DoD Awards $284.5M for MK 41 VLS Launcher Production to Lockheed Martin
Contract Overview
Contract Amount: $284,513,432 ($284.5M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2014-12-12
End Date: 2023-02-28
Contract Duration: 3,000 days
Daily Burn Rate: $94.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: MK 41 VLS LAUNCHER PRODUCTION BASIC
Place of Performance
Location: MIDDLE RIVER, BALTIMORE County, MARYLAND, 21220
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $284.5 million to LOCKHEED MARTIN CORPORATION for work described as: MK 41 VLS LAUNCHER PRODUCTION BASIC Key points: 1. Significant contract value for a critical defense system. 2. Lockheed Martin is a dominant player in defense contracting. 3. Potential for cost overruns or schedule delays in long-term production. 4. Spending concentrated in the Defense sector, specifically ordnance manufacturing.
Value Assessment
Rating: good
The contract value of $284.5M over its duration appears reasonable for the production of complex defense systems like the MK 41 VLS launcher. Benchmarking against similar large-scale defense production contracts would provide further context.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. This method is expected to drive price discovery and potentially achieve better value for the government.
Taxpayer Impact: The competitive award process aims to ensure taxpayer funds are used efficiently for essential defense equipment.
Public Impact
Ensures continued production of a vital naval weapon system. Supports jobs within the defense industrial base. Contributes to national security capabilities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (approx. 8 years) increases risk of cost escalation.
- Sole reliance on one manufacturer for a critical component.
- Potential for scope creep or changes in requirements over time.
Positive Signals
- Awarded under full and open competition.
- Firm Fixed Price contract type limits cost risk for the government.
- Experienced contractor with a track record in defense production.
Sector Analysis
This contract falls within the Defense sector, specifically the manufacturing of ordnance and related accessories. Spending in this area is driven by military readiness and modernization needs, with benchmarks often tied to program of record costs and competitive bid outcomes.
Small Business Impact
The prime contractor is Lockheed Martin Corporation, a large business. There is no explicit information on small business subcontracting goals or performance within this data, which is a common area for oversight.
Oversight & Accountability
The contract is managed by the Defense Contract Management Agency (DCMA), indicating established oversight mechanisms. However, the long duration necessitates ongoing monitoring for performance, cost, and adherence to contract terms.
Related Government Programs
- Small Arms, Ordnance, and Ordnance Accessories Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Long contract duration increases risk of cost escalation and requirement changes.
- Potential for supply chain vulnerabilities impacting production.
- Lack of explicit small business subcontracting information.
- Dependence on a single prime contractor for a critical system.
Tags
small-arms-ordnance-and-ordnance-accesso, department-of-defense, md, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $284.5 million to LOCKHEED MARTIN CORPORATION. MK 41 VLS LAUNCHER PRODUCTION BASIC
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 $284.5 million.
What is the period of performance?
Start: 2014-12-12. End: 2023-02-28.
What is the historical cost performance of the MK 41 VLS launcher program, and how does this contract's pricing compare?
Historical cost performance data for the MK 41 VLS launcher program is crucial for assessing the value of this $284.5M contract. Without specific historical cost trends, it's difficult to definitively state if this award represents optimal value. Benchmarking against similar production runs or previous contract awards for the same system, adjusted for inflation and scope changes, would provide a clearer picture of cost-effectiveness and potential savings or overruns.
What are the specific risks associated with a long-term production contract for a critical defense system like the MK 41 VLS launcher?
Long-term production contracts for critical defense systems carry inherent risks including potential obsolescence of technology, changes in military requirements, supply chain disruptions, and contractor performance degradation over time. Inflationary pressures can also erode the value of fixed-price agreements. Robust oversight, clear performance metrics, and contingency planning for unforeseen events are essential to mitigate these risks and ensure the government receives the intended capabilities.
How effectively does the full and open competition process ensure the best value for taxpayer dollars in the procurement of complex defense hardware?
Full and open competition is designed to maximize the number of potential bidders, fostering a competitive environment that theoretically drives down prices and encourages innovation, thereby securing the best value for taxpayers. However, for highly specialized defense systems like the MK 41 VLS launcher, the number of capable bidders may be limited. The effectiveness hinges on the clarity of the solicitation, the evaluation criteria, and the government's ability to assess technical merit alongside price.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms, Ordnance, and Ordnance Accessories Manufacturing
Product/Service Code: GUIDED MISSLES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N0002413R5332
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp
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: $360,961,524
Exercised Options: $284,513,432
Current Obligation: $284,513,432
Subaward Activity
Number of Subawards: 356
Total Subaward Amount: $1,523,682,649
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2014-12-12
Current End Date: 2023-02-28
Potential End Date: 2023-02-28 00:00:00
Last Modified: 2022-10-11
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