Lockheed Martin awarded $24.1M for Joint Air-to-Surface Standoff Missile C++ Phase 8 by the Air Force

Contract Overview

Contract Amount: $24,155,256 ($24.2M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2024-03-07

End Date: 2026-06-02

Contract Duration: 817 days

Daily Burn Rate: $29.6K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: JOINT AIR TO SURFACE STANDOFF MISSILE C++ PHASE 8

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32819

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $24.2 million to LOCKHEED MARTIN CORPORATION for work described as: JOINT AIR TO SURFACE STANDOFF MISSILE C++ PHASE 8 Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, indicating potential for cost overruns. 2. Sole-source award limits competitive pressure, potentially impacting price efficiency. 3. Long contract duration of 817 days suggests a complex, multi-phase project. 4. Focus on missile parts and auxiliary equipment places this within a critical defense manufacturing sub-sector. 5. The contract is a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or existing program. 6. No small business set-aside was applied, suggesting the prime contractor is expected to handle the entire scope.

Value Assessment

Rating: questionable

Benchmarking the value of this specific contract is challenging without knowing the scope of work for Phase 8 and comparing it to previous phases or similar missile development efforts. The cost-plus-fixed-fee (CPFF) contract type can lead to higher costs than fixed-price contracts if not managed carefully. The lack of competition further complicates a value assessment, as there's no market-driven price discovery.

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 typically occurs when a specific capability is required that only one contractor possesses, or for follow-on work to an existing system where the original contractor has unique knowledge. The absence of competition means taxpayers do not benefit from the price reductions that can arise from a competitive bidding process.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible price, potentially leading to higher costs for taxpayers compared to a competed contract.

Public Impact

The primary beneficiaries are the U.S. Air Force and potentially other branches of the military that utilize the Joint Air-to-Surface Standoff Missile (JASSM). The contract supports the continued development, testing, and potential production of advanced missile systems, enhancing national defense capabilities. The geographic impact is primarily in Florida, where the contract is being performed. Workforce implications include employment for engineers, technicians, and support staff at Lockheed Martin facilities in Florida.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
Cost-plus-fixed-fee contract type carries inherent cost escalation risks.
Lack of transparency on specific deliverables for Phase 8 makes independent value assessment difficult.

Positive Signals

Award to a known defense contractor with established expertise in missile systems.
Contract supports a critical defense capability (JASSM).
Delivery order structure suggests integration into existing acquisition frameworks.

Sector Analysis

The defense sector, specifically guided missile and space vehicle manufacturing, is characterized by high R&D costs, long development cycles, and significant government procurement. Lockheed Martin is a major player in this space. Spending in this category is driven by national security priorities and technological advancements. Comparable spending benchmarks would involve looking at other major missile development programs or sustainment contracts within the DoD.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The prime contractor, Lockheed Martin, is a large aerospace and defense company. This award does not appear to directly benefit the small business ecosystem, though it may indirectly through the supply chain if Lockheed Martin utilizes small business suppliers.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. The Defense Contract Management Agency (DCMA) likely provides on-site oversight of contract performance and cost. Transparency is limited due to the sole-source nature and the proprietary aspects of defense technology. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Joint Air-to-Surface Standoff Missile (JASSM) Program
Air-to-Ground Munitions
Guided Missile Manufacturing
Defense Acquisition Programs

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.2 million to LOCKHEED MARTIN CORPORATION. JOINT AIR TO SURFACE STANDOFF MISSILE C++ PHASE 8

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 $24.2 million.

What is the period of performance?

Start: 2024-03-07. End: 2026-06-02.

What is the specific scope of work for Phase 8 of the Joint Air-to-Surface Standoff Missile C++ program?

The provided data does not detail the specific scope of work for Phase 8. However, based on the contract title and the nature of missile development programs, Phase 8 likely involves continued research, development, testing, evaluation, or sustainment activities for the JASSM missile system. This could include software upgrades (indicated by 'C++'), hardware improvements, integration with new platforms, or addressing obsolescence issues. Without further documentation, the precise deliverables remain unspecified, making a detailed assessment of progress and value challenging.

How does the cost-plus-fixed-fee (CPFF) contract type compare to other contract types in terms of risk and potential cost?

The Cost-Plus-Fixed-Fee (CPFF) contract type is often used for research and development or services where the scope is not well-defined, or costs are difficult to estimate. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This structure shifts a significant portion of the cost risk to the government, as the contractor is incentivized to incur costs to complete the work, and the government pays those costs plus the predetermined fee. Compared to fixed-price contracts, CPFF contracts generally offer less price certainty for the government and can lead to higher final costs if cost controls are not robust. However, they can be advantageous when innovation and flexibility are paramount and precise cost estimation is impossible upfront.

What are the implications of a sole-source award for this type of defense contract?

A sole-source award, like the one for the JASSM C++ Phase 8, means that only one contractor, Lockheed Martin Corporation in this case, was solicited. This typically occurs when a unique capability is required, or for follow-on work where the original contractor possesses proprietary knowledge or technology. The primary implication for the government and taxpayers is the absence of price competition. Without competing bids, the government may not achieve the lowest possible price, and the contractor faces less pressure to optimize costs. While sole-source awards can be necessary for specialized defense systems, they warrant careful justification and oversight to ensure fair pricing and prevent potential overspending.

What is the historical spending trend for the Joint Air-to-Surface Standoff Missile (JASSM) program?

The provided data focuses on a single delivery order for Phase 8. To understand historical spending trends for the JASSM program, one would need to analyze cumulative contract awards to Lockheed Martin and potentially other entities for all JASSM-related activities over several fiscal years. This would involve examining contract databases for research, development, procurement, and sustainment contracts associated with the JASSM family of missiles. Such an analysis would reveal the program's lifecycle costs, funding fluctuations, and overall investment by the Department of Defense in this capability.

What are the potential risks associated with the long contract duration (817 days)?

A contract duration of 817 days (approximately 2.2 years) for a missile development phase like JASSM C++ Phase 8 introduces several potential risks. Firstly, the longer the contract, the greater the opportunity for cost escalation due to inflation, changes in material costs, or unforeseen technical challenges. Secondly, requirements can evolve significantly over such a period, potentially leading to scope creep or the need for costly contract modifications. Thirdly, maintaining contractor focus and performance over an extended period requires diligent oversight. Finally, technological advancements in the field could outpace the development timeline, potentially rendering aspects of the missile system obsolete by the time the contract is completed.

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: $24,780,256

Exercised Options: $24,780,256

Current Obligation: $24,155,256

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $109,201

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