DoD Awards $396M Lockheed Martin Contract for Joint Air-to-Surface Standoff Missiles
Contract Overview
Contract Amount: $396,391,673 ($396.4M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2018-12-19
End Date: 2028-07-14
Contract Duration: 3,495 days
Daily Burn Rate: $113.4K/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 $396.4 million to LOCKHEED MARTIN CORPORATION for work described as: JOINT AIR TO SURFACE STANDOFF MISSILE Key points: 1. Significant investment in advanced missile technology by the Department of Defense. 2. Sole-source award to Lockheed Martin suggests limited competition or specialized capabilities. 3. Long contract duration (2018-2028) indicates a sustained need for these munitions. 4. High contract value points to the strategic importance and complexity of the weapon system.
Value Assessment
Rating: fair
The contract's Cost Plus Fixed Fee structure can lead to cost overruns if not managed carefully. Benchmarking against similar complex weapon system development contracts is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The 'NOT COMPETED' designation indicates a sole-source award, likely due to the specialized nature of the Joint Air-to-Surface Standoff Missile (JASSM) and Lockheed Martin's unique position as the developer and manufacturer. This limits price discovery and potentially increases costs for taxpayers.
Taxpayer Impact: The lack of competition may result in higher prices than if multiple vendors were involved, impacting the efficient use of taxpayer funds.
Public Impact
Enhances U.S. Air Force's long-range strike capabilities. Supports national defense objectives by providing advanced standoff weaponry. Potential for job creation within Lockheed Martin and its supply chain. Ensures continued availability of a critical defense asset.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus contract type
- Long contract duration
Positive Signals
- Strategic weapon system
- Sole provider capability
Sector Analysis
This contract falls within the Defense sector, specifically the manufacturing of guided missiles. Spending in this area is driven by national security needs and technological advancements in warfare. Benchmarks are highly specific to the weapon system's complexity and capabilities.
Small Business Impact
The data indicates this is a sole-source award to a large corporation, Lockheed Martin. There is no indication of small business participation in this specific contract award, suggesting opportunities may lie further down the supply chain.
Oversight & Accountability
The long-term nature and sole-source award warrant close oversight from the Department of Defense to ensure cost control and performance. Regular reviews of contract milestones and expenditures are crucial for accountability.
Related Government Programs
- Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award limits competition and price negotiation.
- Cost-plus contract type carries inherent risk of cost overruns.
- Long contract duration increases exposure to changing technological needs.
- Lack of transparency regarding specific justifications for sole-sourcing.
- Potential for contractor profit to increase with cost escalations.
Tags
other-guided-missile-and-space-vehicle-p, department-of-defense, fl, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $396.4 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 (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $396.4 million.
What is the period of performance?
Start: 2018-12-19. End: 2028-07-14.
What specific factors justified the sole-source award for the JASSM, and have alternatives been considered?
Sole-source awards are typically justified when a unique capability exists with only one provider, or for reasons of industrial security or urgent need. For the JASSM, Lockheed Martin's proprietary technology and established production line likely led to this determination. The Department of Defense would have internal processes to validate these justifications, though public details are often limited due to national security concerns.
How does the Cost Plus Fixed Fee (CPFF) structure impact the government's ability to control costs on this long-term missile contract?
CPFF contracts allow the contractor to recover allowable costs plus a predetermined fixed fee. While the fee is fixed, the total cost can fluctuate, potentially leading to higher overall spending if costs increase. Effective oversight, stringent cost accounting standards, and clear performance metrics are essential for the government to manage costs under this type of contract.
What is the projected obsolescence timeline for the JASSM, and how does this contract address future upgrades or replacements?
The contract runs until 2028, suggesting the JASSM is expected to remain a relevant capability through that period. However, the rapid pace of technological advancement in defense means obsolescence is a constant concern. This contract likely includes provisions for sustainment and potentially upgrades, but future replacement strategies would be addressed in subsequent acquisition programs.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing
Product/Service Code: GUIDED MISSLES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: FA868219R0008
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: $399,191,673
Exercised Options: $399,191,673
Current Obligation: $396,391,673
Subaward Activity
Number of Subawards: 173
Total Subaward Amount: $463,444,623
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2018-12-19
Current End Date: 2028-07-14
Potential End Date: 2028-07-14 00:00:00
Last Modified: 2026-01-06
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