DoD awards $105M to Lockheed Martin for MK 41 VLS design services, with no competition
Contract Overview
Contract Amount: $104,840,966 ($104.8M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2010-02-01
End Date: 2014-09-30
Contract Duration: 1,702 days
Daily Burn Rate: $61.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: MK 41 VLS DESIGN AGENT SERVICES FOR FMS COUNTRIES
Place of Performance
Location: MIDDLE RIVER, BALTIMORE County, MARYLAND, 21220
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $104.8 million to LOCKHEED MARTIN CORPORATION for work described as: MK 41 VLS DESIGN AGENT SERVICES FOR FMS COUNTRIES Key points: 1. High contract value for specialized engineering services. 2. Sole-source award to a major defense contractor. 3. Potential for cost overruns due to Cost Plus Fixed Fee structure. 4. Services support Foreign Military Sales, impacting international defense cooperation.
Value Assessment
Rating: questionable
The contract value of $104.8M for engineering services over approximately 4 years is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to market rates for similar design agent services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and may result in higher costs for the government and FMS countries.
Taxpayer Impact: The lack of competition raises concerns about the efficient use of taxpayer funds, as a potentially lower price may not have been achieved.
Public Impact
Impacts international allies relying on U.S. defense technology. Ensures continued support for critical naval defense systems. Potential for technology transfer implications with FMS countries.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price discovery.
- Cost Plus Fixed Fee contract type can incentivize cost overruns.
- Long contract duration increases exposure to changing requirements and costs.
Positive Signals
- Provides essential design services for a key defense system.
- Supports U.S. foreign military sales and strategic alliances.
Sector Analysis
This contract falls within the Engineering Services sector, specifically supporting defense systems. Benchmarks for similar sole-source, cost-plus contracts in defense engineering are often higher due to specialized requirements and limited contractor pools.
Small Business Impact
The awardee is Lockheed Martin Corporation, a large prime contractor. There is no indication of small business participation in this specific contract data.
Oversight & Accountability
The contract was managed by the Defense Contract Management Agency, responsible for overseeing contract performance and ensuring compliance. Further oversight details are not provided.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Lack of competition
- Long contract duration
- Potential for cost overruns
Tags
engineering-services, department-of-defense, md, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $104.8 million to LOCKHEED MARTIN CORPORATION. MK 41 VLS DESIGN AGENT SERVICES FOR FMS COUNTRIES
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 $104.8 million.
What is the period of performance?
Start: 2010-02-01. End: 2014-09-30.
What was the justification for the sole-source award, and were alternative competitive strategies considered?
The provided data indicates the contract was 'NOT COMPETED'. A sole-source justification is typically required in such cases, often citing unique capabilities, urgent needs, or lack of viable alternatives. Without further documentation, it's unclear if other competitive approaches were explored or deemed unsuitable for this specific requirement.
How does the Cost Plus Fixed Fee structure impact the final cost and risk for the government?
A Cost Plus Fixed Fee (CPFF) contract covers allowable costs plus a negotiated fixed fee. While it provides the contractor with a guaranteed profit, it shifts much of the cost risk to the government. If costs escalate, the government pays more, potentially exceeding initial estimates, though the fee remains constant.
What is the long-term strategic value of these design services for the MK 41 VLS system?
The MK 41 Vertical Launching System (VLS) is a critical component for modern naval vessels. Continued design agent services ensure the system's ongoing development, maintenance, and potential upgrades, which is vital for maintaining fleet readiness and technological superiority for both U.S. and allied navies.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: GUIDED MISSLES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0002409R5393
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: 2323 EASTERN BLVD, BALTIMORE, MD, 21220
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: $104,889,255
Exercised Options: $104,889,254
Current Obligation: $104,840,966
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2010-02-01
Current End Date: 2014-09-30
Potential End Date: 2014-09-30 00:00:00
Last Modified: 2022-01-18
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