DoD awards $61.9M for JASSM software, with Lockheed Martin as sole source

Contract Overview

Contract Amount: $61,885,116 ($61.9M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2021-04-21

End Date: 2025-07-31

Contract Duration: 1,562 days

Daily Burn Rate: $39.6K/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 (JASSM) ENTERPRISE MANAGEMENT SOFTWARE

Place of Performance

Location: KING OF PRUSSIA, MONTGOMERY County, PENNSYLVANIA, 19406

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $61.9 million to LOCKHEED MARTIN CORPORATION for work described as: JOINT AIR TO SURFACE STANDOFF MISSILE (JASSM) ENTERPRISE MANAGEMENT SOFTWARE Key points: 1. Contract awarded to Lockheed Martin for enterprise management software supporting the JASSM program. 2. The contract is a sole-source award, indicating limited competition. 3. The contract duration is over 1500 days, suggesting a long-term need for the software. 4. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 5. The award is managed by the Department of the Air Force, a key branch within the DoD. 6. The specific product service code is not detailed, but the North American Industry Classification System code points to missile and space vehicle parts manufacturing.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without specific performance metrics or comparable contract data. The Cost Plus Fixed Fee structure, while common for complex R&D or production, carries inherent risks of cost escalation. The absence of competition further limits the ability to assess if the pricing represents a fair market value. However, the award amount of $61.9 million over approximately four years suggests a significant investment in specialized software for a critical defense asset.

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 considered. This typically occurs when a specific contractor possesses unique capabilities, intellectual property, or is the sole provider of a required good or service. The lack of competition means that the government did not explore alternative solutions or pricing from other potential vendors, which could limit price discovery and potentially lead to higher costs.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive bidding. Without competing offers, there is less pressure on the contractor to offer the most cost-effective solution.

Public Impact

The primary beneficiaries are the Department of the Air Force and the broader Department of Defense, who will receive enhanced enterprise management software for the JASSM program. The software is intended to support the Joint Air to Surface Standoff Missile (JASSM) enterprise, likely improving its lifecycle management, logistics, and operational readiness. The geographic impact is primarily within the United States, where the Air Force operates and maintains its JASSM assets. Workforce implications may include the need for specialized IT personnel to manage and utilize the software, as well as potential impacts on the Lockheed Martin workforce involved in its development and support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Cost Plus Fixed Fee contract type can incentivize cost overruns if not rigorously managed.
Lack of detailed performance metrics makes it difficult to assess the true value for money.
The contract is for software, which can become outdated quickly, raising questions about long-term viability and upgrade costs.

Positive Signals

Supports a critical defense asset (JASSM), indicating a necessary capability for national security.
Awarded to a known defense contractor (Lockheed Martin) with established experience in missile systems.
The contract duration suggests a sustained commitment to improving the JASSM program's management.
The software is intended to enhance enterprise management, potentially leading to improved efficiency and readiness.

Sector Analysis

The defense sector, particularly within aerospace and defense manufacturing, relies heavily on specialized software for program management, logistics, and operational support. The market for such enterprise management software is often dominated by large, established defense contractors who have deep integration with existing defense systems. While specific market size data for JASSM enterprise software is not publicly available, the overall spending on defense software and IT solutions runs into billions of dollars annually. This contract fits within the broader trend of the DoD investing in advanced technologies to maintain its technological edge.

Small Business Impact

This contract does not appear to include a small business set-aside. Given the sole-source nature of the award to Lockheed Martin Corporation, it is unlikely that significant subcontracting opportunities for small businesses will be mandated or readily available through competitive bidding on this specific contract. The focus is on a large, prime contractor managing a specialized software solution.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures would be defined within the Cost Plus Fixed Fee contract terms, focusing on cost reporting, progress milestones, and final delivery. Transparency may be limited due to the sole-source nature and the classified or sensitive aspects of defense programs. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Joint Air to Surface Standoff Missile (JASSM) Program
Department of Defense Enterprise Software Procurement
Aerospace and Defense Software Development
Lockheed Martin Defense Contracts

Risk Flags

Sole-source award limits competition.
Cost Plus Fixed Fee contract type carries risk of cost overruns.
Lack of detailed public performance metrics hinders value assessment.
Potential for vendor lock-in due to specialized software.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $61.9 million to LOCKHEED MARTIN CORPORATION. JOINT AIR TO SURFACE STANDOFF MISSILE (JASSM) ENTERPRISE MANAGEMENT SOFTWARE

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 $61.9 million.

What is the period of performance?

Start: 2021-04-21. End: 2025-07-31.

What is Lockheed Martin's track record with similar enterprise management software contracts for defense programs?

Lockheed Martin Corporation has a long and extensive history of developing and managing complex software systems for various defense programs, including missile systems. They are a major defense contractor with significant experience in enterprise resource planning (ERP), logistics management, and program management software tailored to the unique requirements of military operations. While specific details on past JASSM-related software contracts are not readily available in the public domain, their overall portfolio suggests a strong capability in this area. However, the success and cost-effectiveness of such large-scale software projects can vary, and past performance on similar contracts would need to be thoroughly reviewed by the contracting agency to ensure value and reliability.

How does the $61.9 million cost compare to similar JASSM software or enterprise management solutions?

Direct cost comparisons for this specific JASSM enterprise management software are difficult due to its specialized nature and the sole-source award. Publicly available data on comparable contracts for similar niche defense software solutions is scarce. However, the award amount of approximately $61.9 million over roughly four years (from April 2021 to July 2025) averages around $15.5 million per year. This figure needs to be assessed against the complexity, scope, and criticality of the software being developed and maintained. Without competitive bids or detailed breakdowns of labor, overhead, and profit, it's challenging to benchmark this price against market rates or alternative solutions effectively. The Cost Plus Fixed Fee structure also means the final cost could deviate from the initial estimate.

What are the primary risks associated with this Cost Plus Fixed Fee contract for JASSM software?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for enterprise management software like this are cost overruns and potential inefficiencies. In a CPFF structure, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This can create less incentive for the contractor to control costs aggressively, as they are guaranteed their costs will be covered. If the project scope expands or unforeseen technical challenges arise, the total cost to the government could significantly exceed initial projections. Effective oversight, rigorous cost tracking, and clear definition of scope are crucial to mitigate these risks. The government must actively manage the contract to ensure the fixed fee remains appropriate and that costs are reasonable and allocable.

How effective is enterprise management software in improving the readiness and lifecycle management of complex weapon systems like JASSM?

Enterprise management software plays a crucial role in enhancing the readiness and lifecycle management of complex weapon systems such as the JASSM. Such software can integrate various functions, including supply chain management, maintenance scheduling, inventory control, training records, and operational deployment status. By providing a centralized platform for data and processes, it enables better visibility into the system's overall health, facilitates proactive maintenance, optimizes spare parts logistics, and improves decision-making for deployment and sustainment. This can lead to increased operational availability, reduced downtime, and more efficient resource allocation throughout the weapon system's lifespan. The effectiveness, however, is highly dependent on the software's design, implementation, user adoption, and the quality of data it manages.

What are the historical spending patterns for JASSM-related software and support by the Department of the Air Force?

Detailed historical spending patterns specifically for JASSM-related software and support by the Department of the Air Force are not readily available in the public domain due to the classified or sensitive nature of defense procurement data. However, it is understood that the Department of Defense, including the Air Force, consistently invests significant resources in the sustainment and modernization of its weapon systems. This includes substantial spending on software development, integration, maintenance, and lifecycle management for platforms like the JASSM. Such spending is typically spread across various contract types and durations, often involving sole-source awards to prime contractors due to the specialized nature of the technology and existing system integration. The current $61.9 million award represents a portion of this ongoing investment in maintaining and enhancing the JASSM enterprise.

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: FA868221R0003

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 230 MALL BLVD, KING OF PRUSSIA, PA, 19406

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

Financial Breakdown

Contract Ceiling: $61,885,116

Exercised Options: $61,885,116

Current Obligation: $61,885,116

Actual Outlays: $165,342

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $3,440,561

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline