DoD Awards $775M for Joint Air-to-Surface Missile Production to Lockheed Martin
Contract Overview
Contract Amount: $774,954,150 ($775.0M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2015-10-09
End Date: 2022-08-31
Contract Duration: 2,518 days
Daily Burn Rate: $307.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: JOINT AIR-TO-SURFACE STRIKE MISSILE LOT 13 PRODUCTION BUY
Place of Performance
Location: ORLANDO, ORANGE County, FLORIDA, 32819
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $775.0 million to LOCKHEED MARTIN CORPORATION for work described as: JOINT AIR-TO-SURFACE STRIKE MISSILE LOT 13 PRODUCTION BUY Key points: 1. Significant investment in advanced missile technology. 2. Sole-source award to Lockheed Martin raises competition concerns. 3. Potential for cost overruns due to fixed-price incentive contract type. 4. Missile production falls within the Guided Missile and Space Vehicle Manufacturing sector.
Value Assessment
Rating: fair
The $775 million contract value for Lot 13 production is substantial. Benchmarking against similar missile production contracts is difficult without more detailed cost breakdowns, but the fixed-price incentive structure suggests potential for cost growth if targets are missed.
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 lack of competition limits price discovery and potentially leads to higher costs for the government.
Taxpayer Impact: The sole-source nature of this award means taxpayers may be paying a premium due to the absence of competitive bidding, impacting overall value for money.
Public Impact
Enhances U.S. Air Force strike capabilities with advanced munitions. Supports critical defense industrial base and associated jobs. Long-term sustainment and upgrade potential for a key weapon system.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price negotiation.
- Fixed-price incentive contract carries risk of cost overruns.
- Lack of detailed cost data hinders value assessment.
Positive Signals
- Procures a critical defense asset.
- Supports established defense contractor.
- Long-term production run indicates program maturity.
Sector Analysis
This contract falls under the Guided Missile and Space Vehicle Manufacturing sector, a high-value area within defense. Spending benchmarks for similar large-scale missile production buys are typically in the hundreds of millions, aligning with this award.
Small Business Impact
The contract data does not indicate any specific provisions or subcontracts for small businesses. Large sole-source awards often bypass small business participation unless explicitly mandated.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny from oversight bodies to ensure fair pricing and justification. Robust contract management by the Department of the Air Force is crucial to mitigate risks.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award
- Fixed-price incentive contract risk
- Lack of competition
- Potential for cost overruns
- Limited small business participation
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 $775.0 million to LOCKHEED MARTIN CORPORATION. JOINT AIR-TO-SURFACE STRIKE MISSILE LOT 13 PRODUCTION BUY
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 $775.0 million.
What is the period of performance?
Start: 2015-10-09. End: 2022-08-31.
What is the justification for the sole-source award, and were alternative competitive strategies considered?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the need for commonality with existing systems. Without specific documentation, it's difficult to ascertain if alternative competitive strategies were thoroughly explored. Agencies must demonstrate that competition is not feasible or would not be in the government's best interest.
How does the fixed-price incentive structure manage cost risks for taxpayers?
A fixed-price incentive (FPI) contract establishes a target cost, target profit, and a price ceiling. If the final cost is below the target, both the contractor and the government share in the savings. Conversely, if costs exceed the target, the contractor bears a portion of the overrun up to the ceiling. This structure incentivizes cost control but still exposes the government to potential cost increases if targets are missed.
What is the long-term strategic value of this missile system to the Air Force's operational effectiveness?
The Joint Air-to-Surface Strike Missile (JASSM) is a key component of the Air Force's precision strike capabilities, designed to engage heavily defended targets. Its long-range, stealthy characteristics and adaptability across various platforms provide significant operational flexibility and deterrence. Continued production ensures the availability of this critical asset for current and future mission requirements.
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: FIXED PRICE INCENTIVE (L)
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: $774,954,150
Exercised Options: $774,954,150
Current Obligation: $774,954,150
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2015-10-09
Current End Date: 2022-08-31
Potential End Date: 2022-08-31 00:00:00
Last Modified: 2025-08-13
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