DoD Awards $137M for AGM-158 Obsolescence Program to Lockheed Martin
Contract Overview
Contract Amount: $13,716,429 ($13.7M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2024-05-01
End Date: 2027-04-30
Contract Duration: 1,094 days
Daily Burn Rate: $12.5K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: OBSOLESCENCE/ DIMINISHING MANUFACTURING SOURCES AND MATERIAL SHORTAGES (DMSMS) PROGRAM ON THE AGM-158 WEAPON SYSTEM THROUGHOUT ITS PROGRAM LIFE CYCLE.
Place of Performance
Location: ORLANDO, ORANGE County, FLORIDA, 32819
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $13.7 million to LOCKHEED MARTIN CORPORATION for work described as: OBSOLESCENCE/ DIMINISHING MANUFACTURING SOURCES AND MATERIAL SHORTAGES (DMSMS) PROGRAM ON THE AGM-158 WEAPON SYSTEM THROUGHOUT ITS PROGRAM LIFE CYCLE. Key points: 1. Focuses on long-term sustainment of a critical weapon system. 2. Sole-source award to Lockheed Martin, the prime contractor. 3. Potential risks include cost overruns due to program complexity and sole-source nature. 4. Sector is Defense, specifically missile and vehicle parts manufacturing.
Value Assessment
Rating: fair
The contract type is Cost Plus Fixed Fee, which can lead to higher costs if not managed tightly. Benchmarking is difficult without specific cost breakdowns for DMSMS programs.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, likely due to the specialized nature of sustaining an existing weapon system and the original manufacturer's proprietary knowledge. This limits price discovery and potentially increases costs.
Taxpayer Impact: Taxpayer funds are committed to ensuring the operational readiness of a key defense asset, but the lack of competition raises concerns about cost-effectiveness.
Public Impact
Ensures the continued operational capability of the AGM-158 JASSM missile. Addresses potential supply chain vulnerabilities and obsolescence issues. Supports national defense readiness and strategic deterrence.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Long program duration
Positive Signals
- Addresses critical obsolescence
- Sustains key weapon system
Sector Analysis
This contract falls within the Defense sector, specifically related to the manufacturing of missile parts. Spending in this area is driven by national security needs and the lifecycle management of complex weapon systems.
Small Business Impact
The data indicates no specific set-aside for small businesses. As a sole-source award to a large prime contractor, opportunities for small businesses may be limited to subcontracting roles.
Oversight & Accountability
Oversight will be crucial to manage the Cost Plus Fixed Fee structure and ensure the contractor is effectively addressing obsolescence and diminishing manufacturing sources without excessive cost growth.
Related Government Programs
- Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award limits competition.
- Cost-plus contract type increases cost risk.
- Long-term sustainment complexity.
- Potential for schedule delays due to supply chain issues.
- Dependency on a single contractor.
Tags
other-guided-missile-and-space-vehicle-p, department-of-defense, fl, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $13.7 million to LOCKHEED MARTIN CORPORATION. OBSOLESCENCE/ DIMINISHING MANUFACTURING SOURCES AND MATERIAL SHORTAGES (DMSMS) PROGRAM ON THE AGM-158 WEAPON SYSTEM THROUGHOUT ITS PROGRAM LIFE CYCLE.
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 $13.7 million.
What is the period of performance?
Start: 2024-05-01. End: 2027-04-30.
What is the projected cost impact of obsolescence mitigation over the weapon system's remaining life cycle?
The total award is $137 million over approximately three years. However, the long-term cost impact of obsolescence mitigation for the entire weapon system life cycle is not detailed here. Further analysis would require understanding the scope of DMSMS issues and the projected sustainment costs beyond this specific contract period.
How will the Air Force ensure cost control under a Cost Plus Fixed Fee contract for a sole-source award?
The Air Force must implement robust oversight mechanisms, including detailed cost tracking, performance metrics, and regular audits. Negotiating realistic fixed fees based on thorough cost analysis and establishing clear milestones and deliverables are essential to incentivize efficiency and prevent uncontrolled cost escalation.
What are the risks associated with relying solely on Lockheed Martin for DMSMS solutions for the AGM-158?
The primary risk is the lack of competitive pressure, potentially leading to higher prices and less innovation. There's also a dependency risk; if Lockheed Martin faces internal challenges or changes its strategic focus, it could impact the availability of critical parts and sustainment services for the weapon system.
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: $25,432,447
Exercised Options: $13,716,429
Current Obligation: $13,716,429
Subaward Activity
Number of Subawards: 16
Total Subaward Amount: $1,273,879
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
Start Date: 2024-05-01
Current End Date: 2027-04-30
Potential End Date: 2027-04-30 00:00:00
Last Modified: 2025-12-09
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