DoD awards $213M Lot 8 Production contract to Lockheed Martin for guided missiles
Contract Overview
Contract Amount: $212,878,206 ($212.9M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2010-01-20
End Date: 2013-12-31
Contract Duration: 1,441 days
Daily Burn Rate: $147.7K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: LOT 8 PRODUCTION
Place of Performance
Location: ORLANDO, ORANGE County, FLORIDA, 32819
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $212.9 million to LOCKHEED MARTIN CORPORATION for work described as: LOT 8 PRODUCTION Key points: 1. Significant contract value of $212.8M for missile production. 2. Sole-source award to Lockheed Martin, limiting competitive options. 3. Risk of higher costs due to lack of competition. 4. Sector: Defense - Guided Missile and Space Vehicle Manufacturing.
Value Assessment
Rating: questionable
The contract value of $212.8M is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential market alternatives. Benchmarking against similar missile production contracts would be necessary for a definitive valuation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Lockheed Martin. This limits price discovery and potentially leads to higher costs for taxpayers as there was no competitive pressure to drive down the price.
Taxpayer Impact: The lack of competition on this $213M contract may result in taxpayers paying a premium for guided missile production.
Public Impact
Taxpayers may be overpaying for critical defense hardware due to the sole-source nature of the award. The long contract duration (over 3 years) means sustained potential for inflated costs. Lack of transparency in pricing due to no competitive bidding process.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for cost overruns
- Limited transparency
Positive Signals
- Award to established defense contractor
- Firm Fixed Price contract type
Sector Analysis
This contract falls within the Defense sector, specifically Guided Missile and Space Vehicle Manufacturing. Spending in this niche area is often characterized by high R&D costs and specialized production capabilities, which can sometimes justify limited competition.
Small Business Impact
The data indicates no specific provisions or set-asides for small businesses in this contract. Large sole-source awards often bypass small business participation unless they are subcontractors to the prime.
Oversight & Accountability
The contract was managed by the Defense Contract Management Agency. Oversight would focus on contract performance, quality assurance, and adherence to terms, but the primary concern remains the initial lack of competitive pricing.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competitive bidding
- Potential for inflated pricing
- Limited transparency in cost determination
- Sustained taxpayer burden over contract duration
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, fl, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $212.9 million to LOCKHEED MARTIN CORPORATION. LOT 8 PRODUCTION
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 $212.9 million.
What is the period of performance?
Start: 2010-01-20. End: 2013-12-31.
What was the justification for awarding this contract on a sole-source basis instead of seeking competitive bids?
The justification for a sole-source award typically involves factors such as unique capabilities, proprietary technology, or urgent national security needs that only one contractor can meet. Without specific documentation, it's presumed that DoD determined Lockheed Martin possessed the exclusive ability to fulfill the requirements for Lot 8 production, thereby bypassing the standard competitive procurement process.
How does the firm fixed price (FFP) contract type mitigate risks associated with sole-source awards?
While a Firm Fixed Price contract aims to fix the price regardless of the contractor's cost, its effectiveness in mitigating sole-source risks is limited. FFP provides cost certainty for the buyer, but if the initial price was not competitively determined, it may simply lock in a higher-than-necessary cost. The government still bears the risk of paying a premium if the baseline price was inflated due to lack of competition.
What is the potential long-term impact on defense spending if sole-source contracts for critical components become the norm?
A trend towards sole-source contracts for critical components could significantly inflate long-term defense spending. Without competitive pressure, contractors may have less incentive to innovate or reduce costs. This could lead to a less efficient allocation of taxpayer funds and potentially hinder the development of alternative or more cost-effective defense solutions in the future.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle 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
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: 5600 W SAND LAKE RD # MP-265, ORLANDO, FL, 32819
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $213,201,476
Exercised Options: $213,201,476
Current Obligation: $212,878,206
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2010-01-20
Current End Date: 2013-12-31
Potential End Date: 2013-12-31 00:00:00
Last Modified: 2019-04-30
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