DoD's $360M AEGIS ASHORE Engineering Agent Contract Awarded to Lockheed Martin Raises Questions on Competition
Contract Overview
Contract Amount: $360,584,052 ($360.6M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2010-08-05
End Date: 2016-08-03
Contract Duration: 2,190 days
Daily Burn Rate: $164.7K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: AEGIS ASHORE ENGINEERING AGENT
Place of Performance
Location: MOORESTOWN, BURLINGTON County, NEW JERSEY, 08057
Plain-Language Summary
Department of Defense obligated $360.6 million to LOCKHEED MARTIN CORPORATION for work described as: AEGIS ASHORE ENGINEERING AGENT Key points: 1. Significant investment in R&D for missile defense systems. 2. Sole-source award to Lockheed Martin limits competitive pricing. 3. Potential for cost overruns due to Cost Plus Fixed Fee structure. 4. Missile Defense Agency's reliance on a single contractor warrants scrutiny.
Value Assessment
Rating: questionable
The $360.5 million contract for AEGIS ASHORE Engineering Agent services was awarded on a sole-source basis. Without competitive bidding, it is difficult to assess if the pricing is optimal compared to potential market rates for similar complex engineering services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This lack of competition likely prevented price discovery and may have resulted in higher costs for the government.
Taxpayer Impact: The absence of competition for a contract of this magnitude means taxpayers may not have received the best possible value, potentially subsidizing higher costs.
Public Impact
National security implications of AEGIS ASHORE system development. Taxpayer funds allocated to advanced missile defense technology. Potential impact on future defense contracting strategies. Role of Lockheed Martin in critical defense infrastructure.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition.
- Cost Plus Fixed Fee contract type can incentivize cost growth.
- Lack of small business participation noted.
- Contract duration is substantial.
Positive Signals
- Addresses critical national security need for missile defense.
- Awarded to a known defense contractor with relevant expertise.
Sector Analysis
This contract falls under Research and Development in the Physical, Engineering, and Life Sciences. Spending in this sector is crucial for technological advancement but requires careful oversight to ensure efficiency and value, especially in sole-source scenarios.
Small Business Impact
The data indicates that small businesses were not involved in this contract (ss: false, sb: false). This suggests a focus on large, established prime contractors for complex defense systems, potentially missing opportunities for small business innovation and participation.
Oversight & Accountability
The sole-source nature of this award necessitates robust oversight from the Department of Defense and the Missile Defense Agency to ensure cost control, performance, and adherence to contract terms. Transparency in reporting is crucial.
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 Fixed Fee contract type poses cost overrun risk.
- No small business participation.
- Long contract duration requires sustained oversight.
Tags
research-and-development-in-the-physical, department-of-defense, nj, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $360.6 million to LOCKHEED MARTIN CORPORATION. AEGIS ASHORE ENGINEERING AGENT
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 $360.6 million.
What is the period of performance?
Start: 2010-08-05. End: 2016-08-03.
What justification was provided for the sole-source award, and were alternative competitive strategies considered?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Without specific documentation, it's difficult to ascertain the precise reasons. However, for a contract of this scale and duration, exploring competitive options, even if limited, is generally preferred to ensure optimal pricing and foster innovation.
What are the projected cost efficiencies or risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this R&D effort?
CPFF contracts aim to provide the contractor with cost reimbursement plus a fixed fee, offering flexibility for R&D where final costs are uncertain. However, this structure can incentivize cost overruns as the contractor is assured cost recovery. Robust government oversight and clear performance metrics are essential to mitigate risks and control expenditures.
How does the Missile Defense Agency ensure effective program management and accountability given the sole-source award to Lockheed Martin?
Effective program management under a sole-source award relies heavily on stringent government oversight, detailed performance metrics, and regular reviews. The agency must actively monitor progress, validate costs, and ensure the contractor meets all technical and schedule requirements to hold them accountable for delivering the AEGIS ASHORE system effectively.
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
Solicitation ID: HQ027610R0003
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
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: $374,780,407
Exercised Options: $374,780,407
Current Obligation: $360,584,052
Subaward Activity
Number of Subawards: 46
Total Subaward Amount: $6,747,557
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2010-08-05
Current End Date: 2016-08-03
Potential End Date: 2016-08-03 00:00:00
Last Modified: 2021-09-28
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