DoD Awards $5.8B to Lockheed Martin for THAAD Missile Defense Components
Contract Overview
Contract Amount: $5,817,859,454 ($5.8B)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2006-12-22
End Date: 2023-03-31
Contract Duration: 5,943 days
Daily Burn Rate: $978.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: THAAD COMPONENTS FOR FIRE UNITS
Place of Performance
Location: SUNNYVALE, SANTA CLARA County, CALIFORNIA, 94089
Plain-Language Summary
Department of Defense obligated $5.82 billion to LOCKHEED MARTIN CORP for work described as: THAAD COMPONENTS FOR FIRE UNITS Key points: 1. Significant investment in advanced missile defense technology. 2. Sole-source award to Lockheed Martin raises questions about competition. 3. Long contract duration (2006-2023) suggests ongoing program needs. 4. High value contract for a critical defense system.
Value Assessment
Rating: questionable
The contract value of $5.8 billion is substantial. Without competitive bidding, it's difficult to assess if this price represents fair value compared to potential alternatives or market rates for similar complex defense systems.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there is no market pressure to drive down prices.
Taxpayer Impact: The lack of competition on this large contract may result in higher taxpayer costs than if multiple vendors had vied for the work.
Public Impact
Enhances national security by providing advanced missile defense capabilities. Supports high-tech manufacturing jobs within the defense sector. Long-term commitment to a critical component of U.S. defense strategy.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- High contract value
- Long contract duration
- Cost-plus contract type
Positive Signals
- Critical defense capability
- Established contractor
Sector Analysis
This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a highly specialized and capital-intensive area of defense spending. Benchmarks are difficult due to the unique nature of THAAD.
Small Business Impact
The data indicates this contract was not awarded to small businesses. Further analysis would be needed to determine if subcontracting opportunities were provided to small businesses.
Oversight & Accountability
The sole-source nature of this contract warrants close oversight from the Missile Defense Agency and Congress to ensure cost control and program effectiveness throughout its duration.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Missile Defense Agency Programs
Risk Flags
- Sole-source award limits competition and price discovery.
- Cost-plus contract type can incentivize higher spending.
- Long contract duration increases exposure to potential cost increases.
- Lack of transparency on justification for sole-source award.
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, ca, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $5.82 billion to LOCKHEED MARTIN CORP. THAAD COMPONENTS FOR FIRE UNITS
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORP.
Which agency awarded this contract?
Awarding agency: Department of Defense (Missile Defense Agency).
What is the total obligated amount?
The obligated amount is $5.82 billion.
What is the period of performance?
Start: 2006-12-22. End: 2023-03-31.
What was the justification for the sole-source award, and were alternatives considered?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Without specific documentation, it's unclear if alternatives were thoroughly explored or if the justification was solely based on the unique nature of THAAD components.
How does the cost per unit or system compare to similar missile defense programs, if data is available?
Direct per-unit cost comparisons are challenging due to the specialized and complex nature of the THAAD system and its components. Benchmarking against other advanced missile defense programs would require access to detailed cost breakdowns and performance metrics for those systems.
What measures are in place to ensure cost efficiency and prevent overruns given the cost-plus contract type?
Cost-plus contracts, especially incentive fee variants, aim to control costs through performance incentives. However, robust oversight, regular audits, and clear performance metrics are crucial to prevent cost overruns and ensure the contractor remains focused on efficiency and value.
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
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Address: 1111 LOCKHEED MARTIN WAY BLDG 157, SUNNYVALE, CA, 94089
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $5,886,333,340
Exercised Options: $5,886,333,340
Current Obligation: $5,817,859,454
Actual Outlays: $2,574,779
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2006-12-22
Current End Date: 2023-03-31
Potential End Date: 2023-03-31 00:00:00
Last Modified: 2024-07-16
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