DoD Awards $210M for Joint Strike Missile Production Lot 1 to Kongsberg Defence & Aerospace
Contract Overview
Contract Amount: $209,846,578 ($209.8M)
Contractor: Kongsberg Defence & Aerospace AS
Awarding Agency: Department of Defense
Start Date: 2024-05-31
End Date: 2027-09-30
Contract Duration: 1,217 days
Daily Burn Rate: $172.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: JOINT STRIKE MISSILE (JSM) PRODUCTION LOT 1
Plain-Language Summary
Department of Defense obligated $209.8 million to KONGSBERG DEFENCE & AEROSPACE AS for work described as: JOINT STRIKE MISSILE (JSM) PRODUCTION LOT 1 Key points: 1. Significant investment in advanced missile technology. 2. Sole-source award raises questions about competition and price. 3. Long-term contract (over 3 years) indicates sustained need. 4. Focus on defense sector, specifically guided missile systems.
Value Assessment
Rating: questionable
The contract value of $209.8M for 1217 units over 1217 days (approx. 3.3 years) needs further scrutiny. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar advanced missile systems.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Kongsberg Defence & Aerospace. This lack of competition limits price discovery and may result in a higher cost to the taxpayer than if multiple vendors had bid.
Taxpayer Impact: The sole-source nature of this award means taxpayers may be paying a premium for the Joint Strike Missile, as competitive pressures to lower costs were absent.
Public Impact
Enhances U.S. air combat capabilities with advanced missile technology. Supports a key defense contractor, potentially impacting jobs and innovation. Long-term production ensures availability of critical munitions for national security.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Sole-source award
- Potential for inflated pricing
Positive Signals
- Acquisition of advanced defense technology
- Long-term production commitment
- Supports strategic defense capabilities
Sector Analysis
This contract falls within the Defense sector, specifically for guided missile and propulsion systems. Spending in this area is critical for maintaining military readiness and technological superiority, with benchmarks often driven by R&D and specialized manufacturing capabilities.
Small Business Impact
This contract was awarded directly to Kongsberg Defence & Aerospace, a large foreign entity. There is no indication of subcontracting opportunities for small businesses in the provided data, suggesting limited direct impact on the U.S. small business industrial base.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the price is justified and that future procurements explore competitive avenues where feasible. Accountability for the justification of the sole-source decision is crucial.
Related Government Programs
- Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award lacks competition
- Potential for overpayment
- Limited visibility into pricing justification
- Dependence on a single supplier
Tags
guided-missile-and-space-vehicle-propuls, department-of-defense, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $209.8 million to KONGSBERG DEFENCE & AEROSPACE AS. JOINT STRIKE MISSILE (JSM) PRODUCTION LOT 1
Who is the contractor on this award?
The obligated recipient is KONGSBERG DEFENCE & AEROSPACE AS.
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 $209.8 million.
What is the period of performance?
Start: 2024-05-31. End: 2027-09-30.
What is the justification for awarding this contract on a sole-source basis, and what steps are being taken to ensure fair pricing?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or a lack of viable alternatives. For this contract, the Department of Defense would need to provide documentation supporting these claims. Oversight bodies should scrutinize the pricing mechanisms and potentially request cost breakdowns to ensure the $209.8 million is a fair reflection of the value received, especially given the absence of competitive bids.
What are the long-term strategic implications of relying on a sole-source provider for the Joint Strike Missile?
Sole-source reliance can create strategic vulnerabilities, including dependence on a single supplier, potential supply chain disruptions, and limited leverage in price negotiations. While it ensures access to specific technology, it may stifle innovation from other potential domestic suppliers and could lead to higher sustainment costs over the system's lifecycle. Future planning should consider diversifying sources or fostering domestic production capabilities.
How does the unit cost of this missile production lot compare to previous or similar procurements, and what factors influence this cost?
Without access to previous procurement data or benchmarks for comparable systems, a direct unit cost comparison is difficult. Factors influencing the cost of the Joint Strike Missile include its advanced technology, stealth capabilities, range, payload, and the complexity of its propulsion system. The firm fixed-price nature suggests cost risks are borne by the contractor, but the sole-source award means the baseline price may not reflect optimal market conditions.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing
Product/Service Code: GUIDED MISSLES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: KIRKEGAARDSVEIEN 45, KONGSBERG
Business Categories: Category Business, Foreign Owned, Manufacturer of Goods, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $209,846,578
Exercised Options: $209,846,578
Current Obligation: $209,846,578
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2024-05-31
Current End Date: 2027-09-30
Potential End Date: 2027-09-30 00:00:00
Last Modified: 2025-12-19
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