DoD awards $25.4M contract for advanced missile launch detectors to Lockheed Martin

Contract Overview

Contract Amount: $25,402,282 ($25.4M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2016-02-19

End Date: 2020-06-30

Contract Duration: 1,593 days

Daily Burn Rate: $15.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ADVANCED MISSILE LAUNCH DETECTOR

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32819

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $25.4 million to LOCKHEED MARTIN CORPORATION for work described as: ADVANCED MISSILE LAUNCH DETECTOR Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential for overpayment. 2. The contract duration of 1593 days suggests a long-term need for these specialized detection systems. 3. The use of a Cost Plus Fixed Fee (CPFF) pricing structure can incentivize cost overruns. 4. The specific product service code (PSC) is not detailed, making direct comparisons difficult. 5. The award was made by the Department of the Air Force, indicating a specific military application. 6. No small business participation was noted, suggesting a focus on large prime contractors.

Value Assessment

Rating: questionable

The contract value of $25.4 million for advanced missile launch detectors is difficult to benchmark without more specific details on the technology and quantity. However, given the sole-source nature of the award and the CPFF pricing structure, there is a risk that the government did not achieve the best possible value. Comparing this to other sole-source awards for similar defense systems would be necessary for a more definitive assessment of pricing and value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This typically occurs when a specific contractor possesses unique capabilities or proprietary technology essential for the requirement. The lack of competition limits the government's ability to solicit multiple bids and potentially negotiate a lower price, raising concerns about price discovery.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without competing offers, it is harder to ensure the price reflects market rates and efficiency.

Public Impact

The primary beneficiaries are the Department of the Air Force, which will receive advanced missile launch detection capabilities. The services delivered include the manufacturing and potential integration of specialized detection systems. The contract is geographically located in Florida, suggesting potential impacts on the local defense industry workforce. The workforce implications are likely concentrated within Lockheed Martin's facilities in Florida.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not closely managed.
Lack of small business participation may limit broader economic impact.
Limited public information on the specific technology and performance metrics.

Positive Signals

Award to a major defense contractor (Lockheed Martin) suggests access to established expertise and technology.
Long contract duration indicates a sustained need and potential for stable supply.
The contract is for advanced technology, potentially enhancing national security capabilities.

Sector Analysis

The defense sector, particularly aircraft manufacturing and related systems, is characterized by high R&D costs, long product lifecycles, and significant government investment. Contracts for advanced detection systems are critical for maintaining military readiness and technological superiority. Spending in this sub-sector often involves specialized components and complex integration, with major defense contractors like Lockheed Martin dominating the landscape.

Small Business Impact

This contract does not appear to have a small business set-aside. The prime contractor is Lockheed Martin Corporation, a large aerospace and defense company. There is no information provided regarding subcontracting plans to small businesses. This suggests that the primary focus of this award is on the prime contractor's capabilities, with potential limited direct benefit to the small business ecosystem for this specific contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. The Cost Plus Fixed Fee structure necessitates rigorous financial oversight to monitor costs and ensure the fixed fee is justified. Transparency is limited due to the sole-source nature and lack of detailed public reporting on performance metrics. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Missile Defense Systems
Aerospace Manufacturing
Advanced Sensor Technology
Department of Defense Procurement

Risk Flags

Sole-source award
Cost-plus contract type
Lack of detailed performance metrics
No small business participation specified

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.4 million to LOCKHEED MARTIN CORPORATION. ADVANCED MISSILE LAUNCH DETECTOR

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 $25.4 million.

What is the period of performance?

Start: 2016-02-19. End: 2020-06-30.

What is the specific nature of the 'advanced missile launch detectors' being procured, and what are their key performance characteristics?

The provided data does not specify the exact nature or key performance characteristics of the 'advanced missile launch detectors.' The contract falls under North American Industry Classification System (NAICS) code 336411, which pertains to Aircraft Manufacturing. This suggests the detectors might be integrated into aircraft platforms or are related to aircraft-based defense systems. Without further details, it's difficult to ascertain their specific capabilities, such as detection range, accuracy, types of missiles they can identify, or their operational environment. This lack of specificity is common in high-security defense contracts where detailed technical information is often classified or proprietary.

How does the $25.4 million contract value compare to similar procurements for missile detection systems by the DoD or other agencies?

Benchmarking this $25.4 million contract is challenging without knowing the precise specifications and quantity of detectors. However, the duration of over four years (1593 days) suggests a substantial procurement. Missile detection systems can range widely in cost depending on their sophistication, platform integration (e.g., ground-based, airborne, space-based), and technological advancements. Sole-source awards, like this one to Lockheed Martin, often lack the price transparency of competitive bids. To compare, one would need to identify contracts for similar technologies, ideally those awarded competitively, and analyze their total value, unit costs, and contract types. Given the sole-source nature and CPFF structure, this contract may not represent the most cost-effective option available in the market.

What are the potential risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this procurement?

The Cost Plus Fixed Fee (CPFF) contract type carries inherent risks for the government. While it provides the contractor with a guaranteed profit margin (the fixed fee), it can incentivize the contractor to incur higher costs, as the fee remains constant regardless of the final cost incurred. The government bears the risk of cost overruns. Effective oversight is crucial to manage these risks, requiring diligent monitoring of the contractor's expenditures and justification for costs. For this $25.4 million contract, the Air Force must ensure robust cost accounting and auditing processes are in place to prevent unnecessary spending and ensure the fixed fee is commensurate with the effort and risk involved.

What is Lockheed Martin's track record with the Department of the Air Force and for similar defense systems?

Lockheed Martin Corporation is a major defense contractor with an extensive history of contracts with the Department of the Air Force and other branches of the U.S. military. They are a primary provider of advanced defense systems, including aircraft, missiles, and surveillance technologies. Their track record typically involves large, complex programs often awarded through non-competitive or limited-competition processes due to the specialized nature of the technology and the company's established expertise. While specific performance details for every contract are not publicly available, Lockheed Martin is generally considered a capable provider of sophisticated defense solutions, though like any large contractor, they have faced scrutiny over cost and performance on various programs throughout their history.

What are the implications of this contract being awarded in Florida, given NAICS code 336411 (Aircraft Manufacturing)?

The contract's award location in Florida, coupled with the NAICS code 336411 (Aircraft Manufacturing), suggests that Lockheed Martin's operations in Florida are likely involved in the production or integration of these advanced missile launch detectors. This could translate to job creation or sustained employment within the state's aerospace and defense sector. Florida has a significant presence in the aerospace industry, and contracts like this contribute to the regional economy by supporting skilled labor, supply chains, and related businesses. The specific impact would depend on the scale of operations at the Florida facility and any associated subcontracting within the state.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

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: $25,560,695

Exercised Options: $25,560,695

Current Obligation: $25,402,282

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline