DoD awards $157M undefinitized contract to Lockheed Martin for Taiwan Air Force missile systems
Contract Overview
Contract Amount: $157,382,517 ($157.4M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2025-12-31
End Date: 2031-06-30
Contract Duration: 2,007 days
Daily Burn Rate: $78.4K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: THE PURPOSE OF THIS PURCHASE REQUEST IS TO FUND A UNDEFINITIZED CONTRACT ACTION (UCA) TO LOCKHEED MARTIN MISSILE AND FIRE CONTROL LMMFC FOR THE FOLLOWING PROCUREMENT EFFORT FOR THE TAIWAN AIR FORCE (TAF).
Place of Performance
Location: ORLANDO, ORANGE County, FLORIDA, 32819
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $157.4 million to LOCKHEED MARTIN CORPORATION for work described as: THE PURPOSE OF THIS PURCHASE REQUEST IS TO FUND A UNDEFINITIZED CONTRACT ACTION (UCA) TO LOCKHEED MARTIN MISSILE AND FIRE CONTROL LMMFC FOR THE FOLLOWING PROCUREMENT EFFORT FOR THE TAIWAN AIR FORCE (TAF). Key points: 1. This award represents a significant investment in defense capabilities for an international partner. 2. The sole-source nature raises questions about price discovery and potential cost efficiencies. 3. Long-term contract duration (2031) suggests a sustained need for these systems. 4. The procurement falls under the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' NAICS code.
Value Assessment
Rating: questionable
The contract is an Undefinitized Contract Action (UCA), meaning final pricing is not yet established. This structure carries inherent risk of overpayment until definitization, especially without competitive bidding.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award to Lockheed Martin. This limits price discovery and potentially leads to higher costs compared to a competitive environment.
Taxpayer Impact: Taxpayer funds are being used for a foreign military sale, with the potential for inflated costs due to the lack of competition.
Public Impact
Enhances Taiwan's air defense capabilities, potentially impacting regional security dynamics. Represents a significant U.S. foreign military sales commitment. Supports advanced aerospace manufacturing jobs within the U.S.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- UCA structure
- Long contract duration
- Foreign military sale
Positive Signals
- Supports key ally
- Advanced technology transfer
Sector Analysis
This procurement falls within the aerospace and defense sector, specifically focusing on advanced guidance and navigation systems. Spending in this sector is often characterized by high R&D costs and long production cycles.
Small Business Impact
There is no indication in the provided data that small businesses will be involved in this contract, either as prime contractors or subcontractors. The award is directly to a large aerospace prime.
Oversight & Accountability
The use of a UCA requires robust oversight to ensure fair and reasonable pricing upon definitization. The Department of Defense's contracting oversight mechanisms will be critical.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award
- Undefinitized Contract Action (UCA)
- Long contract performance period
- Foreign military sale funding
- Lack of initial price competition
Tags
search-detection-navigation-guidance-aer, department-of-defense, fl, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $157.4 million to LOCKHEED MARTIN CORPORATION. THE PURPOSE OF THIS PURCHASE REQUEST IS TO FUND A UNDEFINITIZED CONTRACT ACTION (UCA) TO LOCKHEED MARTIN MISSILE AND FIRE CONTROL LMMFC FOR THE FOLLOWING PROCUREMENT EFFORT FOR THE TAIWAN AIR FORCE (TAF).
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORPORATION.
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 $157.4 million.
What is the period of performance?
Start: 2025-12-31. End: 2031-06-30.
What is the projected final cost of the contract after definitization, and how does it compare to similar systems procured competitively?
The final cost is currently unknown as this is an Undefinitized Contract Action (UCA). A thorough review during the definitization process will be necessary to establish a fair and reasonable price. Benchmarking against comparable systems, considering technological advancements and market conditions, will be crucial for assessing value for taxpayer money.
What are the specific risks associated with awarding a sole-source UCA for advanced missile systems to a single contractor?
The primary risks include potential cost overruns due to the absence of competitive pressure, reduced incentive for the contractor to control costs, and the possibility of the government paying a premium. Furthermore, the long duration of the UCA period increases the exposure to these risks before final pricing is agreed upon.
How effectively will this procurement enhance Taiwan's air defense capabilities and contribute to regional stability?
The effectiveness hinges on the specific capabilities of the missile systems provided and their integration into Taiwan's existing defense infrastructure. Successful delivery and operational readiness are key. The strategic implications for regional stability will depend on geopolitical factors and the perceived balance of power shifts resulting from this arms sale.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp
Address: 5600 W SAND LAKE RD # MP-265, ORLANDO, FL, 32819
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: $328,592,634
Exercised Options: $328,592,634
Current Obligation: $157,382,517
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA854020D0001
IDV Type: IDC
Timeline
Start Date: 2025-12-31
Current End Date: 2031-06-30
Potential End Date: 2031-06-30 00:00:00
Last Modified: 2026-01-20
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