DoD Awards $568M Lockheed Martin FMS Lifetime Support Contract, Not Competed
Contract Overview
Contract Amount: $568,170,292 ($568.2M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2020-12-30
End Date: 2026-12-29
Contract Duration: 2,190 days
Daily Burn Rate: $259.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: AWARD OF FMS LIFETIME SUPPORT CONTRACT FOLLOW-ON
Place of Performance
Location: MOORESTOWN, BURLINGTON County, NEW JERSEY, 08057
Plain-Language Summary
Department of Defense obligated $568.2 million to LOCKHEED MARTIN CORPORATION for work described as: AWARD OF FMS LIFETIME SUPPORT CONTRACT FOLLOW-ON Key points: 1. Significant sole-source award to Lockheed Martin for critical FMS lifetime support. 2. Lack of competition raises concerns about potential overpricing and reduced value. 3. Long-term contract duration (6 years) and cost-plus structure increase financial risk. 4. The award falls within the Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing sector.
Value Assessment
Rating: questionable
The contract's cost-plus fixed fee structure, combined with a lack of competition, makes a direct pricing assessment difficult. Benchmarking against similar sole-source contracts for lifetime support is crucial to determine if the $568M price is reasonable.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Lockheed Martin. This limits price discovery and potentially leads to higher costs for taxpayers as competitive pressures are absent.
Taxpayer Impact: The absence of competition for a contract of this magnitude means taxpayers may be paying a premium for the FMS lifetime support services.
Public Impact
Impacts national security by providing essential support for foreign military sales. Potential for increased costs to allied nations receiving FMS support. Highlights reliance on a single contractor for critical defense systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus contract type
- Long contract duration
- Sole-source award
Positive Signals
- Essential support for FMS
- Established contractor relationship
Sector Analysis
This award is within the "Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing" sector. Spending in this area is critical for defense capabilities, but often involves complex, specialized systems where competition can be challenging.
Small Business Impact
The data indicates this contract was not awarded to small businesses (sb: false). There is no indication of subcontracting opportunities for small businesses within this award.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and effective performance. The Department of the Navy should actively monitor costs and deliverables throughout the contract's life.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition may lead to inflated prices.
- Cost-plus contract type can incentivize higher spending.
- Long contract duration increases exposure to cost overruns.
- Sole-source award limits market-driven efficiencies.
- Potential for vendor lock-in with Lockheed Martin.
- Limited transparency into cost drivers due to sole-source nature.
Tags
search-detection-navigation-guidance-aer, department-of-defense, nj, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $568.2 million to LOCKHEED MARTIN CORPORATION. AWARD OF FMS LIFETIME SUPPORT CONTRACT FOLLOW-ON
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 $568.2 million.
What is the period of performance?
Start: 2020-12-30. End: 2026-12-29.
What specific justification was provided for not competing this significant lifetime support contract?
The justification for not competing this contract is critical for understanding the rationale behind the sole-source award. Typically, justifications include factors like unique capabilities, urgent needs, or the unavailability of alternative sources. Without this information, it's difficult to assess if competitive alternatives were truly unavailable or if the government missed an opportunity to secure better value.
How will the government ensure cost control and value for money given the cost-plus fixed fee structure and lack of competition?
Ensuring cost control with a cost-plus fixed fee contract, especially when sole-sourced, requires robust government oversight. This includes detailed audits of contractor costs, rigorous performance monitoring, and clear incentive structures that align contractor and government interests. Regular reviews and potential renegotiations based on performance and market conditions are also vital.
What is the long-term strategic implication of awarding such a large, non-competed contract for critical system support?
The long-term strategic implication involves potential over-reliance on a single contractor, which can stifle innovation and create vendor lock-in. It may also set a precedent for future sole-source awards in this sector. The government should consider strategies to foster competition in the future, perhaps through modularizing support services or developing alternative solutions.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0002419R5119
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
Financial Breakdown
Contract Ceiling: $750,928,997
Exercised Options: $734,940,244
Current Obligation: $568,170,292
Actual Outlays: $556,594
Subaward Activity
Number of Subawards: 404
Total Subaward Amount: $84,067,547
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2020-12-30
Current End Date: 2026-12-29
Potential End Date: 2026-12-29 00:00:00
Last Modified: 2026-01-07
More Contracts from Lockheed Martin Corporation
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Department of Defense)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Department of Defense)
- THE Purpose of This Modification IS to Award F-35A Lrip 15 Usaf Aircraft* Long Lead Funding — $30.1B (Department of Defense)
- THE Purpose of This Contract IS to Award Long Lead Funding for F-35A, F-35B, and F-35C Aircraft for U.S. Services, Non-Dod Partners, and FMS Customers — $24.5B (Department of Defense)
- Lrip 11 AAC — $12.3B (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)