DoD's $83.5M contract for Trident II missile repair awarded to Lockheed Martin raises competition concerns

Contract Overview

Contract Amount: $87,689,815 ($87.7M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2003-12-16

End Date: 2008-11-08

Contract Duration: 1,789 days

Daily Burn Rate: $49.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: 200406!00A035!1700!XSP01 !STRATEGIC SYSTEMS PROGRAMS !N0003004C0014 !A!N! !Y! ! !20031216!20070630!075796037!075796037!834951691!N!LOCKHEED MARTIN CORPORATION !55 CHARLES LINDBERG BOULEV!MITCHELL FIELD !NY!11553!47768!101!36!MITCHELLSVILLE !STEUBEN !NEW YORK !+000027589018!N!N!000000000000!J019!MAINT & REPAIR OF EQ/SHIPS-SML CRAFT-DOCKS !A2 !MISSILE AND SPACE SYSTEMS !178 !TRIDENT II MISSILE !541330!E! !3! ! ! ! ! !99990909!B! ! !A! !D!N!V!1!001!N!1A!A!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: UNIONDALE, NASSAU County, NEW YORK, 11553

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $87.7 million to LOCKHEED MARTIN CORPORATION for work described as: 200406!00A035!1700!XSP01 !STRATEGIC SYSTEMS PROGRAMS !N0003004C0014 !A!N! !Y! ! !20031216!20070630!075796037!075796037!834951691!N!LOCKHEED MARTIN CORPORATION !55 CHARLES LINDBERG BOULEV!MITCHELL FIELD !NY!11553!47768!101!36!MITCHELLSVILLE !STEU… Key points: 1. The contract value of $83.5 million for maintenance and repair of missile systems is significant. 2. Lockheed Martin, a major defense contractor, is the sole awardee, limiting competition. 3. The 'NOT COMPETED' award type presents a risk of potentially inflated pricing and reduced innovation. 4. This falls within the Defense sector, specifically missile and space systems.

Value Assessment

Rating: questionable

The contract value of $83.5 million for 178 months of service appears high, especially given the lack of competition. Benchmarking against similar sole-source contracts for specialized missile system maintenance is difficult but suggests potential overpayment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was awarded on a sole-source basis ('NOT COMPETED'), indicating a lack of competitive bidding. This significantly limits price discovery and may lead to higher costs for taxpayers.

Taxpayer Impact: The absence of competition likely results in higher costs for taxpayers compared to a competitively bid contract.

Public Impact

Taxpayers may be overpaying for critical missile system maintenance due to the lack of competition. The sole-source award to Lockheed Martin reinforces the dominance of a single large contractor in a key defense area. Lack of transparency in pricing due to non-competitive award hinders public trust in defense spending. The long duration of the contract (178 months) suggests a long-term reliance on this specific provider without exploring alternatives.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of price competition
High contract value
Long contract duration

Positive Signals

Award to established contractor
Supports critical defense systems

Sector Analysis

This contract falls under the Defense sector, specifically for the maintenance and repair of missile and space systems. Spending in this area is critical for national security but often involves specialized, high-cost components and limited contractor pools.

Small Business Impact

The awardee is Lockheed Martin Corporation, a large prime contractor. There is no indication of subcontracting opportunities for small businesses in the provided data, suggesting limited small business involvement.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure fair pricing and performance. The Department of Defense should provide justification for the lack of competition and demonstrate efforts to ensure value for money.

Related Government Programs

Engineering Services
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Sole-source award limits competition and price discovery.
Potential for overpayment due to lack of competitive pressure.
Long contract duration may indicate a lack of market research or alternative solutions.
Lack of transparency regarding justification for sole-source award.
High contract value warrants scrutiny of pricing and performance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $87.7 million to LOCKHEED MARTIN CORPORATION. 200406!00A035!1700!XSP01 !STRATEGIC SYSTEMS PROGRAMS !N0003004C0014 !A!N! !Y! ! !20031216!20070630!075796037!075796037!834951691!N!LOCKHEED MARTIN CORPORATION !55 CHARLES LINDBERG BOULEV!MITCHELL FIELD !NY!11553!47768!101!36!MITCHELLSVILLE !STEUBEN !NEW YORK !+000027589018!N!N!000000000000!J019!MAINT & REPAIR OF EQ/SHIPS-SML CRAFT-DOCKS !A2 !MISSILE AND SPACE SYSTEMS !178 !TRIDENT II MISSILE !541330!E! !3! ! ! ! ! !999

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 $87.7 million.

What is the period of performance?

Start: 2003-12-16. End: 2008-11-08.

What is the justification for awarding this contract on a sole-source basis, and were alternative sources considered?

The provided data indicates the contract was 'NOT COMPETED.' A thorough review would require access to the contract file to understand the specific justifications, such as unique capabilities, urgent requirements, or lack of viable alternatives. Without this information, it's difficult to assess if taxpayer funds are being used efficiently.

How does the pricing structure (Cost Plus Incentive Fee) compare to industry benchmarks for similar sole-source missile system maintenance contracts?

Cost Plus Incentive Fee (CPIF) contracts aim to incentivize contractor efficiency. However, without specific performance metrics and profit/fee targets, benchmarking is challenging. Given the sole-source nature, it's crucial to scrutinize the baseline cost estimates and incentive structures to ensure they prevent excessive profit and encourage cost control.

What is the long-term strategy for maintaining the Trident II missile system, and does this contract align with it?

The contract duration of 178 months (over 14 years) suggests a long-term commitment. Understanding the overall sustainment strategy for the Trident II system is vital. This includes assessing whether this sole-source approach is a temporary necessity or a permanent fixture, and if it hinders future opportunities for more competitive or innovative solutions.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 55 CHARLES LINDBERG BOULEV, MITCHELL FIELD, NY, 11553

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $87,195,964

Exercised Options: $87,195,964

Current Obligation: $87,689,815

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline