DoD Awards $155M Contract to Lockheed Martin for Missile System Maintenance
Contract Overview
Contract Amount: $95,004,347 ($95.0M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2001-12-06
End Date: 2007-04-21
Contract Duration: 1,962 days
Daily Burn Rate: $48.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: 200203!00A038!1700!XSP01 !STRATEGIC SYSTEMS PROGRAMS !N0003002C0021 !A!N! !Y! !20011206!20050930!155109184!155109184!834951691!N!LOCKHEED MARTIN CORPORATION !1111 LOCKHEED WAY MARINE !SUNNYVALE !CA!94089!77000!085!06!SUNNYVALE !SANTA CLARA !CALIFORNIA!+000009442964!Y!N!000000000000!J019!MAINT & REPAIR OF EQ/SHIPS-SML CRAFT-DOCKS !A2 !MISSILE AND SPACE SYSTEMS !2CNJ!UGM-96 TRIDENT !334511!E! !3! ! ! ! ! !99990909!B! ! !A! !D!N!V!1!001!N!1A!A!Y!Z! ! !N!C!N! ! ! !A!A!A!A!* !A!B!Y! ! ! ! ! ! !0001!
Place of Performance
Location: UNIONDALE, NASSAU County, NEW YORK, 11553
State: New York Government Spending
Plain-Language Summary
Department of Defense obligated $95.0 million to LOCKHEED MARTIN CORPORATION for work described as: 200203!00A038!1700!XSP01 !STRATEGIC SYSTEMS PROGRAMS !N0003002C0021 !A!N! !Y! !20011206!20050930!155109184!155109184!834951691!N!LOCKHEED MARTIN CORPORATION !1111 LOCKHEED WAY MARINE !SUNNYVALE !CA!94089!77000!085!06!SUNNYVALE !SANTA CLARA !CALIFORNIA!+000009442964!Y!N!0000000000… Key points: 1. Contract awarded to a single, large defense contractor, raising questions about competition. 2. Significant contract value of $155 million for maintenance and repair services. 3. Focus on strategic missile systems highlights critical national defense infrastructure. 4. Long contract duration of 1962 days suggests a need for sustained support.
Value Assessment
Rating: fair
The contract value of $155,109,184 is substantial. Without specific benchmarks for similar missile system maintenance contracts, a precise value assessment is difficult. However, the cost-plus-incentive-fee structure suggests potential for cost overruns if not managed tightly.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award to Lockheed Martin. This limits price discovery and may result in higher costs compared to a competitive bidding process. The justification for sole-source is not provided.
Taxpayer Impact: Taxpayer funds are allocated without the benefit of competitive pricing, potentially leading to less efficient use of resources.
Public Impact
Ensures continued operational readiness of critical UGM-96 Trident missile systems. Supports national security by maintaining advanced defense technology. Impacts a specialized segment of the defense industrial base.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus contract type
- Long contract duration
Positive Signals
- Supports critical defense systems
- Awarded to established defense contractor
Sector Analysis
This contract falls within the Defense sector, specifically missile and space systems. Spending in this area is typically high due to the advanced technology and strategic importance of defense assets. Benchmarks are difficult without specific program data.
Small Business Impact
The contract was awarded to Lockheed Martin Corporation, a large prime contractor. There is no indication of subcontracting opportunities for small businesses within the provided data.
Oversight & Accountability
Oversight would typically be managed by the Department of Defense's contracting and program management offices. The effectiveness of oversight depends on the rigor of performance monitoring and financial controls applied to this cost-plus contract.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award
- Cost-plus contract type
- Long contract duration
- Lack of competition justification
Tags
search-detection-navigation-guidance-aer, department-of-defense, ny, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $95.0 million to LOCKHEED MARTIN CORPORATION. 200203!00A038!1700!XSP01 !STRATEGIC SYSTEMS PROGRAMS !N0003002C0021 !A!N! !Y! !20011206!20050930!155109184!155109184!834951691!N!LOCKHEED MARTIN CORPORATION !1111 LOCKHEED WAY MARINE !SUNNYVALE !CA!94089!77000!085!06!SUNNYVALE !SANTA CLARA !CALIFORNIA!+000009442964!Y!N!000000000000!J019!MAINT & REPAIR OF EQ/SHIPS-SML CRAFT-DOCKS !A2 !MISSILE AND SPACE SYSTEMS !2CNJ!UGM-96 TRIDENT !334511!E! !3! ! ! ! ! !99990909!B! ! !A! !D!N!V!1!001!N!1A!A!Y!Z! ! !N!C!N! ! ! !A!A!A!A!* !A!B!Y! ! ! ! ! ! !0001!
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 $95.0 million.
What is the period of performance?
Start: 2001-12-06. End: 2007-04-21.
What was the justification for awarding this contract on a sole-source basis?
The provided data indicates the contract was 'NOT COMPETED'. A formal justification for sole-source procurement is typically required by federal acquisition regulations. This justification would outline why only one source could meet the government's needs, such as unique capabilities, urgent requirements, or lack of market research indicating other sources.
What are the potential risks associated with a Cost Plus Incentive Fee (CPIF) contract for missile system maintenance?
CPIF contracts aim to incentivize cost savings by sharing any cost underruns or overruns between the contractor and the government. Risks include potential for the contractor to prioritize profit over optimal cost control, the complexity of establishing realistic target costs and incentive formulas, and the government's ability to effectively monitor performance and costs to ensure fair pricing.
How does the long contract duration impact the overall value and risk for the government?
A long duration (1962 days) for maintenance can provide stability and ensure continuous support for critical systems. However, it also increases the risk of cost escalation due to inflation, technological obsolescence, and potential changes in requirements. It also ties the government to a single provider for an extended period, potentially limiting flexibility.
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: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Address: 1111 LOCKHEED WAY MARINE, SUNNYVALE, CA, 94089
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2001-12-06
Current End Date: 2007-04-21
Potential End Date: 2007-04-21 00:00:00
Last Modified: 2016-07-25
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