DoD awards $44M for JASSM missile production to Lockheed Martin, a sole-source contract

Contract Overview

Contract Amount: $44,027,713 ($44.0M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2020-03-20

End Date: 2024-11-30

Contract Duration: 1,716 days

Daily Burn Rate: $25.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: JOINT AIR-TO-SURFACE STANDOFF MISSILE (JASSM) ITIK BUY 2

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32819

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $44.0 million to LOCKHEED MARTIN CORPORATION for work described as: JOINT AIR-TO-SURFACE STANDOFF MISSILE (JASSM) ITIK BUY 2 Key points: 1. Contract awarded for guided missile and space vehicle manufacturing. 2. Significant portion of spending allocated to a single, established contractor. 3. Contract duration spans over four years, indicating a long-term need. 4. Fixed-price contract type aims to control costs for the government. 5. No small business set-aside, suggesting focus on large prime contractors. 6. Geographic location of performance is Florida.

Value Assessment

Rating: fair

The contract value of $44 million for the Joint Air-to-Surface Standoff Missile (JASSM) ITIK Buy 2 appears to be a standard procurement for this type of advanced weaponry. Without specific unit cost data or comparable contract benchmarks for JASSM variants, a precise value-for-money assessment is challenging. However, given the specialized nature of guided missile manufacturing and the sole-source award, the pricing is likely negotiated based on established production costs and historical data. The fixed-price nature provides some cost certainty, but the lack of competition limits the potential for aggressive price reductions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Lockheed Martin Corporation, was solicited. This approach is often used for highly specialized or proprietary systems where only one entity possesses the necessary technology, manufacturing capabilities, or intellectual property. The lack of competition means the government did not benefit from a bidding process that could drive down prices through market forces. Instead, the price is likely determined through negotiation based on the contractor's proposed costs and the government's assessment of fair and reasonable pricing.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to ensure the lowest possible price. The government must rely heavily on its negotiation and oversight capabilities to secure a fair deal.

Public Impact

The primary beneficiaries are the U.S. Air Force, receiving advanced missile systems for strategic defense capabilities. The contract supports the production and delivery of Joint Air-to-Surface Standoff Missiles (JASSM). Performance is located in Florida, potentially impacting the local aerospace and defense workforce. This procurement contributes to the U.S. military's offensive and defensive air power projection capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in the negotiation process for sole-source contracts.
Long contract duration could lead to cost overruns if not managed effectively.
Reliance on a single contractor for critical defense systems poses supply chain risks.

Positive Signals

Fixed-price contract type provides cost predictability for the government.
Award to an established contractor with a proven track record in missile production.
Contract duration aligns with long-term defense planning and sustainment needs.
Performance in Florida may leverage existing specialized industrial infrastructure.

Sector Analysis

The defense sector, specifically guided missile and space vehicle manufacturing, is characterized by high technological barriers to entry and significant government investment. Lockheed Martin is a dominant player in this market. This contract for JASSM, a key component of air power, fits within the broader landscape of strategic weapons systems procurement. Spending in this area is driven by national security requirements and technological advancements, with contracts often being large and long-term due to the complexity and cost of development and production.

Small Business Impact

This contract does not appear to include a small business set-aside, as indicated by the 'sb' field being false. This suggests that the primary contract was awarded directly to Lockheed Martin Corporation, a large prime contractor. While there may be subcontracting opportunities for small businesses within the performance of this contract, the initial award does not prioritize small business participation. The impact on the small business ecosystem is indirect, relying on the prime contractor's subcontracting plans.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices, specifically within the Department of the Air Force. Accountability measures are embedded in the contract terms, including delivery schedules and performance specifications. Transparency is limited due to the sole-source nature of the award, but contract awards and basic details are publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Advanced Conventional Ammunition
Missile Systems Procurement
Air Force Weapon Systems
Strategic Deterrence Programs

Risk Flags

Sole-source award limits competitive pricing.
Lack of detailed cost breakdown hinders precise value assessment.
Potential for supply chain vulnerabilities in specialized component manufacturing.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $44.0 million to LOCKHEED MARTIN CORPORATION. JOINT AIR-TO-SURFACE STANDOFF MISSILE (JASSM) ITIK BUY 2

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 $44.0 million.

What is the period of performance?

Start: 2020-03-20. End: 2024-11-30.

