DoD awards $835M contract to Lockheed Martin for space systems research and development

Contract Overview

Contract Amount: $17,258,723 ($17.3M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2003-12-01

End Date: 2006-01-20

Contract Duration: 781 days

Daily Burn Rate: $22.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200411!000010!5700!CZ62 !SMC/PKJ LOS ANGELES AFB !FA880804C0004 !A!N! !N! ! !20031201!20050429!102110608!102110608!834951691!N!LOCKHEED MARTIN CORPORATION !3130 ZANKER ROAD !SAN JOSE !CA!95161!68000!085!06!SAN JOSE !SANTA CLARA !CALIFORNIA!+000003034300!N!N!000003034300!AD21!RDTE/SERVICES-BASIC RESEARCH !A2 !MISSILE AND SPACE SYSTEMS !788 !MILSTAR !927110!E! !3! ! ! ! ! !99990909!B! ! !A! !A!N!U!2!004!B! !Z!N!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!N! ! ! !Y! ! !0001! !

Place of Performance

Location: SAN JOSE, SANTA CLARA County, CALIFORNIA, 95134

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $17.3 million to LOCKHEED MARTIN CORPORATION for work described as: 200411!000010!5700!CZ62 !SMC/PKJ LOS ANGELES AFB !FA880804C0004 !A!N! !N! ! !20031201!20050429!102110608!102110608!834951691!N!LOCKHEED MARTIN CORPORATION !3130 ZANKER ROAD !SAN JOSE !CA!95161!68000!085!06!SAN JOSE !SANT… Key points: 1. Contract awarded for space systems research and development, indicating a focus on advanced defense capabilities. 2. The contract's cost-plus-fixed-fee structure may allow for cost overruns, requiring close monitoring. 3. A single award suggests potential limitations in competition or a specific need for the contractor's expertise. 4. The duration of the contract (over 2 years) implies a long-term project with significant resource allocation. 5. The contract falls under the 'Missile and Space Systems' category, highlighting its strategic importance. 6. The geographic location of the contractor in California may have implications for regional economic impact.

Value Assessment

Rating: fair

The contract value of $834,951,691 for a period of approximately two years appears substantial. Benchmarking this against similar R&D contracts for space systems is challenging without more specific details on the scope of work. However, the cost-plus-fixed-fee (CPFF) pricing structure, while common for R&D, carries inherent risks of cost escalation if not managed tightly. The total value awarded is $834,951,691, with an initial award amount of $68,000.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. However, the data only shows one awardee, Lockheed Martin Corporation. Further analysis would be needed to determine the number of proposals received and the specific reasons why Lockheed Martin was selected as the sole awardee. The level of competition is crucial for ensuring fair pricing and optimal value.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it promotes a competitive environment that can lead to lower prices and better quality services. However, the ultimate benefit depends on the actual number of bids received and the evaluation process.

Public Impact

The primary beneficiary is the Department of Defense, specifically its space and missile systems programs. The contract supports research and development in advanced space technologies and missile systems. The geographic impact is primarily centered around Lockheed Martin's facilities in San Jose, California. The contract likely supports a workforce of engineers, scientists, and technical personnel within Lockheed Martin.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can lead to cost overruns if not rigorously managed.
Limited information on the number of bidders in the 'full and open' competition raises questions about the extent of competition.
The substantial value of the contract warrants close oversight to ensure efficient use of taxpayer funds.

Positive Signals

Awarded under full and open competition, suggesting a broad search for qualified contractors.
The contractor, Lockheed Martin, is a major defense contractor with extensive experience in aerospace and defense.
The contract supports critical research and development in a strategic sector for national security.

Sector Analysis

This contract falls within the Aerospace and Defense sector, specifically focusing on space systems and missile technology. This is a highly specialized and capital-intensive industry. The market is dominated by a few large prime contractors, including Lockheed Martin. Spending in this area is driven by national security priorities and technological advancements. Comparable spending benchmarks would typically involve other large-scale R&D contracts for advanced defense platforms.

Small Business Impact

The provided data does not indicate any specific small business set-asides for this contract. As a large prime contract awarded to Lockheed Martin, it is unlikely to have direct set-aside provisions. However, there may be subcontracting opportunities for small businesses within Lockheed Martin's supply chain, which would need to be assessed separately.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contract management and oversight bodies, such as the Defense Contract Management Agency (DCMA). The contract's CPFF structure necessitates robust financial oversight to ensure costs are reasonable and allocable. Transparency would be facilitated through regular reporting requirements from the contractor and potential audits by the Inspector General.

Related Government Programs

Missile Defense Systems
Satellite Technology Development
Advanced Research Projects Agency (ARPA) Contracts
Space-Based Defense Programs
National Reconnaissance Office (NRO) Contracts

Risk Flags

Cost Overrun Risk (CPFF Structure)
Technological Obsolescence
Integration Complexity
Schedule Delays
Cybersecurity Vulnerabilities

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.3 million to LOCKHEED MARTIN CORPORATION. 200411!000010!5700!CZ62 !SMC/PKJ LOS ANGELES AFB !FA880804C0004 !A!N! !N! ! !20031201!20050429!102110608!102110608!834951691!N!LOCKHEED MARTIN CORPORATION !3130 ZANKER ROAD !SAN JOSE !CA!95161!68000!085!06!SAN JOSE !SANTA CLARA !CALIFORNIA!+000003034300!N!N!000003034300!AD21!RDTE/SERVICES-BASIC RESEARCH !A2 !MISSILE AND SPACE SYSTEMS !788 !MILSTAR !927110!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $17.3 million.

What is the period of performance?

Start: 2003-12-01. End: 2006-01-20.

What is the specific scope of work for this research and development contract?

The provided data indicates the contract is for 'RDTE/SERVICES-BASIC RESEARCH' within the 'MISSILE AND SPACE SYSTEMS' category, specifically related to 'MILSTAR'. While 'MILSTAR' refers to a military satellite communications program, the exact nature of the research and development (R&D) services is not detailed. This could encompass a wide range of activities, from fundamental scientific inquiry to applied engineering for next-generation space-based communication or defense systems. Without a detailed statement of work, it's difficult to ascertain the precise technological advancements or services being procured.

How does the awarded amount compare to historical spending on similar space systems R&D contracts?

The awarded amount of approximately $835 million is substantial for a single R&D contract. To compare it effectively, one would need to analyze historical spending patterns for similar 'Missile and Space Systems' R&D efforts within the Department of Defense, particularly those related to satellite communications or strategic defense programs. Factors such as inflation, technological complexity, and program duration would need to be normalized. Given Lockheed Martin's role as a major defense contractor, this award is likely within the expected range for large-scale, strategic R&D initiatives, but a detailed historical analysis would be required for a precise benchmark.

What are the key performance indicators (KPIs) and deliverables expected under this contract?

The provided data does not specify the key performance indicators (KPIs) or deliverables for this contract. For a research and development contract, especially one involving advanced systems like those related to MILSTAR, KPIs would typically focus on milestones such as research progress, prototype development, testing outcomes, and technical reports. Deliverables would likely include technical documentation, research findings, and potentially functional prototypes or system designs. The effectiveness of the contract hinges on clearly defined and measurable KPIs and deliverables that align with the DoD's strategic objectives.

What is Lockheed Martin's track record with similar cost-plus-fixed-fee (CPFF) contracts for the Department of Defense?

Lockheed Martin has a long and extensive history of performing on cost-plus-fixed-fee (CPFF) contracts with the Department of Defense across various domains, including aerospace, missile systems, and IT services. CPFF contracts are common for R&D where the final costs are uncertain. While this contract structure allows for flexibility, it also necessitates rigorous oversight to manage costs effectively. Lockheed Martin's experience suggests they possess the infrastructure and processes to manage such contracts, but past performance on CPFF contracts would need to be reviewed for specific indicators of cost control and project success.

What are the potential risks associated with the 'MILSTAR' program and this specific contract?

Potential risks associated with this contract and the broader MILSTAR program could include technological obsolescence, integration challenges with existing or future systems, cost overruns due to the CPFF structure, and schedule delays. Given the strategic nature of military satellite communications, security risks related to cyber threats or signal jamming are also paramount. Furthermore, the long development cycles inherent in space systems R&D mean that the operational environment or threat landscape could evolve significantly during the contract's performance period.

How does this contract align with the Department of Defense's current strategic priorities in space and defense?

This contract, focused on research and development for missile and space systems related to MILSTAR, aligns with the Department of Defense's ongoing strategic priorities concerning space-based capabilities and resilient communication networks. As the military increasingly relies on space assets for intelligence, surveillance, reconnaissance, and communication, investments in R&D for these systems are critical. Ensuring secure, survivable, and advanced space-based platforms is a key tenet of modern defense strategy, making this contract relevant to maintaining a technological edge.

Industry Classification

NAICS: Public Administration › Space Research and Technology › Space Research and Technology

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 3130 ZANKER ROAD, SAN JOSE, CA, 90

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline