DoD's AEGIS BMD International Support Contract Exceeds $3 Billion, Awarded to Lockheed Martin
Contract Overview
Contract Amount: $3,096,214,936 ($3.1B)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2009-10-01
End Date: 2022-12-31
Contract Duration: 4,839 days
Daily Burn Rate: $639.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: R&D
Official Description: AEGIS BMD INTERNATIONAL SUPPORT
Place of Performance
Location: MOORESTOWN, BURLINGTON County, NEW JERSEY, 08057
Plain-Language Summary
Department of Defense obligated $3.10 billion to LOCKHEED MARTIN CORPORATION for work described as: AEGIS BMD INTERNATIONAL SUPPORT Key points: 1. Significant spending of over $3 billion on a single contract highlights major program investment. 2. Sole awardee, Lockheed Martin, dominates this specialized R&D sector. 3. Long contract duration (over 13 years) suggests sustained, complex support needs. 4. High R&D spending in a niche area indicates potential for technological advancement and associated risks.
Value Assessment
Rating: questionable
The contract's Cost Plus Incentive Fee (CPIF) structure can lead to cost overruns if not managed tightly. Benchmarking is difficult due to the specialized nature of AEGIS BMD international support.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, raising concerns about price discovery and potential lack of competitive pressure to optimize costs. The sole-source award limits options for the government.
Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for services and technology that could potentially be acquired at a lower cost through a competitive process.
Public Impact
Supports critical national security interests through missile defense capabilities. Impacts international relations and defense partnerships by providing advanced technology. Drives innovation in a highly specialized R&D field, potentially leading to future technological breakthroughs.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus contract type
- Long contract duration
- High dollar value
Positive Signals
- Supports critical national security
- Advanced technology development
- Potential for innovation
Sector Analysis
This contract falls under Research and Development in Physical, Engineering, and Life Sciences. Spending in this sector is often characterized by high costs, long development cycles, and significant technological risk, but also potential for groundbreaking advancements.
Small Business Impact
The data indicates this contract was awarded to Lockheed Martin Corporation, a large business. There is no indication of small business participation in this specific contract award.
Oversight & Accountability
The contract's long duration and sole-source nature warrant close oversight to ensure cost control, performance, and adherence to program objectives. Regular reviews are crucial for accountability.
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
- Sole-source award limits competitive pricing.
- Cost-plus contract type can incentivize higher costs.
- Long contract duration increases risk of inefficiency.
- High dollar value represents significant taxpayer exposure.
- Specialized R&D area may have limited alternative providers.
Tags
research-and-development-in-the-physical, department-of-defense, nj, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $3.10 billion to LOCKHEED MARTIN CORPORATION. AEGIS BMD INTERNATIONAL SUPPORT
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Missile Defense Agency).
What is the total obligated amount?
The obligated amount is $3.10 billion.
What is the period of performance?
Start: 2009-10-01. End: 2022-12-31.
What is the justification for the sole-source award and how is value for money ensured without competition?
Sole-source awards are typically justified by unique capabilities, proprietary technology, or urgent needs. For this contract, the justification likely stems from the highly specialized and integrated nature of the AEGIS BMD system. Value is theoretically ensured through contract clauses like incentive fees and rigorous performance monitoring by the Missile Defense Agency, though the absence of competition inherently limits price discovery.
What are the primary risks associated with a Cost Plus Incentive Fee (CPIF) contract of this magnitude and duration?
The primary risks with a CPIF contract of this scale include potential cost overruns if targets are not met or if the incentive structure is not well-aligned with desired outcomes. The long duration increases the risk of scope creep, evolving requirements, and contractor inefficiency going unnoticed. Ensuring robust government oversight and clear performance metrics is critical to mitigate these risks.
How does this significant R&D investment contribute to overall US missile defense effectiveness and technological superiority?
This substantial investment in AEGIS BMD international support is crucial for maintaining and enhancing a key component of US missile defense architecture. It facilitates upgrades, integration with allied systems, and potentially the development of new capabilities, thereby bolstering overall effectiveness. Continued R&D ensures the US maintains a technological edge against evolving threats.
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: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Address: 199 BORTON LANDING RD, MOORESTOWN, NJ, 08057
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $3,300,723,444
Exercised Options: $3,300,663,783
Current Obligation: $3,096,214,936
Actual Outlays: $87,629,968
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2009-10-01
Current End Date: 2022-12-31
Potential End Date: 2022-12-31 00:00:00
Last Modified: 2025-07-16
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