Air Force's $48M JASSM operational planning contract awarded to Lockheed Martin without competition

Contract Overview

Contract Amount: $47,976,514 ($48.0M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2023-06-22

End Date: 2024-06-21

Contract Duration: 365 days

Daily Burn Rate: $131.4K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: JOINT AIR TO SURFACE STANDOFF MISSILE (JASSM)OPERATIONAL PLANNING (OP) 2023

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32819

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $48.0 million to LOCKHEED MARTIN CORPORATION for work described as: JOINT AIR TO SURFACE STANDOFF MISSILE (JASSM)OPERATIONAL PLANNING (OP) 2023 Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, indicating potential for cost overruns. 2. Sole-source award limits price discovery and potentially increases costs for taxpayers. 3. Lack of competition raises concerns about contractor performance and innovation. 4. Contract duration of one year suggests a focused scope for operational planning. 5. Awarded to a single, large defense contractor, potentially crowding out smaller, specialized firms. 6. Geographic focus on Florida may indicate specific operational or testing requirements.

Value Assessment

Rating: questionable

The contract's value of $47.98 million for operational planning services is difficult to benchmark without comparable sole-source awards for similar services. The cost-plus-fixed-fee (CPFF) pricing structure, while common in complex defense procurements, carries inherent risks of cost escalation if not rigorously managed. Without competitive bidding, it's challenging to ascertain if the fixed fee adequately incentivizes efficiency or if the overall cost represents a fair market value. Further analysis would require access to detailed cost breakdowns and historical data on similar planning efforts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of the Air Force did not conduct a competitive bidding process. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or when urgent needs preclude a lengthy competition. The absence of multiple bidders means there was no direct price comparison, potentially leading to a higher price than if competition had been allowed. This approach limits the government's ability to leverage market forces for cost savings.

Taxpayer Impact: Sole-source awards can result in taxpayers paying a premium for goods or services, as the government does not benefit from the price reductions typically driven by competitive bidding. This lack of competition may also reduce the incentive for the contractor to offer the most cost-effective solution.

Public Impact

The primary beneficiary is the Department of the Air Force, which receives critical operational planning support for the Joint Air-to-Surface Standoff Missile (JASSM). Services delivered include planning activities essential for the effective deployment and utilization of the JASSM weapon system. The geographic impact is concentrated in Florida, suggesting that operational planning activities or related support functions are based there. Workforce implications may involve specialized personnel within Lockheed Martin, including engineers, logisticians, and operational analysts, contributing to national defense capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially impacting cost-effectiveness.
Cost-plus-fixed-fee structure introduces risk of cost overruns if not closely monitored.
Lack of transparency in the procurement process due to non-competitive nature.
Potential for contractor lock-in, making future procurements more difficult to compete.
Limited visibility into the specific operational planning tasks and their necessity.

Positive Signals

Award to a prime contractor with a proven track record in missile systems.
Contract supports a critical defense capability (JASSM), ensuring operational readiness.
Fixed fee component provides some level of cost certainty for the government.
One-year duration allows for focused planning and potential reassessment of future needs.
Contracting agency is a major branch of the U.S. military, implying stringent internal oversight.

Sector Analysis

The defense sector, particularly the guided missile and space vehicle manufacturing industry, is characterized by high R&D costs, long development cycles, and significant government procurement. Contracts like this, supporting operational planning for advanced weapon systems, are crucial for maintaining technological superiority and readiness. The market is dominated by a few large prime contractors, including Lockheed Martin, who possess the specialized expertise and security clearances required. Spending benchmarks for similar operational planning or sustainment contracts can vary widely based on system complexity and scope.

Small Business Impact

This contract was awarded to Lockheed Martin Corporation, a large prime defense contractor, and does not appear to have a small business set-aside component. Given the sole-source nature and the specialized requirements for JASSM operational planning, it is unlikely that significant subcontracting opportunities for small businesses would be mandated or readily available within this specific award. The focus is on leveraging the prime contractor's established capabilities rather than fostering small business participation through set-asides.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. As a sole-source award, scrutiny may be heightened to ensure fair pricing and appropriate justification for the non-competitive nature. Accountability measures would be tied to the terms of the Cost Plus Fixed Fee contract, requiring detailed reporting and adherence to the scope of work. Transparency is limited due to the lack of a competitive process, but contract details are generally available through federal procurement databases.

Related Government Programs

Joint Air-to-Surface Standoff Missile (JASSM) Program
Air Force Weapon System Sustainment Contracts
Defense Operational Planning Support
Guided Missile Manufacturing
Aerospace Contractor Services

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Lack of competitive bidding
Potential for cost overruns
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $48.0 million to LOCKHEED MARTIN CORPORATION. JOINT AIR TO SURFACE STANDOFF MISSILE (JASSM)OPERATIONAL PLANNING (OP) 2023

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 $48.0 million.

What is the period of performance?

Start: 2023-06-22. End: 2024-06-21.

What is Lockheed Martin Corporation's track record with the JASSM program and similar operational planning contracts?

