DoD's $106M R&D contract with Lockheed Martin shows long-term engagement in advanced technology development

Contract Overview

Contract Amount: $106,428,895 ($106.4M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2004-02-20

End Date: 2009-07-31

Contract Duration: 1,988 days

Daily Burn Rate: $53.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: R&D

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32819

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $106.4 million to LOCKHEED MARTIN CORPORATION for work described as: Key points: 1. Contract awarded for research and development, indicating investment in future capabilities. 2. Sole-source award suggests unique capabilities or limited market alternatives for this specific need. 3. Long contract duration (over 5 years) implies a sustained R&D effort and potential for evolving requirements. 4. Cost-plus award fee structure incentivizes contractor performance while managing cost uncertainty. 5. Significant investment in a single contractor warrants scrutiny of ongoing value and innovation. 6. Focus on R&D in physical, engineering, and life sciences points to critical national security or technological advancements.

Value Assessment

Rating: fair

Benchmarking the value of this specific R&D contract is challenging due to its specialized nature and sole-source award. The cost-plus award fee structure allows for flexibility but requires diligent oversight to ensure costs remain reasonable and performance targets are met. Without comparable sole-source R&D contracts for similar advanced technologies, a direct price comparison is difficult. The total award amount of over $106 million over nearly 2000 days suggests a substantial, long-term investment in innovation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when a specific contractor possesses unique capabilities, intellectual property, or is the only source capable of meeting the government's requirements. The lack of competition means there was no opportunity for price discovery through a bidding process, potentially leading to higher costs than if multiple vendors had competed.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. The government relied on negotiation and oversight to ensure a fair price, but the lack of alternatives limits leverage.

Public Impact

The primary beneficiaries are the Department of Defense, which gains access to advanced research and development capabilities. The contract supports the development of new technologies and scientific advancements relevant to national security. Work is likely concentrated in Florida, where Lockheed Martin has significant operations, potentially impacting the local high-tech workforce. The research could lead to future defense systems, enhancing military readiness and technological superiority.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Cost-plus award fee structure requires robust government oversight to prevent cost overruns.
Long contract duration could lead to scope creep or evolving requirements that are not fully optimized.
Lack of transparency inherent in sole-source R&D can make it difficult to assess true value for money.

Positive Signals

Award to a major defense contractor like Lockheed Martin suggests access to established expertise and infrastructure.
Focus on R&D indicates a commitment to innovation and future technological advantage.
Cost-plus award fee structure can incentivize performance and quality in complex R&D projects.
Long-term engagement allows for deep development and refinement of advanced technologies.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. This is a critical area for defense innovation, often involving significant investment in cutting-edge technologies. The market for such specialized R&D is typically concentrated among a few large, experienced defense contractors. Comparable spending benchmarks are difficult to establish due to the unique nature of R&D and sole-source awards, but significant government investment in R&D is a consistent feature of defense budgets.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. Given the sole-source nature and the prime contractor being Lockheed Martin, it is unlikely that significant subcontracting opportunities for small businesses were mandated or actively sought through a competitive process. The focus is on the prime contractor's capabilities, potentially limiting direct opportunities for small businesses unless they are pre-existing suppliers to Lockheed Martin.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Contract Management Agency (DCMA). As a cost-plus award fee contract, rigorous financial and performance monitoring is expected. The government would need to ensure that costs are allowable, allocable, and reasonable, and that the contractor meets performance objectives to earn award fees. Transparency may be limited due to the sole-source nature and the proprietary aspects of R&D.

Related Government Programs

Advanced Technology Development Programs
Research, Development, Test, and Evaluation (RDT&E)
Defense Science and Technology
Lockheed Martin Corporation Contracts

Risk Flags

Sole-source award limits competitive pricing.
Cost-plus award fee requires diligent oversight to manage costs.
Long contract duration increases risk of scope creep or obsolescence.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $106.4 million to LOCKHEED MARTIN CORPORATION. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $106.4 million.

What is the period of performance?

Start: 2004-02-20. End: 2009-07-31.

What specific research and development areas were covered under this contract?

The contract specifies 'Research and Development in the Physical, Engineering, and Life Sciences' (NAICS code 541710). While the exact technical details of the R&D are not provided in the summary data, this broad classification suggests work in areas such as advanced materials, physics, engineering disciplines, biotechnology, or other scientific fields critical to defense applications. The specific focus would have been detailed in the contract's Statement of Work (SOW), which is not publicly available in this data extract. Given the prime contractor and the Department of Defense as the agency, the R&D likely aimed at developing next-generation military technologies, enhancing existing systems, or exploring novel scientific concepts with potential defense implications.

How does the $106 million award compare to typical R&D spending for similar projects?

Comparing this $106 million award to 'typical' R&D spending is challenging due to the sole-source nature and the specialized focus of defense R&D. R&D contracts can vary immensely in cost based on the complexity, duration, and technological risk involved. For a sole-source contract awarded to a major defense contractor like Lockheed Martin, this amount suggests a significant, long-term investment in a specific technological area. While not directly comparable without knowing the specific R&D scope, it falls within the range of large-scale, multi-year R&D initiatives undertaken by the DoD. The cost-plus award fee structure also implies that the final cost could fluctuate based on performance, making a fixed benchmark difficult.

What are the primary risks associated with a sole-source, cost-plus award fee R&D contract?

The primary risks associated with this contract type are multifaceted. For a sole-source award, the main risk is the lack of price competition, potentially leading to higher costs than a competed contract. The government has less leverage to negotiate the lowest possible price. For a cost-plus award fee (CPAF) structure, the risk lies in cost control; while the contractor is reimbursed for allowable costs, the 'award fee' component incentivizes performance. However, without stringent oversight, costs can escalate. In R&D, there's also the inherent risk of technical failure – the research may not yield the desired results despite significant investment. Finally, the long duration increases the risk of scope creep or requirements becoming outdated before the project concludes.

What is Lockheed Martin's track record with similar DoD R&D contracts?

Lockheed Martin Corporation is one of the largest defense contractors globally and has an extensive track record of performing complex Research and Development (R&D) contracts for the Department of Defense (DoD) across various domains, including aerospace, defense systems, and advanced technologies. They are consistently awarded significant R&D funding for developing cutting-edge platforms and systems. Their history includes numerous large-scale, sole-source, and competed R&D efforts. While specific performance metrics for individual contracts are not publicly detailed, their continued success in securing substantial R&D awards from the DoD indicates a generally strong performance record and perceived capability in meeting the government's advanced technological needs.

How does the contract duration of nearly 2000 days impact the project's effectiveness and cost?

A contract duration of nearly 2000 days (approximately 5.5 years) for an R&D project allows for in-depth research, development, and potential refinement of complex technologies. This extended timeframe can be beneficial for projects involving significant scientific uncertainty or requiring iterative development cycles. It provides stability for the contractor and allows for a sustained focus on achieving long-term objectives. However, such long durations also increase the risk of project scope becoming misaligned with evolving requirements or technological advancements. It necessitates robust program management and flexibility to adapt. From a cost perspective, a longer duration naturally leads to higher overall expenditure, but the cost per day or per year might be more controlled compared to shorter, more intensive efforts, depending on the CPAF structure and performance.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 5600 WEST SAND LAKE ROAD, ORLANDO, FL, 90

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline