DoD awards $48.2M for production kits, with Lockheed Martin to deliver over 1800 days

Contract Overview

Contract Amount: $48,246,922 ($48.2M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2020-01-16

End Date: 2025-01-15

Contract Duration: 1,826 days

Daily Burn Rate: $26.4K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: BLK 3 PRODUCTION KITS TO AWARD

Place of Performance

Location: LEXINGTON, FAYETTE County, KENTUCKY, 40516

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $48.2 million to LOCKHEED MARTIN CORPORATION for work described as: BLK 3 PRODUCTION KITS TO AWARD Key points: 1. Contract awarded to a single, established prime contractor. 2. Delivery order represents a portion of a larger contract vehicle. 3. Cost-plus-fixed-fee pricing structure may incentivize cost overruns. 4. Long performance period suggests a sustained need for these kits. 5. No small business set-aside indicates a focus on large prime contractors. 6. Contract performance is concentrated in Kentucky.

Value Assessment

Rating: fair

The total award amount of $48.2 million for production kits is difficult to benchmark without knowing the specific nature and quantity of the kits. The cost-plus-fixed-fee (CPFF) contract type, while common for R&D or uncertain scope, carries inherent risks of cost escalation compared to fixed-price contracts. The fixed fee component is a percentage of the estimated cost, meaning higher costs result in higher fees for the contractor. Without more detail on the unit cost or the number of kits, a precise value-for-money assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple capable vendors had the opportunity to bid. However, it is a delivery order against an existing contract, meaning the competition likely occurred at the IDIQ (Indefinite Delivery, Indefinite Quantity) or similar contract level. The specific competition for this delivery order is not detailed, but the initial award mechanism implies a broad search for qualified contractors.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to better pricing and innovation. However, the specifics of the competition for this particular delivery order are not fully transparent.

Public Impact

Special Operations Command (SOCOM) personnel will benefit from the delivery of these production kits. The kits are intended to support specific operational requirements of U.S. Special Operations Forces. The primary geographic impact is in Kentucky, where the contract will be performed. The contract supports the workforce of Lockheed Martin Corporation and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contract type can lead to higher costs than fixed-price agreements.
Lack of transparency on the specific contents and unit cost of 'production kits' hinders detailed value analysis.
Long contract duration (1826 days) increases exposure to potential cost increases over time.

Positive Signals

Awarded under full and open competition, suggesting a robust initial vetting of potential contractors.
Prime contractor, Lockheed Martin, is a well-established defense contractor with a track record.
Delivery order against an existing contract vehicle may indicate streamlined procurement for a known need.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically supporting specialized equipment for U.S. Special Operations Command. The market for such specialized kits is often niche, with a limited number of prime contractors capable of meeting stringent military requirements. Spending in this area is driven by evolving operational needs and technological advancements in defense capabilities. Comparable spending benchmarks would typically be found within SOCOM's procurement history for similar support services or specialized equipment.

Small Business Impact

This contract was not awarded as a small business set-aside, and the prime contractor is Lockheed Martin Corporation, a large business. There is no explicit information provided regarding subcontracting plans for small businesses within this specific delivery order. The absence of a set-aside suggests that the requirement was either not suitable for small business participation or that the competition focused on large prime capabilities.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense and U.S. Special Operations Command. As a delivery order against a larger contract, existing oversight mechanisms from the parent contract likely apply. Transparency is facilitated by contract award databases, but detailed performance metrics and cost breakdowns may be less publicly accessible. The Inspector General of the Department of Defense would have jurisdiction for audits and investigations.

Related Government Programs

Special Operations Forces Support Contracts
Defense Production Equipment
Lockheed Martin Corporation Contracts
Department of Defense Procurement

Risk Flags

Cost-Plus-Fixed-Fee contract type carries inherent risk of cost overruns.
Lack of specific detail on 'production kits' hinders thorough value analysis.
Long performance period increases exposure to market and technological changes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $48.2 million to LOCKHEED MARTIN CORPORATION. BLK 3 PRODUCTION KITS TO AWARD

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (U.S. Special Operations Command).

What is the total obligated amount?

The obligated amount is $48.2 million.

What is the period of performance?

Start: 2020-01-16. End: 2025-01-15.

What are the specific 'production kits' being procured, and what is their intended use?

The provided data does not specify the exact nature or intended use of the 'BLK 3 PRODUCTION KITS'. The North American Industry Classification System (NAICS) code 561990, 'All Other Support Services,' is very broad and offers little specific insight. Typically, 'production kits' could refer to components for manufacturing, assembly, or field deployment of specialized equipment. Given the award to U.S. Special Operations Command, these kits likely support unique operational capabilities or platforms critical to SOCOM's mission. Further details would require access to the contract's statement of work or related documentation.

How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for similar defense procurements?

Cost-plus-fixed-fee (CPFF) contracts are often used when the scope of work is not well-defined, involves significant research and development, or carries substantial technical uncertainty. In such cases, it allows the contractor to be reimbursed for allowable costs plus a predetermined fixed fee, which represents their profit. Compared to fixed-price contracts (like FFP - Firm-Fixed-Price), CPFF shifts more cost risk to the government. While it can facilitate innovation and adaptation, it may also incentivize higher spending as the contractor's fee is a percentage of the total cost. For procurements with well-defined requirements and lower risk, fixed-price contracts are generally preferred for better cost control and value for taxpayers.

What is the historical spending pattern for similar 'production kits' or support services by U.S. Special Operations Command?

Analyzing historical spending patterns for 'production kits' by U.S. Special Operations Command (SOCOM) requires access to detailed procurement data beyond the scope of this single award. The broad NAICS code 561990 makes it challenging to isolate specific spending on 'production kits' without further context. However, SOCOM historically procures a wide range of specialized equipment and support services to meet unique operational demands. Spending in this category can fluctuate based on evolving threats, technological advancements, and specific mission requirements. A comprehensive analysis would involve querying federal procurement databases for similar contract actions over several fiscal years, filtering by agency, relevant service descriptions, and potentially specific program names if known.

What is Lockheed Martin Corporation's track record with U.S. Special Operations Command, particularly on CPFF contracts?

Lockheed Martin Corporation is a major defense contractor with extensive experience and a significant contract history with various U.S. military branches, including U.S. Special Operations Command (SOCOM). They have been awarded numerous contracts across a wide spectrum of defense systems, services, and technologies. Regarding Cost-Plus-Fixed-Fee (CPFF) contracts, Lockheed Martin, like other large defense primes, has experience managing such agreements. Their track record on CPFF contracts would typically be evaluated based on past performance metrics, including adherence to cost and schedule, quality of deliverables, and overall program success. While specific performance details for this particular contract are not yet available, their status as a prime contractor suggests a generally acceptable performance history with the government.

What are the potential risks associated with a long-duration contract (1826 days) for production kits?

A long contract duration of 1826 days (approximately 5 years) for production kits introduces several potential risks. Firstly, the longer timeframe increases the likelihood of cost escalation due to inflation, material price fluctuations, and potential changes in labor costs. Secondly, technological obsolescence is a concern; the kits produced early in the contract might be less relevant or effective by the end of the performance period, especially in rapidly evolving defense environments. Thirdly, maintaining consistent quality and performance over such an extended period can be challenging. Finally, the government's flexibility to adapt to changing requirements or to switch to alternative solutions is reduced, potentially locking it into a specific technology or supplier for an extended duration.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Other Support Services › All Other Support Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: H9225416R0001

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 5749 BRIAR HILL RD, LEXINGTON, KY, 40516

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: $48,246,922

Exercised Options: $48,246,922

Current Obligation: $48,246,922

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $1,414,290

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: H9225417D0001

IDV Type: IDC

Timeline