DoD's $168.5M R&D contract with Lockheed Martin faces scrutiny for lack of competition
Contract Overview
Contract Amount: $168,554,442 ($168.6M)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2017-04-27
End Date: 2026-01-30
Contract Duration: 3,200 days
Daily Burn Rate: $52.7K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS INCENTIVE FEE
Sector: R&D
Official Description: IGF::CT::IGF EEPROM AWARD
Place of Performance
Location: SUNNYVALE, SANTA CLARA County, CALIFORNIA, 94089
Plain-Language Summary
Department of Defense obligated $168.6 million to LOCKHEED MARTIN CORP for work described as: IGF::CT::IGF EEPROM AWARD Key points: 1. Contract awarded via sole-source justification, raising concerns about price discovery and value for money. 2. Significant duration of over 8 years suggests a long-term need, but competition was not sought. 3. The 'Research and Development in the Social Sciences and Humanities' NAICS code is unusual for a major defense contractor. 4. Cost-plus incentive fee contract type can lead to cost overruns if not managed tightly. 5. No small business set-aside was applied, potentially limiting opportunities for smaller innovative firms. 6. The contract's value is substantial, warranting a closer look at performance metrics and deliverables.
Value Assessment
Rating: questionable
Benchmarking the value of this contract is challenging due to its specialized R&D nature and sole-source award. Without competitive bids, it's difficult to ascertain if the $168.5 million represents a fair market price. The cost-plus incentive fee structure necessitates rigorous oversight to ensure costs remain controlled and that the incentives align with achieving the research objectives efficiently. Comparisons to similar R&D contracts within the social sciences and humanities, especially those awarded to large defense contractors, are scarce, making a direct value-for-money assessment difficult.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one contractor, Lockheed Martin Corp, was solicited. The justification for this approach is not detailed in the provided data. Typically, sole-source awards occur when only one entity possesses the unique capability or technology required. However, the lack of competition means there was no opportunity for other firms to bid, potentially leading to higher prices and reduced innovation.
Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without competing offers, the government lacks a benchmark to ensure the most cost-effective solution was secured.
Public Impact
The primary beneficiary is Lockheed Martin Corp, which receives substantial funding for research and development services. The contract aims to deliver research and development outcomes, though the specific services are not detailed. The geographic impact is primarily linked to Lockheed Martin's operational locations, with California noted. Workforce implications include employment opportunities for researchers and support staff within Lockheed Martin.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition and potential for better value.
- Cost-plus incentive fee contracts carry inherent risks of cost escalation.
- Unclear specific R&D objectives and deliverables for a contract of this magnitude.
- NAICS code 'Research and Development in the Social Sciences and Humanities' seems atypical for a major defense contractor's core focus.
Positive Signals
- Lockheed Martin is a well-established defense contractor with extensive R&D capabilities.
- The contract duration suggests a strategic, long-term investment by the DoD.
- Cost-plus incentive fee structure can incentivize performance and efficiency if structured correctly.
Sector Analysis
This contract falls under the Research and Development sector, specifically within the unusual classification of 'Research and Development in the Social Sciences and Humanities.' While the defense sector heavily invests in R&D, this particular NAICS code is not typically associated with major defense contractors like Lockheed Martin. The overall market for defense R&D is vast, but contracts focused on social sciences within this context are less common and harder to benchmark against broader defense spending.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This means that opportunities for small businesses to participate, either as prime contractors or subcontractors, were not explicitly prioritized through a set-aside mechanism. While Lockheed Martin may engage small businesses as subcontractors, the absence of a set-aside suggests that the primary award was directed towards a large business, potentially limiting the direct impact on the small business ecosystem for this specific contract.
Oversight & Accountability
Oversight mechanisms for this contract would typically involve the Department of Defense's contracting officers and potentially the Inspector General's office, especially given the cost-plus nature and sole-source award. Accountability measures would be tied to the performance metrics and milestones outlined in the contract. Transparency is limited by the sole-source justification and the lack of detailed public information on the specific R&D objectives and outcomes.
Related Government Programs
- Department of Defense Research and Development Contracts
- Missile Defense Agency Contracts
- Lockheed Martin Contracts
- Cost-Plus Incentive Fee Contracts
- Sole Source Contracts
Risk Flags
- Lack of Competition
- Potential for Cost Overruns (CPIF)
- Unclear R&D Objectives
- Atypical NAICS Code for Contractor/Agency
Tags
department-of-defense, missile-defense-agency, lockheed-martin-corp, research-and-development, sole-source, cost-plus-incentive-fee, large-contract, california, ongoing-contract, defense-sector
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $168.6 million to LOCKHEED MARTIN CORP. IGF::CT::IGF EEPROM AWARD
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 $168.6 million.
What is the period of performance?
Start: 2017-04-27. End: 2026-01-30.
What specific research and development objectives are being pursued under this contract, and how do they align with the Missile Defense Agency's mission?
The provided data does not specify the exact research and development objectives for this $168.5 million contract awarded to Lockheed Martin Corp. The NAICS code '541720 - Research and Development in the Social Sciences and Humanities' is particularly unusual for a defense contract, especially one managed by the Missile Defense Agency (MDA), which typically focuses on advanced technological and engineering solutions for missile defense systems. It is possible the contract relates to human factors, strategic analysis, policy research, or other non-traditional areas that indirectly support missile defense. However, without further details, the alignment with MDA's core mission remains unclear and warrants further investigation into the contract's statement of work.
Why was this contract awarded on a sole-source basis instead of being competed openly?
The data indicates this contract was awarded as 'NOT COMPETED' (ct: NOT COMPETED), signifying a sole-source procurement. Government contracts are typically competed to ensure fair pricing and access to the widest range of capabilities. A sole-source award implies that the agency determined, likely through a justification and approval (J&A) process, that only Lockheed Martin Corp could provide the required goods or services. Reasons for sole-sourcing can include unique capabilities, proprietary technology, urgent needs where only one source can respond, or follow-on work to a previously competed effort where only the original contractor can perform. The specific justification for this $168.5 million contract is not provided, making it difficult to assess the validity of the sole-source determination.
How does the 'Cost Plus Incentive Fee' (CPIF) contract type potentially impact the final cost and performance outcomes?
A Cost Plus Incentive Fee (CPIF) contract, like the one awarded to Lockheed Martin for $168.5 million, is designed to share the risks and rewards between the government and the contractor. The government agrees to pay the contractor's allowable costs plus a fee that is adjusted based on performance against pre-determined targets (e.g., cost, schedule, or technical performance). If the contractor exceeds targets, the fee increases; if they fall short, the fee decreases, up to a ceiling. This structure incentivizes the contractor to perform efficiently and meet objectives. However, CPIF contracts also carry the risk of cost overruns if targets are not well-defined or if the contractor prioritizes fee maximization over strict cost control. Robust government oversight is crucial to manage this risk effectively.
What is the significance of the NAICS code '541720 - Research and Development in the Social Sciences and Humanities' for a defense contract of this size?
The assignment of NAICS code 541720 ('Research and Development in the Social Sciences and Humanities') to a $168.5 million contract awarded to Lockheed Martin Corp by the Missile Defense Agency is highly unusual. This code typically covers research in fields like sociology, psychology, anthropology, and economics, which are not core to traditional missile defense engineering. While such research could potentially support strategic planning, human factors analysis, or policy development related to missile defense, its application to a major defense contractor and a significant sum suggests a specialized or perhaps unconventional R&D focus. This atypical classification warrants further inquiry into the specific nature of the research being conducted and its direct relevance to the MDA's mission.
What is Lockheed Martin Corp's track record with similar large-scale R&D contracts, particularly with the Department of Defense?
Lockheed Martin Corporation is a major defense contractor with a long and extensive history of performing large-scale research and development (R&D) contracts for the Department of Defense (DoD) and other government agencies. They are involved in numerous complex programs across various domains, including aerospace, defense systems, and advanced technologies. While specific performance data for this particular $168.5 million contract is not yet available due to its ongoing nature (award date 2017, end date 2026), Lockheed Martin generally possesses significant R&D capabilities. However, like any large contractor, they have faced scrutiny on specific contracts regarding cost, schedule, and performance in the past. Assessing their track record requires examining performance metrics on comparable DoD R&D efforts, particularly those involving advanced technology development and system integration.
How does the contract's duration (over 8 years) influence the assessment of its value and risk?
The extended duration of this contract, spanning from April 27, 2017, to January 30, 2026 (over 8 years), suggests a long-term strategic objective or a phased research and development effort. For a sole-source, cost-plus incentive fee contract, such a long period increases the potential for cost growth and scope creep if not meticulously managed. It also means that the government is committed to this specific contractor for an extended period, potentially limiting flexibility to adapt to changing requirements or explore alternative solutions that might emerge. Assessing value over such a long term requires continuous monitoring of milestones, deliverables, and cost performance, as well as periodic reviews to ensure continued alignment with agency needs and market conditions.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Social Sciences and Humanities
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
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, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $172,618,928
Exercised Options: $172,618,928
Current Obligation: $168,554,442
Actual Outlays: $6,748,815
Subaward Activity
Number of Subawards: 75
Total Subaward Amount: $184,153,539
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: HQ014712D0001
IDV Type: IDC
Timeline
Start Date: 2017-04-27
Current End Date: 2026-01-30
Potential End Date: 2026-01-30 00:00:00
Last Modified: 2025-07-17
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