DoD Awards $82M THAAD Logistics Contract to Lockheed Martin for Missile System Sustainment
Contract Overview
Contract Amount: $82,007,862 ($82.0M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2022-05-22
End Date: 2025-10-30
Contract Duration: 1,257 days
Daily Burn Rate: $65.2K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: THIS TASK ORDER IS FOR LOGISTICS, MAINTENANCE, AND SUSTAINMENT OF THE THAAD MISSILE SYSTEM.
Place of Performance
Location: GRAND PRAIRIE, DALLAS County, TEXAS, 75051
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $82.0 million to LOCKHEED MARTIN CORPORATION for work described as: THIS TASK ORDER IS FOR LOGISTICS, MAINTENANCE, AND SUSTAINMENT OF THE THAAD MISSILE SYSTEM. Key points: 1. Significant contract for critical missile defense system logistics and maintenance. 2. Sole-source award to Lockheed Martin, raising questions about competition. 3. Long-term sustainment contract (over 3 years) indicates ongoing need. 4. Focus on logistics, maintenance, and sustainment suggests operational reliance.
Value Assessment
Rating: fair
The contract value of $82M over 3 years for logistics and sustainment of a complex missile system appears reasonable. However, without specific performance metrics or comparison to similar sustainment contracts for advanced weapon systems, a definitive value assessment is difficult.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Lockheed Martin. This limits price discovery and potentially leads to higher costs for taxpayers as competitive pressures are absent.
Taxpayer Impact: The lack of competition in this sole-source award may result in higher costs for taxpayers compared to a competitively bid contract.
Public Impact
Ensures continued operational readiness of the THAAD missile defense system. Supports national security by maintaining a critical defense asset. Potential for cost overruns due to sole-source nature. Impacts the supply chain and workforce involved in THAAD sustainment.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price discovery.
- Long-term contract duration may not reflect evolving needs or technologies.
- Lack of detailed performance metrics makes value assessment challenging.
Positive Signals
- Ensures critical logistics and sustainment for a key defense system.
- Awarded to the original equipment manufacturer, likely possessing specialized knowledge.
- Contract includes incentive fee structure, potentially driving performance.
Sector Analysis
This contract falls under professional services, specifically logistics and consulting, within the defense sector. Spending benchmarks for sustainment of complex weapon systems vary widely, but $82M over three years for a critical system like THAAD is substantial, reflecting the system's complexity and strategic importance.
Small Business Impact
The data indicates this contract was not awarded to small businesses, as Lockheed Martin is a large corporation. There is no indication of subcontracting opportunities for small businesses within this specific award.
Oversight & Accountability
The Department of Defense, specifically the Missile Defense Agency, is responsible for overseeing this contract. The 'COST PLUS INCENTIVE FEE' structure suggests some level of performance-based oversight is intended, but the sole-source nature warrants close scrutiny to ensure fair pricing and effective service delivery.
Related Government Programs
- Process, Physical Distribution, and Logistics Consulting Services
- Department of Defense Contracting
- Missile Defense Agency Programs
Risk Flags
- Sole-source award limits competition.
- Potential for cost creep without competitive pressure.
- Lack of transparency on specific performance metrics.
- Long-term commitment to a specific system's sustainment.
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 $82.0 million to LOCKHEED MARTIN CORPORATION. THIS TASK ORDER IS FOR LOGISTICS, MAINTENANCE, AND SUSTAINMENT OF THE THAAD MISSILE SYSTEM.
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 $82.0 million.
What is the period of performance?
Start: 2022-05-22. End: 2025-10-30.
What is the justification for the sole-source award, and what steps are being taken to ensure fair and reasonable pricing?
Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. For the THAAD system, this is often Lockheed Martin as the prime contractor and developer. To ensure fair pricing, the government likely relies on cost analysis, historical pricing data, and potentially independent cost estimates. However, the absence of competition inherently reduces the government's leverage in price negotiations.
How will the performance of logistics, maintenance, and sustainment be measured, and what are the key performance indicators (KPIs) for this contract?
The contract type (Cost Plus Incentive Fee) implies that performance will be measured against specific objectives, likely related to system availability, response times for maintenance, and successful execution of logistics operations. Key performance indicators would typically include metrics like Mean Time Between Failures (MTBF), Mean Time To Repair (MTTR), on-time delivery of parts, and overall system readiness rates. Specific KPIs should be detailed within the contract's Statement of Work.
What is the long-term strategy for THAAD system sustainment, and will future requirements be competed?
The long-term strategy for THAAD sustainment is likely focused on maintaining the system's effectiveness throughout its lifecycle. While this specific task order is sole-source, future sustainment requirements, especially those that evolve or become more standardized, may be subject to competition. The Missile Defense Agency would need to assess market capabilities and potential for new entrants or alternative solutions as the system matures.
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, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: HQ085320R0028
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp
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: $82,007,862
Exercised Options: $82,007,862
Current Obligation: $82,007,862
Actual Outlays: $43,323,726
Subaward Activity
Number of Subawards: 82
Total Subaward Amount: $20,986,064
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: 2022-05-22
Current End Date: 2025-10-30
Potential End Date: 2025-10-30 00:00:00
Last Modified: 2025-09-09
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