DoD's $35M Multi Object Kill Vehicle R&D contract with Lockheed Martin faces scrutiny over value and competition
Contract Overview
Contract Amount: $34,965,267 ($35.0M)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2017-03-09
End Date: 2021-01-31
Contract Duration: 1,424 days
Daily Burn Rate: $24.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: IGF::OT::IGF MULTI OBJECT KILL VEHICLE RISK REDUCTION. THE ADVANCEMENT OF MULTI OBJECT VEHICLE TECHNOLOGIES.
Place of Performance
Location: SUNNYVALE, SANTA CLARA County, CALIFORNIA, 94089
Plain-Language Summary
Department of Defense obligated $35.0 million to LOCKHEED MARTIN CORP for work described as: IGF::OT::IGF MULTI OBJECT KILL VEHICLE RISK REDUCTION. THE ADVANCEMENT OF MULTI OBJECT VEHICLE TECHNOLOGIES. Key points: 1. The contract awarded to Lockheed Martin for $34.97M focuses on advancing Multi Object Kill Vehicle technologies. 2. Competition was full and open, but the contract type (Cost Plus Fixed Fee) can incentivize cost overruns. 3. The primary risk lies in the effectiveness and ultimate utility of the developed technology for its intended purpose. 4. Spending falls within the Research and Development sector, specifically R&D in Physical, Engineering, and Life Sciences.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee contract type, while common in R&D, offers less incentive for cost control compared to fixed-price contracts. Benchmarking R&D effectiveness is inherently difficult, making value assessment challenging.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the Cost Plus Fixed Fee structure may not have fully leveraged competitive pressures to drive down costs.
Taxpayer Impact: Taxpayer funds are supporting advanced defense technology development. The ultimate return on investment depends on the successful maturation and deployment of the Multi Object Kill Vehicle technology.
Public Impact
Advancement of critical missile defense technology. Potential enhancement of national security capabilities. Investment in cutting-edge aerospace and defense research.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type.
- Long contract duration (1424 days).
- Focus on R&D with uncertain outcomes.
Positive Signals
- Full and open competition.
- Strategic importance of missile defense technology.
Sector Analysis
This contract falls under the Research and Development sector, specifically NAICS code 541712. Spending in this area is crucial for technological advancement but often carries higher risk due to the inherent uncertainties of innovation.
Small Business Impact
The data indicates this contract was awarded to Lockheed Martin, a large defense contractor. There is no explicit information provided regarding small business participation or subcontracting.
Oversight & Accountability
Oversight is managed by the Department of Defense's Missile Defense Agency. The effectiveness of oversight will be critical in managing costs and ensuring the successful development of the technology under the CPFF contract.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
- Department of Defense Contracting
- Missile Defense Agency Programs
Risk Flags
- Cost Plus Fixed Fee contract type.
- Long contract duration.
- Uncertainty inherent in R&D projects.
- Potential for cost overruns.
- Dependence on future integration and testing.
Tags
research-and-development-in-the-physical, department-of-defense, ca, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $35.0 million to LOCKHEED MARTIN CORP. IGF::OT::IGF MULTI OBJECT KILL VEHICLE RISK REDUCTION. THE ADVANCEMENT OF MULTI OBJECT VEHICLE TECHNOLOGIES.
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 $35.0 million.
What is the period of performance?
Start: 2017-03-09. End: 2021-01-31.
What is the projected timeline for demonstrating the effectiveness of the Multi Object Kill Vehicle technology developed under this contract?
The contract's period of performance ended in January 2021, with a duration of 1424 days. While the contract itself is complete, the demonstration of the technology's effectiveness would likely occur in subsequent phases or follow-on contracts, potentially involving live-fire tests and integration into existing defense systems.
How does the Cost Plus Fixed Fee structure impact the risk of cost overruns for this specific R&D project?
The CPFF structure shifts a significant portion of the financial risk to the government. While it allows contractors to cover all allowable costs plus a fixed fee, it can reduce the incentive for efficient spending and cost control, potentially leading to overruns if not rigorously overseen.
What are the key performance indicators used to measure the success of this R&D effort beyond technological feasibility?
Specific performance indicators for R&D contracts like this are often tied to technical milestones, successful testing of prototypes, and the achievement of defined performance parameters for the kill vehicle. Broader success metrics would include its integration capability and contribution to the overall missile defense architecture.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: HQ0147-15-BAA
Offers Received: 3
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 1111 LOCKHEED MARTIN WAY, SUNNYVALE, CA, 94089
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $52,852,807
Exercised Options: $52,852,807
Current Obligation: $34,965,267
Subaward Activity
Number of Subawards: 50
Total Subaward Amount: $90,725,903
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2017-03-09
Current End Date: 2021-01-31
Potential End Date: 2021-01-31 00:00:00
Last Modified: 2022-10-11
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