DoD's $271M Joint Air-to-Surface Standoff Missile Contract Awarded to Lockheed Martin Raises Questions on Competition
Contract Overview
Contract Amount: $271,184,529 ($271.2M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2012-06-15
End Date: 2020-01-31
Contract Duration: 2,786 days
Daily Burn Rate: $97.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: JOINT AIR TO SURFACE STANDOFF MISSILE
Place of Performance
Location: ORLANDO, ORANGE County, FLORIDA, 32819
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $271.2 million to LOCKHEED MARTIN CORPORATION for work described as: JOINT AIR TO SURFACE STANDOFF MISSILE Key points: 1. The contract awarded to Lockheed Martin for the Joint Air-to-Surface Standoff Missile (JASSM) represents a significant investment in defense capabilities. 2. Competition for this specific missile system appears limited, potentially impacting price discovery and overall value for taxpayers. 3. The 'NOT COMPETED' status raises concerns about whether alternative solutions were adequately explored. 4. The sector is characterized by high R&D costs and long development cycles, making competition challenging but crucial for innovation.
Value Assessment
Rating: questionable
The contract's value of $271 million for the JASSM program needs further scrutiny against similar advanced missile systems. Without competitive bidding, it's difficult to ascertain if the pricing reflects market value or if there's potential for cost overruns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was awarded via a sole-source justification, indicating no other vendors were considered. This lack of competition limits the government's ability to leverage market forces to achieve the best possible price and terms.
Taxpayer Impact: The absence of competition may lead to higher costs for taxpayers compared to a scenario where multiple bidders vied for the contract.
Public Impact
Taxpayers may be paying a premium for advanced missile technology due to the lack of competitive bidding. The long-term sustainment and upgrade costs of the JASSM program could be impacted by the initial sole-source award. This contract highlights the ongoing challenge of ensuring competitive procurement for highly specialized defense systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for inflated costs
- Limited vendor options for future upgrades
Positive Signals
- Acquisition of critical defense capability
- Established relationship with a known prime contractor
Sector Analysis
The defense sector, particularly for advanced weaponry like guided missiles, often faces challenges in fostering robust competition due to high barriers to entry, specialized technology, and long development timelines. Benchmarks for similar complex weapon systems are difficult to establish without transparent pricing data.
Small Business Impact
There is no indication in the provided data that small businesses were involved in this specific contract award. Defense contracts of this magnitude often involve large prime contractors who may subcontract, but direct small business participation is not evident here.
Oversight & Accountability
The Department of Defense, through agencies like the Defense Contract Management Agency, is responsible for overseeing contract performance and ensuring compliance. However, the 'NOT COMPETED' status suggests that initial oversight may have focused more on justification than on driving competition.
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 cost overruns
- Limited transparency in pricing
- Dependency on a single supplier
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 $271.2 million to LOCKHEED MARTIN CORPORATION. JOINT AIR TO SURFACE STANDOFF MISSILE
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 $271.2 million.
What is the period of performance?
Start: 2012-06-15. End: 2020-01-31.
What was the specific justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered and rejected?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the absence of viable alternatives. For the JASSM, this could relate to specific performance requirements or integration needs. However, a thorough review would be needed to confirm if other competitive avenues were explored and deemed unsuitable, ensuring the government acted in its best interest.
How does the unit cost of the JASSM compare to similar advanced air-to-surface missiles procured competitively by other nations or the US military in the past?
Without access to detailed cost breakdowns and competitive benchmarking data, a direct comparison is challenging. However, sole-source contracts often carry a risk of higher unit costs compared to competitively awarded programs. Analyzing publicly available data on similar missile systems, adjusting for technological advancements and inflation, could provide an indicative range for comparison.
What measures are in place to ensure effective oversight and accountability for this contract, given the lack of initial competition?
Oversight for sole-source contracts typically involves rigorous performance monitoring, milestone tracking, and cost audits to ensure the contractor meets all requirements and stays within budget. Accountability is maintained through contract clauses, performance metrics, and the potential for future contract modifications or termination if performance falters. Regular reviews by the contracting officer are essential.
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: 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: $542,457,662
Exercised Options: $273,393,947
Current Obligation: $271,184,529
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2012-06-15
Current End Date: 2020-01-31
Potential End Date: 2020-01-31 00:00:00
Last Modified: 2024-08-01
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