Lockheed Martin Corporation has a long-standing and primary role in the development, production, and sustainment of the Joint Air-to-Surface Standoff Missile (JASSM) family of weapons. As the prime contractor, they have been responsible for delivering these advanced cruise missiles to the U.S. Air Force and allied nations. Their track record includes successful production runs, integration with various aircraft platforms, and ongoing support services. For operational planning specifically, Lockheed Martin likely possesses extensive institutional knowledge and technical expertise derived from their deep involvement with the JASSM system throughout its lifecycle. This includes understanding the missile's capabilities, operational constraints, deployment strategies, and integration with aircrew training and mission planning systems. Their history with the program suggests a strong capability to fulfill the requirements of this contract, though the lack of competition prevents an independent assessment of their performance relative to potential alternatives.

How does the $47.98 million contract value compare to similar operational planning contracts for advanced missile systems?

Benchmarking the $47.98 million contract value for JASSM operational planning is challenging due to the sole-source nature of this award and the specific, often proprietary, details of operational planning services. Comparable contracts are difficult to identify publicly, especially those that are also sole-sourced and involve highly specialized weapon systems like the JASSM. However, general trends in defense contracting suggest that operational planning, sustainment, and support services for complex weapon systems can range from tens to hundreds of millions of dollars annually, depending on the scope, duration, and system maturity. The Cost Plus Fixed Fee (CPFF) structure means the final cost could fluctuate. Without access to detailed cost breakdowns or data on similar sole-source planning contracts for comparable missile systems (e.g., Tomahawk, Sidewinder, AMRAAM), a precise value comparison is not feasible. The value appears substantial, reflecting the critical nature of ensuring effective operational use of advanced munitions.

What are the primary risks associated with this sole-source, cost-plus-fixed-fee contract?

The primary risks associated with this sole-source, Cost Plus Fixed Fee (CPFF) contract are twofold. Firstly, the sole-source nature eliminates competitive pressure, which can lead to inflated pricing and reduced incentives for the contractor (Lockheed Martin) to achieve maximum cost efficiency. The government foregoes the opportunity to secure potentially lower prices through bidding. Secondly, the CPFF structure, while providing flexibility for evolving requirements, carries the inherent risk of cost overruns. The 'cost-plus' element means the government reimburses the contractor's allowable costs, and the 'fixed fee' is a predetermined profit amount. If costs escalate beyond initial projections, the total contract expenditure can increase significantly, impacting the overall budget. Effective oversight and rigorous cost control by the Air Force are crucial to mitigate these risks and ensure value for taxpayer money.

How effective is the Department of the Air Force likely to be in overseeing this contract given its sole-source nature?

The effectiveness of the Department of the Air Force's oversight for this sole-source contract hinges on several factors. The Air Force possesses established program management and contracting oversight structures designed for complex defense procurements. However, the sole-source award inherently reduces one key oversight mechanism: competitive benchmarking. To compensate, the Air Force must rely heavily on robust internal controls, detailed cost analysis, performance metrics, and potentially independent cost estimates to validate the reasonableness of Lockheed Martin's proposed costs and the fixed fee. The CPFF structure necessitates diligent monitoring of allowable costs and adherence to the contract's scope. The presence of an Inspector General's office within the Department of Defense also provides an external audit and investigative function. Ultimately, effectiveness depends on the resources, expertise, and diligence applied by the Air Force contracting officers and program managers responsible for this specific contract.

What are the historical spending patterns for JASSM operational planning and related support services by the Department of the Air Force?

Historical spending patterns for JASSM operational planning and related support services by the Department of the Air Force are intrinsically linked to the overall lifecycle of the weapon system. As a major advanced munitions program, the JASSM has likely seen consistent funding allocated for sustainment, upgrades, and operational support since its introduction. This includes budgets for contractor logistics support, technical data packages, training system development, and, as in this case, specific operational planning activities. While precise figures for 'operational planning' as a distinct line item may not be consistently reported across all fiscal years or publicly itemized, the overall sustainment and support costs for such a program typically represent a significant portion of the weapon system's total ownership cost. Spending would likely have been higher during initial fielding and major upgrade phases and may stabilize or fluctuate based on operational tempo and modernization efforts. Analyzing historical budgets for the JASSM program office and related contract vehicles would provide a clearer picture of spending trends.

What is the significance of the contract being awarded in Florida (ST: FL, SN: FLORIDA)?

The contract's designation for Florida (ST: FL, SN: FLORIDA) likely signifies the location where the operational planning services will be performed or where the primary contractor's relevant facility is situated. Florida hosts significant U.S. Air Force installations and defense industry presence, including facilities associated with Lockheed Martin. This could indicate that the operational planning activities are closely tied to specific testing ranges, training grounds, or operational units based in Florida. It might also reflect the location of key personnel or specialized resources required for the JASSM program's planning functions. For instance, Eglin Air Force Base in Florida is a major hub for munitions testing and development, which could be relevant to operational planning. The geographic focus helps define the logistical and administrative context of the contract.

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: $50,848,666

Exercised Options: $50,848,666

Current Obligation: $47,976,514

Subaward Activity

Number of Subawards: 18

Total Subaward Amount: $6,033,527

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