DoD's $381.8M LRASM Acquisition: Accelerated R&D Contract Awarded to Lockheed Martin
Contract Overview
Contract Amount: $381,815,207 ($381.8M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2014-07-03
End Date: 2018-02-28
Contract Duration: 1,336 days
Daily Burn Rate: $285.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: IGF::OT::IGF LONG RANGE ANTI-SHIP MISSILE (LRASM) ACCELERATED ACQUISITION (AA)
Place of Performance
Location: ORLANDO, ORANGE County, FLORIDA, 32819
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $381.8 million to LOCKHEED MARTIN CORPORATION for work described as: IGF::OT::IGF LONG RANGE ANTI-SHIP MISSILE (LRASM) ACCELERATED ACQUISITION (AA) Key points: 1. Significant investment in advanced missile technology. 2. Sole-source award to Lockheed Martin raises competition concerns. 3. Focus on R&D suggests potential for future technological advancements. 4. Contract duration and cost structure warrant close monitoring.
Value Assessment
Rating: questionable
The contract's cost-plus incentive fee structure can lead to cost overruns if not managed tightly. Benchmarking against similar R&D contracts is difficult due to the specialized nature of the LRASM.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award to Lockheed Martin. This limits price discovery and potentially increases costs for taxpayers.
Taxpayer Impact: The lack of competition may result in higher spending than if multiple vendors had vied for the contract.
Public Impact
Enhances U.S. naval defense capabilities with advanced anti-ship missile technology. Supports technological innovation in the defense sector. Potential for job creation within Lockheed Martin and its supply chain.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus contract type
- Accelerated acquisition approach
Positive Signals
- Development of critical defense technology
- Potential for technological superiority
Sector Analysis
This contract falls under Research and Development in Physical, Engineering, and Life Sciences. Defense R&D spending is a significant portion of the federal budget, with a focus on maintaining technological advantage.
Small Business Impact
The data does not indicate any specific subcontracting goals or participation from small businesses in this contract.
Oversight & Accountability
The Department of Defense, through its agencies like the Defense Contract Management Agency, is responsible for overseeing this contract. Accountability will depend on robust performance monitoring and financial oversight.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award limits competition.
- Cost-plus contract type can lead to cost overruns.
- Accelerated acquisition may increase technical and schedule risks.
- Lack of small business participation noted.
- Specific performance metrics and incentive targets are not detailed.
Tags
research-and-development-in-the-physical, department-of-defense, fl, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $381.8 million to LOCKHEED MARTIN CORPORATION. IGF::OT::IGF LONG RANGE ANTI-SHIP MISSILE (LRASM) ACCELERATED ACQUISITION (AA)
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $381.8 million.
What is the period of performance?
Start: 2014-07-03. End: 2018-02-28.
What is the projected return on investment for this accelerated acquisition program in terms of enhanced warfighting capability?
The return on investment is primarily measured by the enhanced warfighting capability and deterrence provided by the LRASM. While difficult to quantify financially, the strategic advantage gained by possessing advanced long-range anti-ship missiles is considered substantial by military planners. The accelerated acquisition aims to field this capability sooner, reducing the window of vulnerability.
What are the specific risks associated with the accelerated acquisition approach for this missile system?
Accelerated acquisition can increase risks such as insufficient testing, potential for undiscovered technical flaws, and higher costs due to compressed timelines and reduced competition. There's also a risk that requirements may evolve during the rapid development, leading to costly modifications or a system that doesn't fully meet future needs.
How effectively will the incentive fee structure ensure cost control and performance for the LRASM development?
The incentive fee structure is designed to motivate Lockheed Martin to meet cost, schedule, and performance targets. Its effectiveness hinges on the clarity and attainability of these targets, as well as the rigor of the government's oversight in tracking progress and determining fee payouts. Without strong oversight, the incentives may not yield the desired cost savings or performance improvements.
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 › DEFENSE (OTHER) R&D
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
Parent Company: Lockheed Martin Corp
Address: 5600 W SAND LAKE RD # MP-265, ORLANDO, FL, 32819
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: $387,462,093
Exercised Options: $387,462,093
Current Obligation: $381,815,207
Subaward Activity
Number of Subawards: 6
Total Subaward Amount: $11,568,193
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2014-07-03
Current End Date: 2018-02-28
Potential End Date: 2018-02-28 00:00:00
Last Modified: 2023-08-17
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