USMC Awards $435M for Launcher Missile Modules to Kongsberg Defence & Aerospace
Contract Overview
Contract Amount: $434,678,863 ($434.7M)
Contractor: Kongsberg Defence & Aerospace AS
Awarding Agency: Department of Defense
Start Date: 2024-11-12
End Date: 2031-05-13
Contract Duration: 2,373 days
Daily Burn Rate: $183.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: FY25 LAUNCHER MISSILE MODULE (LMM)- USMC
Plain-Language Summary
Department of Defense obligated $434.7 million to KONGSBERG DEFENCE & AEROSPACE AS for work described as: FY25 LAUNCHER MISSILE MODULE (LMM)- USMC Key points: 1. Significant investment in advanced missile technology for the USMC. 2. Sole-source award to Kongsberg raises questions about competition and potential cost savings. 3. Long contract duration (2031) requires ongoing oversight for value and performance. 4. Focus on navigation and guidance systems suggests critical operational capabilities.
Value Assessment
Rating: fair
The contract value of $434.7 million over approximately 6.5 years needs comparison to similar missile module procurements. Without benchmark data, assessing pricing effectiveness is challenging.
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 compared to a competitive process.
Taxpayer Impact: Taxpayers may bear a higher cost due to the lack of competition, necessitating strong justification for the sole-source approach.
Public Impact
Enhances USMC's missile capabilities, potentially improving operational effectiveness. Long-term commitment to a single provider could impact future technological advancements. Requires robust oversight to ensure taxpayer funds are used efficiently and effectively.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Long contract duration
- Potential for cost overruns
Positive Signals
- Critical defense capability enhancement
- Firm fixed price contract
Sector Analysis
This procurement falls within the defense sector, specifically focusing on advanced weapon systems. Spending benchmarks for similar complex missile modules are often high due to R&D and specialized manufacturing.
Small Business Impact
The contract data indicates no specific set-aside for small businesses. The prime contractor, Kongsberg Defence & Aerospace AS, is a large foreign entity, suggesting limited direct opportunities for U.S. small businesses on this prime contract.
Oversight & Accountability
The long duration and sole-source nature of this contract necessitate vigilant oversight from the Department of Defense to ensure performance, cost control, and adherence to contract terms.
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
- Sole-source award limits competition and price discovery.
- Long contract duration increases risk of cost escalation and technological obsolescence.
- Lack of small business participation noted.
- Potential for contractor lock-in due to specialized nature of the product.
Tags
search-detection-navigation-guidance-aer, department-of-defense, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $434.7 million to KONGSBERG DEFENCE & AEROSPACE AS. FY25 LAUNCHER MISSILE MODULE (LMM)- USMC
Who is the contractor on this award?
The obligated recipient is KONGSBERG DEFENCE & AEROSPACE AS.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $434.7 million.
What is the period of performance?
Start: 2024-11-12. End: 2031-05-13.
What is the justification for the sole-source award, and how was the price determined to be fair and reasonable without competition?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one source can meet requirements. Price reasonableness is assessed through various methods, including comparison to previous contracts, cost analysis, or market research, even without direct competition. Detailed documentation supporting these findings is crucial for accountability.
What are the specific performance metrics and key performance parameters (KPPs) for the LMM, and how will they be monitored over the contract's duration?
Performance metrics for the LMM would likely include reliability, accuracy, range, and integration capabilities with existing platforms. The contract should outline specific KPPs and objective measures for success. The Department of the Navy will monitor these through regular technical reviews, testing, and delivery assessments to ensure the system meets operational requirements throughout its lifecycle.
How does this procurement align with the USMC's long-term modernization strategy, and what are the potential risks if this technology becomes obsolete?
This procurement likely supports the USMC's modernization by providing advanced missile capabilities. Risks of obsolescence are managed through contract clauses allowing for upgrades, technology insertion, or termination if the system no longer meets strategic needs. Continuous market surveillance and engagement with the contractor are vital to mitigate this risk.
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: GUIDED MISSLES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0002423R5434
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: KIRKEGAARDSVEIEN 45, KONGSBERG
Business Categories: Category Business, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $1,181,093,793
Exercised Options: $1,000,499,387
Current Obligation: $434,678,863
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2024-11-12
Current End Date: 2031-05-13
Potential End Date: 2032-11-13 00:00:00
Last Modified: 2025-09-30
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