Lockheed Martin awarded $267.9M contract for Missile Warning products by U.S. Special Operations Command

Contract Overview

Contract Amount: $2,679,266 ($2.7M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2024-08-29

End Date: 2026-08-28

Contract Duration: 729 days

Daily Burn Rate: $3.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: MISSILE WARNING (MW) PRODUCT OFFICE

Place of Performance

Location: LEXINGTON, FAYETTE County, KENTUCKY, 40516

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $2.7 million to LOCKHEED MARTIN CORPORATION for work described as: MISSILE WARNING (MW) PRODUCT OFFICE Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 3. The duration of 729 days indicates a significant, long-term need for these services. 4. The contract is for 'All Other Support Services,' a broad category that requires further definition for precise value assessment. 5. The award to Lockheed Martin, a major defense contractor, places this within a known industry landscape. 6. The geographic location of performance is Kentucky, potentially impacting local economies and workforce.

Value Assessment

Rating: fair

Benchmarking the value of this $267.9 million contract is challenging without specific details on the 'Missile Warning (MW) Product Office' services. The Cost Plus Fixed Fee (CPFF) contract type, while allowing flexibility, carries inherent risks of cost escalation compared to fixed-price contracts. Comparing this to similar support service contracts within the defense sector would require detailed service scope and performance metrics. The fixed fee component provides some cost control, but the overall value hinges on efficient execution and management of direct costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a 'full and open competition' solicitation, indicating that all responsible sources were permitted to submit bids. The number of bidders is not specified, but this method generally promotes price discovery and allows the government to select the best value offer. The open competition suggests a healthy market for these types of support services, potentially leading to more competitive pricing than a sole-source award.

Taxpayer Impact: Taxpayers benefit from the competitive process, which aims to secure the most advantageous pricing and terms for the government. Open competition increases the likelihood that the awarded price reflects market rates and that the chosen contractor offers the best overall value.

Public Impact

The primary beneficiaries are likely U.S. Special Operations Command (SOCOM) personnel who rely on effective missile warning systems for operational safety and mission success. The services delivered are related to the 'Missile Warning (MW) Product Office,' implying support for critical defense technology. Geographic impact is concentrated in Kentucky, where the contract performance is scheduled. Workforce implications may include job creation or sustainment within the defense support services sector in Kentucky.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type introduces risk of cost overruns if not diligently managed.
The broad 'All Other Support Services' category lacks specificity, making it difficult to assess the precise nature and value of the work performed.
Lack of detail on the number of bidders in the full and open competition makes it hard to gauge the intensity of competition.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
Lockheed Martin is a well-established defense contractor with significant experience in complex systems.
The contract duration suggests a sustained commitment to a critical capability.

Sector Analysis

The defense support services sector is a substantial segment of the federal contracting market, encompassing a wide array of technical, logistical, and operational support for military branches and agencies. This contract, focused on missile warning products, falls within the specialized area of defense electronics and systems support. Comparable spending benchmarks would typically be found within contracts for advanced warning systems, electronic warfare support, or specialized intelligence, surveillance, and reconnaissance (ISR) services, often awarded to large, established defense prime contractors.

Small Business Impact

The data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this specific contract award. This suggests that the primary focus was on securing specialized capabilities from larger, potentially more experienced contractors. There is no explicit mention of subcontracting requirements for small businesses, which could limit opportunities for the small business ecosystem in this particular instance.

Oversight & Accountability

Oversight for this contract will likely fall under the purview of the U.S. Special Operations Command's contracting and program management offices. Accountability measures are typically embedded within the Cost Plus Fixed Fee structure, requiring detailed cost reporting and performance metrics. Transparency may be enhanced through contract award databases and reporting requirements, though specific operational details of missile warning systems are often classified.

Related Government Programs

Missile Defense Systems
Intelligence, Surveillance, and Reconnaissance (ISR) Support
Advanced Warning Systems
Defense Electronics Support Services
Special Operations Forces Support

Risk Flags

Cost Plus Fixed Fee contract type carries inherent risk of cost escalation.
Broad service category ('All Other Support Services') lacks specificity, potentially impacting performance oversight and value assessment.
Limited information on the number of bidders in the full and open competition makes it difficult to fully assess competitive intensity.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $2.7 million to LOCKHEED MARTIN CORPORATION. MISSILE WARNING (MW) PRODUCT OFFICE

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 $2.7 million.

What is the period of performance?

Start: 2024-08-29. End: 2026-08-28.

What specific services does the 'Missile Warning (MW) Product Office' encompass under this contract?

The provided data categorizes the service under 'All Other Support Services' (NAICS 561990) and specifies the award is for 'Missile Warning (MW) Product Office' products. Without further details, it's difficult to ascertain the exact nature of these services. They could range from research and development, system integration, maintenance, testing, training, or logistical support for missile warning systems. The Cost Plus Fixed Fee (CPFF) structure suggests that the scope might be complex or evolving, requiring flexibility in cost management. Further clarification from the awarding agency would be needed to define the precise deliverables and technical requirements.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for similar defense support services?

Cost Plus Fixed Fee (CPFF) contracts are common in defense contracting, especially for research, development, or services where the scope is not fully defined at the outset. Unlike fixed-price contracts, CPFF reimburses the contractor for allowable costs plus a predetermined fixed fee representing profit. This offers flexibility but carries a higher risk of cost overruns for the government if costs exceed estimates. Compared to Cost Plus Incentive Fee (CPIF) or Cost Plus Award Fee (CPAF), CPFF offers less direct incentive for cost control beyond the fixed fee itself. Fixed-price contracts (like FFP or FP-EPA) generally offer better cost certainty for the government but may require a more rigidly defined scope and can deter contractors from innovative solutions if they perceive higher risk.

What is Lockheed Martin's track record with U.S. Special Operations Command (SOCOM) and missile warning systems?

Lockheed Martin Corporation is a major defense contractor with extensive experience supporting U.S. military branches, including SOCOM, and a significant portfolio in aerospace and defense systems. They are known for developing and producing advanced technologies, including missile defense and warning systems. While specific contract history with SOCOM for missile warning products isn't detailed here, Lockheed Martin's established presence and capabilities in this domain suggest they are a qualified incumbent or potential provider. A deeper dive into their contract awards database would reveal the extent and nature of their past performance with SOCOM and similar systems.

What are the potential risks associated with a $267.9 million contract for 'All Other Support Services'?

The primary risks associated with a large contract for 'All Other Support Services' stem from its broad and potentially undefined nature. This vagueness can lead to scope creep, cost overruns (especially with a CPFF structure), and difficulties in performance measurement. For taxpayers, the risk is paying for services that may not be clearly defined or efficiently delivered. The lack of specific performance metrics or detailed service descriptions makes it challenging to assess value for money. Furthermore, reliance on a single large contractor like Lockheed Martin, while offering expertise, could also present risks if competition is limited in subsequent phases or related procurements.

How does the geographic performance location in Kentucky impact the contract's value or execution?

The performance location in Kentucky (ST: KY, SN: KENTUCKY) primarily impacts the contract through labor costs, local economic contributions, and logistical considerations. Labor rates in Kentucky may differ from other regions, influencing the overall cost structure under the CPFF arrangement. The presence of a significant defense contract in the state can stimulate local employment and economic activity within the defense support sector. Logistically, it may streamline certain operations if related facilities or personnel are already based in the region. However, it could also present challenges if specialized skills or resources need to be brought in from outside the immediate area.

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: $3,930,345

Exercised Options: $2,679,266

Current Obligation: $2,679,266

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $4,208

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