DoD's $31.1M Missile Testing Support Contract Awarded to Lockheed Martin Raises Questions on Competition
Contract Overview
Contract Amount: $31,104,032 ($31.1M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2020-07-07
End Date: 2025-07-15
Contract Duration: 1,834 days
Daily Burn Rate: $17.0K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: STOCKPILE RELIABILITY PROGRAM (SRP) ANNEX TASK ORDER WILL PROCURE TOOLING, TEST FIXTURES, MISSILE CHECKOUT CONSOLES PRODUCTION AND OTHER EQUIPMENT TO SUPPORT MISSILE TESTING.
Place of Performance
Location: GRAND PRAIRIE, DALLAS County, TEXAS, 75051
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $31.1 million to LOCKHEED MARTIN CORPORATION for work described as: STOCKPILE RELIABILITY PROGRAM (SRP) ANNEX TASK ORDER WILL PROCURE TOOLING, TEST FIXTURES, MISSILE CHECKOUT CONSOLES PRODUCTION AND OTHER EQUIPMENT TO SUPPORT MISSILE TESTING. Key points: 1. The Department of Defense awarded a $31.1 million contract to Lockheed Martin for missile testing equipment. 2. This contract was not competed, raising concerns about potential overpricing and limited vendor options. 3. The procurement supports the Stockpile Reliability Program, crucial for national defense readiness. 4. The lack of competition may limit opportunities for small businesses and innovative solutions.
Value Assessment
Rating: questionable
The contract's value of $31.1 million for tooling and test equipment needs careful benchmarking against similar defense procurements. Without competitive bids, it's difficult to ascertain if this price reflects fair market value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded sole-source to Lockheed Martin, indicating a lack of competitive bidding. This method can lead to higher prices and may not leverage the full range of available market solutions.
Taxpayer Impact: The absence of competition could result in taxpayers paying a premium for the required missile testing equipment and services.
Public Impact
Ensures continued readiness and reliability of critical missile systems. Supports advanced technological development in defense capabilities. Potential for increased costs due to sole-source award impacting defense budget allocation.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for cost overruns
- Limited small business participation
Positive Signals
- Supports critical national defense program
- Procures essential testing equipment
Sector Analysis
This procurement falls within the defense sector, specifically supporting missile systems. Spending benchmarks for specialized tooling and test equipment can vary widely, but a lack of competition often inflates costs compared to open market procurements.
Small Business Impact
The sole-source nature of this award significantly limits opportunities for small businesses to participate or offer competitive solutions. This contract does not appear to have specific provisions for small business subcontracting.
Oversight & Accountability
Oversight is crucial for sole-source contracts to ensure fair pricing and prevent waste. The Missile Defense Agency should provide detailed justification for the lack of competition and rigorous cost analysis.
Related Government Programs
- Process, Physical Distribution, and Logistics Consulting Services
- Department of Defense Contracting
- Missile Defense Agency Programs
Risk Flags
- Sole-source award
- Lack of demonstrated price competition
- Potential for inflated costs
- Limited small business opportunities
Tags
process-physical-distribution-and-logist, department-of-defense, tx, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $31.1 million to LOCKHEED MARTIN CORPORATION. STOCKPILE RELIABILITY PROGRAM (SRP) ANNEX TASK ORDER WILL PROCURE TOOLING, TEST FIXTURES, MISSILE CHECKOUT CONSOLES PRODUCTION AND OTHER EQUIPMENT TO SUPPORT MISSILE TESTING.
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 $31.1 million.
What is the period of performance?
Start: 2020-07-07. End: 2025-07-15.
What is the justification for awarding this contract sole-source to Lockheed Martin, and what steps were taken to ensure a fair and reasonable price?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Rigorous price analysis, including comparison with historical data and independent cost estimates, should be conducted to ensure the price is fair and reasonable, even without competition. Documentation of these steps is vital for accountability.
What is the potential impact of this sole-source award on the overall cost-effectiveness of the Stockpile Reliability Program?
A sole-source award can lead to higher costs compared to a competitive process due to the absence of price pressure from multiple bidders. This could potentially increase the overall expenditure for the Stockpile Reliability Program, diverting funds that might otherwise be used for other critical defense initiatives or research.
Are there any plans to introduce competition in future task orders or related procurements for missile testing equipment and services?
Future competition could be introduced by breaking down requirements into smaller, more accessible contracts, conducting thorough market research to identify potential new vendors, and clearly defining performance-based requirements. Encouraging new entrants and fostering a competitive environment can lead to better value and innovation.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Process, Physical Distribution, and Logistics Consulting Services
Product/Service Code: MAINT/REPAIR SHOP EQPT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: HQ085320R0028
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1701 W MARSHALL DR, GRAND PRAIRIE, TX, 75051
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $38,222,442
Exercised Options: $31,104,032
Current Obligation: $31,104,032
Actual Outlays: $23,012,214
Subaward Activity
Number of Subawards: 59
Total Subaward Amount: $21,556,162
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: HQ085320D0001
IDV Type: IDC
Timeline
Start Date: 2020-07-07
Current End Date: 2025-07-15
Potential End Date: 2025-07-15 00:00:00
Last Modified: 2024-03-13
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