DoD awards $56M for Hypersonic Conventional Strike Weapon PDR, with Lockheed Martin as prime

Contract Overview

Contract Amount: $55,963,099 ($56.0M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2019-01-03

End Date: 2021-02-10

Contract Duration: 769 days

Daily Burn Rate: $72.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: COST NO FEE

Sector: R&D

Official Description: HYPERSONIC CONVENTIONAL STRIKE WEAPON PRELIMINARY DESIGN REVIEW (PDR)

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35805

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $56.0 million to LOCKHEED MARTIN CORPORATION for work described as: HYPERSONIC CONVENTIONAL STRIKE WEAPON PRELIMINARY DESIGN REVIEW (PDR) Key points: 1. Contract focuses on preliminary design review for a critical defense capability. 2. Competition was full and open after exclusion of sources, indicating a deliberate selection process. 3. The contract duration of 769 days suggests a substantial scope for the preliminary design phase. 4. This award falls under R&D for physical sciences, highlighting investment in advanced technological development. 5. The prime contractor, Lockheed Martin, has extensive experience in aerospace and defense systems. 6. The contract type is Cost No Fee, which shifts risk to the contractor for cost overruns. 7. The award value of approximately $56 million is significant for a preliminary design phase.

Value Assessment

Rating: good

The contract value of $55.96 million for a preliminary design review appears reasonable given the complexity of developing a hypersonic weapon system. Benchmarking against similar R&D contracts for advanced weapon systems suggests this is within the expected range for early-stage development. The Cost No Fee (CNF) contract type implies the government is not obligated to pay for costs exceeding the agreed-upon amount, which can be a favorable structure for the government if managed effectively. However, without specific cost breakdowns or comparisons to alternative proposals, a definitive value-for-money assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the competition was initially intended to be broad, specific sources were excluded, potentially due to specialized capabilities or prior involvement. The exact number of bidders is not specified, but the 'exclusion of sources' suggests a more targeted approach than a purely open competition. This method can sometimes lead to fewer bidders, potentially impacting price discovery, but may be justified if only a few entities possess the requisite expertise for such a complex technological endeavor.

Taxpayer Impact: While the competition was not fully open, the exclusion of sources was likely based on specific technical requirements. Taxpayers benefit from ensuring that the most capable contractors are considered for highly specialized defense projects, even if it narrows the initial pool.

Public Impact

The primary beneficiaries are the Department of Defense and the U.S. Air Force, seeking to advance hypersonic strike capabilities. The services delivered include preliminary design review, research, and development for a new weapon system. The geographic impact is primarily within the United States, focusing on research and development activities. Workforce implications include highly skilled engineers, scientists, and technical personnel involved in advanced aerospace R&D.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns under the Cost No Fee structure if not meticulously managed.
Limited competition due to exclusion of sources could impact long-term cost efficiency.
Technological risks inherent in developing novel hypersonic systems.
Dependence on a single prime contractor for critical early-stage development.

Positive Signals

Award to a prime contractor with proven expertise in advanced aerospace and defense.
Focus on preliminary design review suggests a structured approach to risk mitigation.
Investment in a capability deemed critical for national security.
Cost No Fee contract places cost control responsibility on the contractor.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical sciences. The market for advanced aerospace and defense technologies, particularly hypersonic systems, is highly specialized and dominated by a few large defense contractors. Spending in this area is driven by national security priorities and technological advancement. Comparable spending benchmarks would typically involve other advanced weapon system development contracts, which often represent significant investments due to their complexity and strategic importance.

Small Business Impact

The contract data indicates that small business participation (sb) is false, and there is no indication of a small business set-aside. This suggests that the prime contract was not specifically targeted towards small businesses. Subcontracting opportunities for small businesses may exist within the larger scope of work, but this is not explicitly detailed in the provided data. The overall impact on the small business ecosystem for this specific contract appears minimal, as it is a large prime award to an established corporation.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Air Force contracting and program management offices. Accountability measures are embedded within the Cost No Fee contract structure, where the contractor bears the financial risk of cost overruns. Transparency is generally maintained through contract reporting requirements, though specific details of the design review process may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Advanced Conventional Strike Programs
Hypersonic Weapons Development
Air Force Research Laboratory Contracts
Department of Defense R&D Spending
Aerospace Engineering Services

Risk Flags

Potential for cost overruns due to high R&D uncertainty.
Limited competition may impact long-term cost-effectiveness.
Technological maturity and integration risks.
Dependence on a single contractor for critical early design.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $56.0 million to LOCKHEED MARTIN CORPORATION. HYPERSONIC CONVENTIONAL STRIKE WEAPON PRELIMINARY DESIGN REVIEW (PDR)

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 $56.0 million.

