DoD Awards $835M Fixed-Price Contract to Lockheed Martin for Miscellaneous Weapons, Supporting Destroyer Programs
Contract Overview
Contract Amount: $878,984,353 ($879.0M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 1997-07-11
End Date: 2009-06-30
Contract Duration: 4,372 days
Daily Burn Rate: $201.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: 199710!1700!8976!BZ005!NAVAL SEA SYSTEMS COMMAND !N0002497C5178 !A!*!* !19970711!20050201!834951691!834951691!834951691!N!02769!LOCKHEED MARTIN CORPORATION !6801 ROCKLEDGE DR !BETHESDA !MD!20817!47850!005!34!MOORESTOWN !BURLINGTON !NEW JERSEY!0001!+000011125000!N!N!000000000000!1095!MISCELLANEOUS WEAPONS !A3 !SHIPS !2SCY!DESTROYER DDG-51 !3812!1!*!*!*!B!A!*!D !N!L!1!001!N!1G!A!N!A!* !* !N!C!*!Z!Z!A!A!A!*!* !*!N!A!B!N!*!*!*!*!*!
Place of Performance
Location: MOORESTOWN, BURLINGTON County, NEW JERSEY, 08057
Plain-Language Summary
Department of Defense obligated $879.0 million to LOCKHEED MARTIN CORPORATION for work described as: 199710!1700!8976!BZ005!NAVAL SEA SYSTEMS COMMAND !N0002497C5178 !A!*!* !19970711!20050201!834951691!834951691!834951691!N!02769!LOCKHEED MARTIN CORPORATION !6801 ROCKLEDGE DR !BETHESDA !MD!20817!47850!005!34!MOORESTOWN !BURLIN… Key points: 1. Significant contract value of $835 million awarded to a major defense contractor. 2. Sole-source award raises questions about competition and potential price discovery. 3. Contract duration of over 12 years suggests long-term program commitment. 4. Focus on Destroyer DDG-51 program indicates strategic naval modernization efforts.
Value Assessment
Rating: questionable
The contract value of $835 million for miscellaneous weapons over a 12-year period is substantial. Benchmarking against similar, competitively awarded contracts for weapon systems would be necessary to assess its value, especially given the sole-source nature.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This was a sole-source award, meaning competition was not sought. This limits price discovery and may result in higher costs for taxpayers compared to a competitive process.
Taxpayer Impact: The lack of competition in this large contract could lead to higher expenditures than necessary, impacting taxpayer funds.
Public Impact
Supports the Arleigh Burke-class (DDG-51) destroyer program, a cornerstone of US naval power. Involves advanced weapon systems, contributing to national defense capabilities. Long-term contract provides stability for the contractor and the supply chain.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition.
- Long contract duration may obscure current market pricing.
- Potential for cost overruns in fixed-price incentive contracts.
Positive Signals
- Supports critical naval shipbuilding program.
- Award to established defense contractor with proven capabilities.
- Long-term commitment ensures program continuity.
Sector Analysis
This contract falls within the Defense sector, specifically related to naval shipbuilding and weapon systems. Spending in this area is often characterized by long procurement cycles and high R&D costs, with major contractors like Lockheed Martin dominating.
Small Business Impact
The data does not indicate any specific provisions or subcontracting goals for small businesses within this contract. Large sole-source awards often have limited direct impact on small business participation.
Oversight & Accountability
The contract was awarded by the Naval Sea Systems Command, part of the Department of Defense. Oversight would typically involve contract management by the Defense Contract Management Agency to ensure performance and compliance.
Related Government Programs
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition
- Potential for cost overruns
- Long contract duration
- Vague contract description ('Miscellaneous Weapons')
Tags
department-of-defense, nj, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $879.0 million to LOCKHEED MARTIN CORPORATION. 199710!1700!8976!BZ005!NAVAL SEA SYSTEMS COMMAND !N0002497C5178 !A!*!* !19970711!20050201!834951691!834951691!834951691!N!02769!LOCKHEED MARTIN CORPORATION !6801 ROCKLEDGE DR !BETHESDA !MD!20817!47850!005!34!MOORESTOWN !BURLINGTON !NEW JERSEY!0001!+000011125000!N!N!000000000000!1095!MISCELLANEOUS WEAPONS !A3 !SHIPS !2SCY!DESTROYER DDG-51 !3812!1!*!*!*!B!A!*!D !N!L!1!0
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 $879.0 million.
What is the period of performance?
Start: 1997-07-11. End: 2009-06-30.
What specific 'miscellaneous weapons' are included in this contract, and how do their costs compare to similar systems procured competitively?
The contract specifies 'MISCELLANEOUS WEAPONS' under PSC 1095. Without a detailed breakdown of the specific weapon systems procured, it is difficult to perform a precise cost comparison. However, given the sole-source nature and the long duration, there is a risk that the pricing may not reflect current market efficiencies achievable through competitive bidding.
What are the key performance metrics and risk mitigation strategies for this fixed-price incentive contract, especially concerning potential cost overruns?
Fixed-price incentive contracts aim to share risk between the government and contractor. Key metrics would involve delivery schedules and performance specifications for the weapons. Risk mitigation strategies should include clear target costs, ceiling prices, and incentive formulas that penalize cost overruns while rewarding efficiency. The long duration necessitates robust oversight to manage evolving risks.
How does the $835 million award for 'miscellaneous weapons' contribute to the overall modernization and operational readiness of the DDG-51 class destroyers?
This contract is crucial for equipping and maintaining the DDG-51 class destroyers, which are a vital component of the US Navy's fleet. The 'miscellaneous weapons' likely encompass a range of essential armaments and related systems necessary for the destroyers' combat effectiveness, directly impacting their operational readiness and modernization capabilities.
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: 199 BORTON LANDING RD, MOORESTOWN, NJ, 08057
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 1997-07-11
Current End Date: 2009-06-30
Potential End Date: 2009-06-30 00:00:00
Last Modified: 2021-07-29
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