What is the historical spending trend for JASSM or similar missile systems by the Department of Defense?

Historical spending on the Joint Air-to-Surface Standoff Missile (JASSM) program and its variants, such as the AGM-158, has been substantial over the years. The Department of Defense, primarily through the Air Force and Navy, has consistently funded the procurement and sustainment of these long-range, stealthy cruise missiles. Annual obligations have varied based on production rates, modernization efforts, and specific buy quantities. For instance, in fiscal years prior to this award, significant multi-million dollar procurements were common, reflecting the strategic importance and unit cost of such advanced weapon systems. Analyzing past budgets reveals a sustained commitment to maintaining and expanding the JASSM inventory, often involving multi-year contracts to achieve economies of scale and ensure production continuity. This $44 million award represents a continuation of that established spending pattern for this critical capability.

How does the unit cost of the JASSM missile compare to other similar air-to-surface missiles in the DoD's inventory?

Determining the precise unit cost for the JASSM under this specific $44 million contract is not possible without detailed breakdowns of quantities and contract line item numbers. However, based on publicly available data from previous JASSM procurements and defense budget documents, the unit cost for JASSM variants has historically ranged from approximately $700,000 to over $1 million per missile. This positions the JASSM as a high-value, precision-guided munition. When compared to other advanced air-to-surface missiles, such as the Tomahawk (which can have a higher unit cost due to its naval launch capability and different operational profile) or smaller guided rockets, the JASSM falls within the upper tier of cost for standoff munitions. Its cost reflects its advanced capabilities, including stealth, range, and payload.

What are the key performance metrics or capabilities that justify the cost of the JASSM missile?

The Joint Air-to-Surface Standoff Missile (JASSM) is a high-cost, high-capability weapon system designed for long-range, precision strikes against heavily defended targets. Its justification stems from several key performance metrics. Firstly, its significant range (over 200 nautical miles for JASSM-ER) allows aircraft to engage targets from a safe distance, reducing risk to aircrews and platforms. Secondly, its stealthy design and low-observable characteristics make it difficult for enemy air defenses to detect and track, increasing its probability of mission success. Thirdly, it carries a significant warhead capable of defeating a wide range of hardened and high-value targets. The precision guidance ensures a high probability of kill against intended targets. These advanced capabilities, requiring sophisticated technology, materials, and manufacturing processes, inherently contribute to a higher unit cost compared to simpler munitions.

What is Lockheed Martin's track record with the JASSM program and other similar DoD contracts?

Lockheed Martin Corporation has an extensive and well-established track record as the prime contractor for the Joint Air-to-Surface Standoff Missile (JASSM) program. They have been responsible for the development, production, and sustainment of JASSM and its extended-range variant (JASSM-ER) for many years. Their performance on this program is generally considered strong, marked by the successful integration of advanced technologies and consistent delivery of missiles meeting stringent military specifications. Beyond JASSM, Lockheed Martin is a major defense contractor with a broad portfolio, including numerous other missile systems (e.g., Patriot PAC-3, HIMARS rockets), aircraft, and space systems. Their long history of delivering complex defense programs to the DoD, often under sole-source or limited-competition arrangements, demonstrates significant experience and capability in managing large-scale, high-technology production contracts.

Are there any known risks associated with the production or performance of the JASSM missile?

While the JASSM is a mature and proven weapon system, potential risks can still exist. Production risks primarily revolve around supply chain disruptions for specialized components, potential cost increases from raw material fluctuations, and maintaining the highly skilled workforce required for advanced manufacturing. Performance risks, though less common for a system that has undergone extensive testing and operational deployment, could theoretically include issues related to software updates, integration with evolving aircraft platforms, or degradation of components over long storage periods. Furthermore, as with any sole-source contract, there's an inherent risk of complacency from the contractor regarding cost efficiency or innovation, which necessitates robust government oversight. The Department of Defense actively manages these risks through contract clauses, performance monitoring, and strategic sourcing initiatives.

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

Pricing Type: FIRM FIXED PRICE (J)

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: $44,674,465

Exercised Options: $44,674,465

Current Obligation: $44,027,713

Actual Outlays: $300,403

Subaward Activity

Number of Subawards: 18

Total Subaward Amount: $9,608,647

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA868217D0002

IDV Type: IDC

Timeline