What is the period of performance?

Start: 2019-01-03. End: 2021-02-10.

What is Lockheed Martin's track record with similar advanced weapon system development contracts for the DoD?

Lockheed Martin Corporation has a long and extensive track record of developing complex weapon systems for the Department of Defense, including numerous advanced aerospace and missile programs. They have been a prime contractor on many high-profile projects involving cutting-edge technologies, such as fighter jets (e.g., F-35), ballistic missiles, and space systems. Their experience in areas like aerodynamics, propulsion, materials science, and systems integration is directly relevant to hypersonic weapon development. While specific performance metrics for all past contracts are not publicly available, their consistent selection as a prime contractor for major defense initiatives suggests a strong performance history and a high degree of confidence from the DoD in their capabilities to deliver on complex technological challenges.

How does the $56 million award for preliminary design compare to other hypersonic R&D efforts?

The $56 million award for the Preliminary Design Review (PDR) of the Hypersonic Conventional Strike Weapon is a significant but not unusual figure for the early stages of developing highly complex, next-generation military capabilities. Preliminary design phases for advanced weapon systems often involve substantial investment to mature concepts, assess feasibility, define system architecture, and identify key technological risks. Compared to broader R&D programs, this figure represents a focused investment on a specific system's initial conceptualization and design. Other hypersonic R&D efforts, such as those by the Missile Defense Agency or DARPA, have also seen multi-million dollar awards for various phases, including component development, system integration, and flight testing. The PDR phase is critical for setting the foundation for subsequent development and testing, justifying the substantial upfront investment.

What are the primary technical risks associated with developing hypersonic conventional strike weapons?

Developing hypersonic conventional strike weapons involves significant technical risks across multiple domains. Key challenges include materials science, particularly developing materials that can withstand the extreme temperatures and pressures generated by hypersonic flight (Mach 5+). Propulsion systems are another major hurdle, requiring advanced engines capable of sustained hypersonic speeds. Aerodynamic control and stability at these speeds are complex, demanding sophisticated flight control systems. Furthermore, integrating these advanced components into a reliable and effective weapon system, ensuring survivability in contested environments, and achieving the desired range and accuracy present substantial engineering challenges. The preliminary design phase aims to identify and begin mitigating these risks.

What is the significance of the 'Cost No Fee' (CNF) contract type for this R&D effort?

The 'Cost No Fee' (CNF) contract type is significant because it places the primary financial risk on the contractor, Lockheed Martin. In a CNF contract, the government agrees to pay the contractor's allowable costs but does not pay any fee or profit. This structure is typically used when the level of risk or uncertainty is high, or when the contractor's ability to control costs is paramount. For the government, it means they are not obligated to pay profit if costs escalate beyond expectations. For the contractor, it incentivizes rigorous cost management and efficiency, as any cost overruns must be absorbed by the company. This type of contract is often employed in research and development settings where the final costs are difficult to predict accurately.

How does this contract align with broader U.S. military strategies regarding hypersonic capabilities?

This contract aligns directly with the stated strategic priorities of the U.S. Department of Defense and the Air Force to develop and field advanced hypersonic capabilities. Hypersonic weapons are seen as a critical component of future military power, offering advantages in speed, maneuverability, and range that can penetrate advanced adversary defenses. The investment in preliminary design signifies a commitment to maturing these technologies from conceptual stages towards potential deployment. It reflects a broader global trend where major military powers are investing heavily in hypersonic research and development, making it a key area of focus for maintaining strategic deterrence and conventional military advantage.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: FA868218R1003

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Address: 4800 BRADFORD DR NW, HUNTSVILLE, AL, 35805

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

Financial Breakdown

Contract Ceiling: $56,254,832

Exercised Options: $56,254,832

Current Obligation: $55,963,099

Actual Outlays: $-68,056

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA868218D0003

IDV Type: IDC

Timeline