DoD Awards $159M for MK 41 VLS Electrical Design Services to Lockheed Martin
Contract Overview
Contract Amount: $159,093,812 ($159.1M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2014-05-05
End Date: 2021-10-21
Contract Duration: 2,726 days
Daily Burn Rate: $58.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: BASIC CONTRACT AWARD FOR MK 41 VLS ELECTRICAL DESIGN AGENT ENGINEERING AND TECHNICAL SERVICES. BASIC AWARD FUNDS FY10 SCN, FY11 SCN, FY12 SCN, FY13 SCN, FY14 OPN, FY14 RDT&E, AND FY14 FMS SLINS.
Place of Performance
Location: MOORESTOWN, BURLINGTON County, NEW JERSEY, 08057
Plain-Language Summary
Department of Defense obligated $159.1 million to LOCKHEED MARTIN CORPORATION for work described as: BASIC CONTRACT AWARD FOR MK 41 VLS ELECTRICAL DESIGN AGENT ENGINEERING AND TECHNICAL SERVICES. BASIC AWARD FUNDS FY10 SCN, FY11 SCN, FY12 SCN, FY13 SCN, FY14 OPN, FY14 RDT&E, AND FY14 FMS SLINS. Key points: 1. Awarded to a single, large defense contractor, indicating potential lack of competition. 2. Services span multiple fiscal years (FY10-FY14) and funding types, suggesting long-term program needs. 3. Engineering services for a critical defense system (MK 41 VLS) highlight strategic importance. 4. The contract's duration of over 7 years implies significant project scope and complexity.
Value Assessment
Rating: questionable
The contract is a Cost Plus Fixed Fee type, which can lead to cost overruns if not managed carefully. Benchmarking against similar engineering services contracts for complex defense systems is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, suggesting a sole-source award. This limits price discovery and may result in higher costs for taxpayers compared to a competitive process.
Taxpayer Impact: The lack of competition for a significant contract value raises concerns about potential overspending of taxpayer funds.
Public Impact
Ensures continued development and support for the MK 41 Vertical Launching System, a key naval weapon platform. Supports advanced engineering and technical services critical for maintaining and upgrading naval defense capabilities. The award impacts the defense industrial base, particularly in New Jersey where Lockheed Martin has a presence.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus contract type
- Long contract duration
Positive Signals
- Supports critical defense infrastructure
- Long-term program support
Sector Analysis
This contract falls within the Engineering Services sector, specifically supporting defense systems. Spending benchmarks for specialized engineering services on complex platforms like the MK 41 VLS are highly variable and depend on the specific technical requirements.
Small Business Impact
The awardee is Lockheed Martin Corporation, a large prime contractor. There is no indication of subcontracting opportunities for small businesses within the provided data, which is common for sole-source awards of this nature.
Oversight & Accountability
The Department of Defense, through the Defense Contract Management Agency, is responsible for overseeing this contract. The long duration and cost-plus nature necessitate robust oversight to ensure cost control and performance.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competitive bidding
- Potential for cost overruns due to CPFF structure
- Long contract duration may obscure performance issues
- Limited transparency on specific technical requirements and deliverables
Tags
engineering-services, department-of-defense, nj, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $159.1 million to LOCKHEED MARTIN CORPORATION. BASIC CONTRACT AWARD FOR MK 41 VLS ELECTRICAL DESIGN AGENT ENGINEERING AND TECHNICAL SERVICES. BASIC AWARD FUNDS FY10 SCN, FY11 SCN, FY12 SCN, FY13 SCN, FY14 OPN, FY14 RDT&E, AND FY14 FMS SLINS.
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 $159.1 million.
What is the period of performance?
Start: 2014-05-05. End: 2021-10-21.
What was the justification for awarding this contract on a sole-source basis instead of through full and open competition?
The justification for a sole-source award typically involves factors such as unique capabilities, proprietary technology, or urgent and compelling needs where only one source can reasonably fulfill the requirement. Without specific documentation, it's difficult to ascertain the precise reason, but it likely relates to Lockheed Martin's established role and expertise with the MK 41 VLS.
What are the potential risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this extensive engineering effort?
The primary risk of a CPFF contract is that the contractor may not be sufficiently incentivized to control costs, as the government agrees to cover all allowable costs plus a fixed fee. This can lead to cost overruns if the contractor's estimated costs are inaccurate or if scope creep occurs without adequate adjustments to the fixed fee.
How will the effectiveness of these engineering services be measured to ensure they meet the needs of the MK 41 VLS program?
Effectiveness is typically measured through performance metrics outlined in the contract, such as meeting technical specifications, adhering to delivery schedules, and achieving program milestones. The Defense Contract Management Agency (DCMA) would monitor progress and contractor performance against these defined objectives.
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: N0002412R5317
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 199 BORTON LANDING RD, MOORESTOWN, NJ, 08057
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: $182,067,479
Exercised Options: $165,633,731
Current Obligation: $159,093,812
Actual Outlays: $7,110,330
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2014-05-05
Current End Date: 2021-10-21
Potential End Date: 2021-10-21 00:00:00
Last Modified: 2025-09-24
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