DoD's $205M Joint Air-to-Surface Standoff Missile contract awarded to Lockheed Martin for operational flight program

Contract Overview

Contract Amount: $20,545,595 ($20.5M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2022-12-15

End Date: 2025-12-16

Contract Duration: 1,097 days

Daily Burn Rate: $18.7K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: JOINT AIR TO SURFACE STANDOFF MISSILE - MISSILE OPERATIONAL FLIGHT PROGRAM

Place of Performance

Location: EGLIN AFB, OKALOOSA County, FLORIDA, 32542

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $20.5 million to LOCKHEED MARTIN CORPORATION for work described as: JOINT AIR TO SURFACE STANDOFF MISSILE - MISSILE OPERATIONAL FLIGHT PROGRAM Key points: 1. Contract awarded for missile operational flight program, indicating ongoing support and sustainment. 2. Sole-source award to Lockheed Martin suggests a lack of readily available alternatives or specialized expertise. 3. The contract duration of approximately three years points to a medium-term commitment for missile sustainment. 4. Awarded by the Department of the Air Force, highlighting its role in air combat capabilities. 5. The contract type (Cost Plus Fixed Fee) may allow for cost overruns, requiring close monitoring. 6. The absence of small business involvement suggests this is a large-scale, prime contractor-led effort.

Value Assessment

Rating: fair

Benchmarking the value of this specific operational flight program contract is challenging without detailed cost breakdowns and comparisons to similar sustainment contracts for advanced missile systems. The Cost Plus Fixed Fee (CPFF) contract type can sometimes lead to higher costs than fixed-price agreements if not managed tightly, as contractor profit is guaranteed regardless of cost efficiency. However, CPFF is often used for complex R&D or specialized services where costs are difficult to predict upfront. Further analysis would require understanding the specific services rendered and comparing them to industry standards for missile sustainment and upgrade programs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Lockheed Martin Corporation, was solicited. This typically occurs when a specific technology, proprietary system, or unique expertise is required, and only one contractor can provide it. The lack of competition means that the government did not benefit from a competitive bidding process, which could potentially lead to higher prices than if multiple vendors had vied for the contract. The justification for a sole-source award would need to be thoroughly documented by the agency.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without competing bids, there is less assurance that the price reflects the best possible value for the government.

Public Impact

The primary beneficiaries are the U.S. Air Force and potentially other branches utilizing the Joint Air-to-Surface Standoff Missile (JASSM) system. The contract ensures the continued operational readiness and sustainment of a critical air-to-ground weapon system. Services likely include maintenance, repair, logistics support, and potentially software updates or minor modifications for the JASSM. The geographic impact is primarily within the operational theaters where the Air Force deploys its strike aircraft equipped with JASSM. Workforce implications are likely concentrated at Lockheed Martin facilities involved in missile sustainment and support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential innovation from other vendors.
Cost Plus Fixed Fee contract type can incentivize higher spending if not rigorously overseen.
Lack of transparency in the sole-source justification could mask potential inefficiencies.
Dependence on a single contractor for critical missile sustainment poses a long-term strategic risk.

Positive Signals

Ensures continued operational capability of a key strategic weapon system.
Leverages Lockheed Martin's established expertise with the JASSM platform.
Provides necessary sustainment to maintain readiness for Air Force missions.

Sector Analysis

The defense sector, specifically the guided missile and space vehicle manufacturing industry, is characterized by high technological complexity, significant R&D investment, and long product lifecycles. Contracts like this are crucial for maintaining the readiness and effectiveness of advanced weapon systems. The market is often dominated by a few large prime contractors due to the specialized nature of the products and the extensive qualification processes. Spending benchmarks for similar missile sustainment programs can vary widely based on the specific missile system, its age, and the scope of support required.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Given the nature of advanced missile systems and the prime contractor relationship with Lockheed Martin, it is likely that any small business participation would be through subcontracting opportunities awarded by the prime. The extent of small business subcontracting is not detailed here and would require further investigation into Lockheed Martin's subcontracting plan.

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 contract terms, including performance metrics and reporting requirements. Transparency is often limited in sole-source procurements, but the agency is expected to maintain records justifying the award. Inspector General (IG) jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Joint Air-to-Surface Standoff Missile (JASSM) Production
Air Force Weapon System Sustainment Programs
Guided Missile Manufacturing Contracts
Lockheed Martin Defense Contracts

Risk Flags

Sole-source award may indicate limited competition.
Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
Long-term reliance on a single contractor can pose strategic risks.
Lack of small business set-aside may limit broader economic participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.5 million to LOCKHEED MARTIN CORPORATION. JOINT AIR TO SURFACE STANDOFF MISSILE - MISSILE OPERATIONAL FLIGHT PROGRAM

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 $20.5 million.

What is the period of performance?

Start: 2022-12-15. End: 2025-12-16.

What is the specific justification provided by the Department of the Air Force for awarding this contract on a sole-source basis to Lockheed Martin Corporation?

The specific justification for a sole-source award typically stems from the unique capabilities, proprietary technology, or essential nature of the product or service that only one contractor can provide. For the Joint Air-to-Surface Standoff Missile (JASSM) operational flight program, the justification likely centers on Lockheed Martin's role as the original manufacturer and sole developer of the JASSM system. This includes possessing the necessary technical data, specialized tooling, and engineering expertise required for its sustainment, maintenance, and potential upgrades. Without this proprietary knowledge and established infrastructure, other companies would face significant barriers to entry, making a competitive procurement impractical or excessively costly. The Air Force would have had to formally document this justification, often through a Justification and Approval (J&A) document, detailing why full and open competition was not feasible or not in the government's best interest.

How does the Cost Plus Fixed Fee (CPFF) contract structure compare to other contract types in terms of potential cost efficiency for missile sustainment?

The Cost Plus Fixed Fee (CPFF) contract structure is designed to cover the contractor's actual costs plus a predetermined fixed fee, which represents the contractor's profit. This structure is often employed when the scope of work is uncertain or involves significant research and development, making it difficult to estimate costs accurately upfront. Compared to fixed-price contracts (like Firm-Fixed Price - FFP), CPFF offers less incentive for the contractor to control costs, as their profit is fixed regardless of the final cost. In contrast, FFP contracts provide a strong incentive for cost efficiency, as the contractor bears the risk of cost overruns. For missile sustainment, if the work is well-defined and predictable, an FFP contract might yield better value. However, if the sustainment involves unforeseen technical challenges or requires extensive engineering analysis, CPFF might be necessary to ensure the work is completed while allowing the contractor adequate compensation for the risks and uncertainties involved. Close government oversight is crucial with CPFF to manage costs effectively.

What are the potential risks associated with relying on a single contractor, Lockheed Martin, for the sustainment of the JASSM missile system over the long term?

Relying on a single contractor like Lockheed Martin for the long-term sustainment of the Joint Air-to-Surface Standoff Missile (JASSM) system presents several potential risks. Firstly, it creates a dependency that can lead to reduced bargaining power for the government, potentially resulting in higher prices over time as competition is absent. Secondly, it can stifle innovation; without competitive pressure, the contractor may have less incentive to invest in developing more efficient sustainment methods or cost-saving technologies. Thirdly, there's a strategic risk: if the contractor faces financial difficulties, operational disruptions, or decides to exit a particular market segment, it could severely impact the government's ability to maintain the JASSM system's readiness. Lastly, the lack of alternative providers means that if the current contractor's performance degrades, the government faces significant challenges and costs in transitioning to a new provider, assuming one even exists with the necessary expertise.

What specific services are typically included under an 'operational flight program' for a complex missile system like the JASSM?

An 'operational flight program' (OFP) for a complex missile system like the Joint Air-to-Surface Standoff Missile (JASSM) generally encompasses a range of services essential for maintaining the weapon's readiness, effectiveness, and safety throughout its lifecycle. This typically includes sustainment engineering, which involves addressing obsolescence issues, performing root cause analysis for failures, and implementing engineering changes. It also covers logistics support, such as supply chain management, repair and overhaul services, and spare parts provisioning. Software maintenance and updates are often a critical component, ensuring the missile's guidance, navigation, and targeting systems remain current and effective against evolving threats. Additionally, OFPs may include technical support, troubleshooting, performance monitoring, and potentially minor modifications or upgrades to enhance capabilities or address safety concerns. The goal is to ensure the JASSM remains a viable and reliable asset for the warfighter.

Can we assess the historical spending trends for the JASSM program or similar missile sustainment contracts to provide context for this $205 million award?

Assessing historical spending trends for the JASSM program or similar missile sustainment contracts is crucial for contextualizing the current $205 million award. While the provided data focuses on a single delivery order, a comprehensive analysis would involve examining cumulative spending on JASSM sustainment over previous years, including any prior contracts for production, upgrades, or support. Comparing this award amount to the total lifecycle cost of the JASSM program, or to annual sustainment budgets for comparable air-launched missiles (e.g., Sidewinder, AMRAAM), would provide valuable benchmarks. Trends in spending could reveal patterns of increasing costs due to inflation, obsolescence, or increased operational tempo, or decreasing costs due to efficiency improvements or program maturity. Without access to historical contract databases and detailed spending reports specifically for JASSM sustainment, a precise trend analysis is not possible with the given information, but such data would be essential for a thorough value assessment.

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

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: $20,654,595

Exercised Options: $20,654,595

Current Obligation: $20,545,595

Actual Outlays: $2,943,374

Subaward Activity

Number of Subawards: 10

Total Subaward Amount: $1,172,169

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA868222DB001

IDV Type: IDC

Timeline