DARPA awards $386.6M contract to Lockheed Martin for R&D in physical, engineering, and life sciences

Contract Overview

Contract Amount: $386,556,612 ($386.6M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2020-09-25

End Date: 2026-07-31

Contract Duration: 2,135 days

Daily Burn Rate: $181.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: DARPA RESEARCH PROJECT

Place of Performance

Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93599

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $386.6 million to LOCKHEED MARTIN CORPORATION for work described as: DARPA RESEARCH PROJECT Key points: 1. Contract awarded on a sole-source basis, raising questions about potential cost efficiencies. 2. Significant investment in advanced research and development, aligning with national security objectives. 3. Long contract duration of over 5 years suggests a complex, multi-phase project. 4. Focus on physical, engineering, and life sciences indicates a broad scope of potential technological advancements. 5. Prime contractor, Lockheed Martin, has extensive experience in defense contracting and R&D.

Value Assessment

Rating: questionable

The contract's value of $386.6 million over five years is substantial. Without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar R&D efforts. The cost-plus-fixed-fee (CPFF) structure, while common for R&D, can lead to cost overruns if not closely managed. Further analysis of the fixed fee and the estimated cost components would be necessary to assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder was solicited. This approach is typically used when a unique capability or specialized expertise is required, or in cases of urgent need. The lack of competition means that the government did not benefit from a range of proposals and potentially lower prices that a competitive process might have yielded.

Taxpayer Impact: Sole-source awards can limit opportunities for price discovery and may result in higher costs for taxpayers compared to competitively bid contracts.

Public Impact

Benefits the Department of Defense and DARPA by advancing cutting-edge research in critical scientific fields. Services delivered include research and development activities aimed at creating new technologies and capabilities. Geographic impact is primarily centered in California, where the contractor is located, but the technological advancements could have national implications. Workforce implications include employment opportunities for scientists, engineers, and support staff at Lockheed Martin and its potential subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs.
Cost-plus-fixed-fee contract type carries inherent risk of cost escalation.
Long contract duration requires sustained oversight to ensure progress and prevent scope creep.

Positive Signals

Award to a prime contractor with a strong track record in defense R&D.
Focus on critical research areas aligned with national security priorities.
Potential for significant technological breakthroughs with broad applications.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The market for defense-related R&D is characterized by significant government investment, long development cycles, and the involvement of specialized contractors. Comparable spending benchmarks are difficult to establish without more specific details on the research objectives, but DARPA's overall R&D budget represents a substantial portion of the Department of Defense's innovation investment.

Small Business Impact

This contract does not appear to have a small business set-aside. As a sole-source award to a large prime contractor, the opportunities for small businesses would likely be through subcontracting. The extent to which Lockheed Martin will engage small businesses in fulfilling this contract is not specified and would require further investigation into their subcontracting plan.

Oversight & Accountability

Oversight for this contract would primarily fall under the purview of the Defense Advanced Research Projects Agency (DARPA) and the Department of Defense. Accountability measures would be tied to the achievement of research milestones and deliverables outlined in the contract. Transparency may be limited due to the nature of classified or sensitive research, but periodic reporting and reviews are standard oversight mechanisms.

Related Government Programs

DARPA Research Projects
Department of Defense Research and Development
Advanced Technology Development Contracts

Risk Flags

Sole-source award limits price competition.
Cost-plus-fixed-fee contract type can lead to cost overruns.
Long contract duration requires sustained oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $386.6 million to LOCKHEED MARTIN CORPORATION. DARPA RESEARCH PROJECT

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 Advanced Research Projects Agency).

What is the total obligated amount?

The obligated amount is $386.6 million.

What is the period of performance?

Start: 2020-09-25. End: 2026-07-31.

What is Lockheed Martin's track record with sole-source R&D contracts from DARPA?

Lockheed Martin Corporation has a long history of engaging with DARPA on various research and development initiatives. While specific data on their sole-source R&D contracts with DARPA is not readily available in the public domain, the company is a major defense contractor with extensive experience in complex, high-technology projects. Their track record generally indicates a capacity to deliver on challenging R&D requirements. However, the absence of competition in sole-source awards necessitates a thorough review of their past performance on similar contracts to ensure value and adherence to timelines and budgets.

How does the $386.6 million value compare to similar DARPA R&D contracts?

The $386.6 million value for this five-year R&D contract is substantial, placing it among significant investments made by DARPA. DARPA typically funds high-risk, high-reward research projects, and contract values can vary widely depending on the scope and duration. While specific comparable contracts are not detailed here, DARPA's annual budget for research, development, testing, and evaluation (RDT&E) runs into billions of dollars. Contracts in the hundreds of millions are not uncommon for major, multi-year programs aimed at developing transformative technologies. The 'not competed' status, however, makes direct value-for-money comparisons challenging without access to detailed cost breakdowns and alternative proposals.

What are the primary risks associated with this sole-source, cost-plus-fixed-fee contract?

The primary risks associated with this sole-source, cost-plus-fixed-fee (CPFF) contract are related to cost control and the lack of competitive pressure. As a sole-source award, the government may not have achieved the most favorable pricing. The CPFF structure means that Lockheed Martin is reimbursed for allowable costs plus a fixed fee representing profit. If the estimated costs are inaccurate or if project complexities lead to cost overruns, the total expenditure could exceed the initial $386.6 million estimate, especially if contract modifications are required. Effective oversight and rigorous cost tracking are crucial to mitigate these risks.

What is the expected program effectiveness given the contract details?

The expected program effectiveness hinges on DARPA's strategic objectives for this R&D effort and Lockheed Martin's execution capabilities. The contract's broad scope across physical, engineering, and life sciences suggests an aim to foster innovation in multiple critical areas. Program effectiveness will be measured by the successful development of new technologies or scientific understanding that align with DARPA's mission to prevent technological surprise for U.S. national security. Key performance indicators would likely include milestone achievements, technical breakthroughs, and the potential for transitioning developed technologies to operational use. The long duration indicates a focus on foundational research with potentially transformative, albeit long-term, outcomes.

How does historical spending on similar R&D contracts inform the assessment of this award?

Historical spending patterns on similar R&D contracts, particularly those managed by DARPA and involving large defense contractors like Lockheed Martin, provide context. DARPA has consistently invested heavily in advanced R&D, often awarding large, sole-source contracts for highly specialized work. Analyzing past spending on contracts with similar objectives (e.g., advanced materials, AI, quantum computing) can reveal trends in cost escalation, project timelines, and success rates. While this specific award's value is significant, it aligns with DARPA's historical approach to funding ambitious research. However, a review of historical data on sole-source awards versus competitive ones would be beneficial to understand potential cost differences and ensure this contract represents a prudent use of taxpayer funds.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and 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 FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 1011 LOCKHEED WAY, PALMDALE, CA, 93599

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: $386,556,612

Exercised Options: $386,556,612

Current Obligation: $386,556,612

Subaward Activity

Number of Subawards: 28

Total Subaward Amount: $1,568,767

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline