Air Force awards $118M JASSM software contract to Lockheed Martin for multi-year production and maintenance

Contract Overview

Contract Amount: $11,577,788 ($11.6M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2025-12-15

End Date: 2030-12-14

Contract Duration: 1,825 days

Daily Burn Rate: $6.3K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THIS EFFORT IS FOR JASSM MULTIPLE YEAR MOFP SOFTWARE PRODUCTION AND MAINTENANCE. THIS EFFORT INCLUDES, BUT IS NOT LIMITED TO, RELEASES FOR MOFP SOFTWARE IN THE AMOUNT OF $118,015,818.

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32819

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $11.6 million to LOCKHEED MARTIN CORPORATION for work described as: THIS EFFORT IS FOR JASSM MULTIPLE YEAR MOFP SOFTWARE PRODUCTION AND MAINTENANCE. THIS EFFORT INCLUDES, BUT IS NOT LIMITED TO, RELEASES FOR MOFP SOFTWARE IN THE AMOUNT OF $118,015,818. Key points: 1. Contract focuses on software production and maintenance for the JASSM missile system. 2. Long-term nature of the contract (5 years) suggests a sustained need for these services. 3. Sole-source award raises questions about potential cost efficiencies and market competition. 4. The contract's value is significant within the guided missile manufacturing sector. 5. Performance period extends through December 2030, indicating a long-term commitment. 6. The specific software releases included in the $118M are critical for missile functionality.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without detailed cost breakdowns and comparisons to similar software maintenance contracts for advanced weapon systems. The Cost Plus Fixed Fee (CPFF) contract type allows for cost reimbursement plus a fixed fee, which can sometimes lead to higher overall costs if not managed tightly. Given the specialized nature of JASSM software, direct comparisons to commercial software maintenance might not be appropriate, but internal government benchmarks or historical data on similar defense software contracts would be useful for a more precise value assessment.

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, proprietary technology, or is the only source capable of meeting the requirement. While this can ensure specialized expertise, it limits opportunities for competitive bidding, potentially impacting price discovery and cost savings for the government.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as there is no competitive pressure to drive down prices. The government must rely on robust negotiation and oversight to ensure fair pricing.

Public Impact

The primary beneficiaries are the U.S. Air Force, ensuring the continued operational readiness and modernization of the JASSM missile system. Services delivered include software production, maintenance, and releases critical for the JASSM's functionality and effectiveness. The geographic impact is primarily within Florida, where the contract is being performed. Workforce implications include specialized software engineering and maintenance roles within Lockheed Martin, potentially supporting high-skilled jobs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings.
CPFF contract type can incentivize cost overruns if not closely monitored.
Lack of competition may reduce pressure on contractor efficiency.
Long-term nature of the contract requires sustained government oversight to ensure continued value.

Positive Signals

Award to incumbent contractor ensures continuity of critical software support.
Focus on production and maintenance suggests a mature and essential system.
Long-term contract provides stability for essential defense capabilities.
Specific focus on software releases indicates ongoing system upgrades and modernization.

Sector Analysis

The guided missile and space vehicle manufacturing sector is a highly specialized and critical component of the defense industrial base. This contract falls within the domain of defense software development and sustainment, a market characterized by high barriers to entry due to intellectual property, security requirements, and technical complexity. Spending in this sector is often driven by national security priorities and technological advancements. Comparable spending benchmarks would involve analyzing other long-term sustainment contracts for major weapon systems within the Department of Defense.

Small Business Impact

This contract does not appear to include specific small business set-aside provisions, nor is there an indication of significant subcontracting opportunities for small businesses based on the provided data. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless Lockheed Martin actively pursues small business partners for specific components or services not covered by their internal capabilities. Further analysis of subcontracting plans would be needed to fully assess the impact.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Air Force contracting and program management offices. Accountability measures would be embedded within the Cost Plus Fixed Fee contract terms, requiring detailed reporting on costs and progress. Transparency may be limited due to the sole-source nature and the classified aspects of weapon system software. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse.

Related Government Programs

JASSM Program
Air Force Weapon Systems Sustainment
Defense Software Development
Guided Missile Manufacturing
Lockheed Martin Defense Contracts

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Potential for cost overruns
Limited competition impacts price discovery

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.6 million to LOCKHEED MARTIN CORPORATION. THIS EFFORT IS FOR JASSM MULTIPLE YEAR MOFP SOFTWARE PRODUCTION AND MAINTENANCE. THIS EFFORT INCLUDES, BUT IS NOT LIMITED TO, RELEASES FOR MOFP SOFTWARE IN THE AMOUNT OF $118,015,818.

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 $11.6 million.

What is the period of performance?

Start: 2025-12-15. End: 2030-12-14.

What is the historical spending trend for JASSM software production and maintenance with Lockheed Martin?

Analyzing historical spending for JASSM software requires access to detailed contract databases beyond the scope of this single award. However, the current award of $118,015,818 over five years suggests a significant and ongoing investment in this capability. Typically, sustainment contracts for complex weapon systems represent a substantial portion of their total lifecycle cost. Without prior contract data, it's difficult to establish a trend, but the multi-year nature of this award indicates a consistent need and budget allocation for JASSM software maintenance and upgrades. Future analysis could involve examining previous JASSM contracts, including any sole-source or competitive awards, to identify patterns in spending, cost growth, and the evolution of software requirements over time.

How does the pricing structure (Cost Plus Fixed Fee) compare to other similar defense software contracts?

The Cost Plus Fixed Fee (CPFF) pricing structure is common in defense contracts, particularly for research, development, and complex system sustainment where the scope of work may evolve or is not fully defined at the outset. In a CPFF contract, the government reimburses the contractor for allowable costs incurred, plus a predetermined fixed fee representing profit. Compared to fixed-price contracts, CPFF offers more flexibility but can potentially lead to higher costs if cost controls are not rigorous. For similar defense software sustainment contracts, CPFF is often preferred over firm-fixed-price when technical uncertainties are high or when the government requires significant contractor involvement in evolving requirements. However, it necessitates robust government oversight to manage costs effectively and ensure the fixed fee remains a fair profit for the work performed.

What are the specific risks associated with a sole-source award for critical defense software?

A sole-source award for critical defense software, such as that for the JASSM missile, presents several risks. Primarily, the lack of competition can lead to higher prices than might be achieved through a competitive bidding process, as the government lacks leverage to negotiate the best possible deal. There's also a risk of complacency from the contractor, potentially leading to reduced innovation or efficiency over time, as there is no direct competitive threat. Furthermore, reliance on a single source can create vulnerabilities if that contractor faces financial instability, operational disruptions, or if their proprietary knowledge becomes a bottleneck for future upgrades or integration with other systems. Ensuring robust contract management, performance metrics, and clear deliverables is crucial to mitigate these risks.

What is the expected impact of these software releases on the JASSM's operational effectiveness?

The contract explicitly mentions 'releases for MOFP software,' indicating that these software updates are intended to enhance or maintain the functionality of the JASSM's 'Missile Operational Flight Program' (MOFP). While the specific details of these releases are likely classified or proprietary, they are crucial for ensuring the missile's continued effectiveness, accuracy, and ability to counter evolving threats. Software updates in modern weapon systems often address areas such as improved targeting algorithms, enhanced electronic warfare countermeasures, updated navigation systems, expanded target databases, or improved communication and data links. Therefore, these releases are expected to sustain or potentially improve the JASSM's mission success rate and its relevance in contemporary and future operational environments.

How does this contract align with the Air Force's broader modernization goals for its air-launched weapons?

This contract aligns with the Air Force's broader modernization goals by ensuring the continued viability and effectiveness of a key component of its air-launched weapon inventory. The JASSM (Joint Air-to-Surface Standoff Missile) is a significant platform, and maintaining its software is critical for its operational readiness and ability to perform its standoff attack missions. Modernization in this context involves not just developing new platforms but also sustaining and upgrading existing ones through software enhancements. By investing in the production and maintenance of JASSM software, the Air Force is ensuring that this weapon system remains a relevant and potent capability, capable of meeting evolving threats and operational requirements, thereby supporting the overall modernization strategy for its airpower.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle 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, 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: $118,015,820

Exercised Options: $11,577,788

Current Obligation: $11,577,788

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA868225DB001

IDV Type: IDC

Timeline