DoD Awards $550M for MK 41 VLS Modules to Lockheed Martin, Full and Open Competition
Contract Overview
Contract Amount: $550,055,006 ($550.1M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2020-02-13
End Date: 2026-07-31
Contract Duration: 2,360 days
Daily Burn Rate: $233.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: MK 41 MOD 36 VLS MODULE MECH
Place of Performance
Location: MIDDLE RIVER, BALTIMORE County, MARYLAND, 21220
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $550.1 million to LOCKHEED MARTIN CORPORATION for work described as: MK 41 MOD 36 VLS MODULE MECH Key points: 1. Significant contract value for critical defense hardware. 2. Lockheed Martin is a major defense contractor, indicating established capabilities. 3. Risk of cost overruns or schedule delays in complex defense procurement. 4. Spending concentrated in the Defense sector, specifically missile systems.
Value Assessment
Rating: good
The contract value of $550M for MK 41 VLS Modules appears reasonable given the complexity and strategic importance of the system. Benchmarking against similar large-scale defense procurements would provide further context, but the firm fixed-price structure offers some cost control.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is a positive sign for price discovery and achieving competitive pricing. This method allows multiple qualified vendors to bid, potentially leading to better value for the government.
Taxpayer Impact: Full and open competition is expected to yield a fair price, maximizing taxpayer value for this essential defense procurement.
Public Impact
Ensures continued operational capability for U.S. Navy guided missile systems. Supports advanced missile launch capabilities crucial for national security. Contributes to the defense industrial base and associated jobs.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for supply chain disruptions impacting delivery.
- Long contract duration increases exposure to economic fluctuations.
- Reliance on a single manufacturer for critical components.
Positive Signals
- Firm fixed-price contract limits cost escalation.
- Full and open competition promotes competitive pricing.
- Awarded to a reputable and experienced defense contractor.
Sector Analysis
This spending falls within the Defense sector, specifically for naval weapon systems. The value is substantial, reflecting the high cost of advanced military hardware and the critical nature of the MK 41 Vertical Launching System (VLS) for fleet readiness.
Small Business Impact
The contract was awarded to Lockheed Martin Corporation, a large prime contractor. There is no explicit indication of small business subcontracting in the provided data, which warrants further investigation to ensure small business participation.
Oversight & Accountability
The Department of the Navy is responsible for oversight. The firm fixed-price contract and full and open competition provide a framework for accountability, but ongoing monitoring of performance and adherence to specifications is crucial.
Related Government Programs
- Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Long contract duration increases exposure to market volatility.
- Potential for sole-source reliance on specific sub-component manufacturers.
- Complexity of integrated systems may lead to unforeseen technical challenges.
- Geopolitical factors could impact material availability and cost.
Tags
guided-missile-and-space-vehicle-propuls, department-of-defense, md, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $550.1 million to LOCKHEED MARTIN CORPORATION. MK 41 MOD 36 VLS MODULE MECH
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $550.1 million.
What is the period of performance?
Start: 2020-02-13. End: 2026-07-31.
What is the historical cost performance of MK 41 VLS module procurements under similar contract types?
Analyzing historical cost data for previous MK 41 VLS module procurements, especially those under firm fixed-price agreements and full and open competition, would provide a valuable benchmark. This comparison can reveal trends in cost efficiency, identify potential areas for savings, and assess the government's ability to secure favorable pricing over time.
What are the specific risks associated with the supply chain for the components required for these VLS modules?
The supply chain risks for VLS module components could include reliance on single-source suppliers for specialized materials, geopolitical instability affecting raw material availability, and potential disruptions due to natural disasters or global health crises. A thorough risk assessment should identify critical path components and alternative sourcing strategies to mitigate potential delays and cost increases.
How effectively does the firm fixed-price structure mitigate cost overruns given the long duration of this contract?
A firm fixed-price contract is designed to shift cost overrun risk to the contractor. However, with a duration of 2360 days (over 6 years), the contractor faces significant exposure to inflation, material cost volatility, and potential scope creep if not managed tightly. Robust contract administration and change control processes are essential to ensure the fixed price remains effective.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing
Product/Service Code: GUIDED MISSLES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N0002418R5310
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
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: $550,055,006
Exercised Options: $550,055,006
Current Obligation: $550,055,006
Actual Outlays: $1,326,026
Subaward Activity
Number of Subawards: 834
Total Subaward Amount: $1,425,450,685
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2020-02-13
Current End Date: 2026-07-31
Potential End Date: 2026-07-31 00:00:00
Last Modified: 2025-06-18
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