) REFURBISHMENT Key points: 1. The Department of the Air Force awarded a $15M contract for MK21 Arming and Fuzing refurbishment. 2. Lockheed Martin Corp is the sole awardee, raising questions about competition. 3. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns. 4. Engineering Services (NAICS 541330) is the sector for this procurement.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee contract type, coupled with a lack of competition, makes it difficult to assess value. Without benchmarks for similar refurbishment services, it's hard to determine if the pricing is optimal.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The lack of competition for this $15M contract may result in taxpayers paying more than necessary for the refurbishment services.
Public Impact
Taxpayers may be overpaying due to the sole-source nature of the award. The refurbishment of critical defense equipment ensures operational readiness. The specific impact on the public is indirect, related to defense spending efficiency.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Lack of transparency in pricing
Positive Signals
- Ensures refurbishment of critical defense assets
- Specific delivery order under a larger contract (implied)
Sector Analysis
This contract falls under Engineering Services, specifically related to defense equipment maintenance and refurbishment. Benchmarks for similar sole-source refurbishment contracts are often difficult to obtain due to proprietary information and limited competition.
Small Business Impact
There is no indication that small businesses were involved in this procurement, as it was awarded directly to Lockheed Martin Corp.
Oversight & Accountability
The lack of competition warrants further oversight to ensure the government received fair pricing and that this sole-source award was justified. Accountability for cost control under the CPFF structure is crucial.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award limits competition.
- Cost Plus Fixed Fee contract type increases cost risk.
- Potential for inflated pricing due to lack of market pressure.
- Limited transparency on specific refurbishment details and cost breakdown.
Tags
engineering-services, department-of-defense, pa, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $15.0 million to LOCKHEED MARTIN CORP. MK21 ARMING AND FUZING (AFA) REFURBISHMENT
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 $15.0 million.
What is the period of performance?
Start: 2024-08-15. End: 2026-04-01.
What is the justification for awarding this contract on a sole-source basis?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one contractor can fulfill the requirement. Without specific documentation, it's presumed that Lockheed Martin possesses the exclusive rights or expertise necessary for the MK21 Arming and Fuzing refurbishment, preventing a competitive bidding process.
What are the potential cost risks associated with a Cost Plus Fixed Fee contract for this service?
Cost Plus Fixed Fee (CPFF) contracts carry inherent risks of cost overruns. The government pays the contractor's actual costs plus a predetermined fixed fee. If costs escalate beyond initial estimates, the government bears the burden, while the contractor's profit remains fixed. This structure can incentivize contractors to incur higher costs if not closely monitored.
How does the lack of competition impact the overall effectiveness of this spending?
The absence of competition significantly hinders the effectiveness of this spending. Without competing bids, there's no market pressure to drive down prices or encourage innovation. This can lead to suboptimal resource allocation, where taxpayer funds might not be used as efficiently as they could be in a competitive environment, potentially impacting the value received for the $15 million invested.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: COST PLUS FIXED FEE (U)
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: $52,656,014
Exercised Options: $52,656,013
Current Obligation: $15,000,103
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: 2024-08-15
Current End Date: 2026-04-01
Potential End Date: 2026-04-01 00:00:00
Last Modified: 2025-12-11
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