DoD awards $188M contract for Guided Missile Systems to Lockheed Martin, highlighting sole-source procurement

Contract Overview

Contract Amount: $46,126,101 ($46.1M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2004-01-06

End Date: 2007-03-31

Contract Duration: 1,180 days

Daily Burn Rate: $39.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200503!00A018!1700!N00030!STRATEGIC SYSTEMS PROGRAMS !N0003004C0033 !A!N! !N! !P00006!20040106!20051231!188160782!834951691!834951691!N!LOCKHEED MARTIN CORPORATION !1111 LOCKHEED MARTIN WAY !SUNNYVALE !CA!94089!77000!085!06!SUNNYVALE !SANTA CLARA !CALIFORNIA!+000026628974!N!N!000000000000!1425!GUIDED MISSILE SYSTEMS, COMPLETE !A2 !MISSILE AND SPACE SYSTEMS !178 !TRIDENT II MISSILE !336414!E! !3! ! !H! ! !20200930!B! ! !A! !D!N!U!1!001!N!1A!A!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! ! !1700!N00030!0001! !

Place of Performance

Location: SUNNYVALE, SANTA CLARA County, CALIFORNIA, 94089

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $46.1 million to LOCKHEED MARTIN CORPORATION for work described as: 200503!00A018!1700!N00030!STRATEGIC SYSTEMS PROGRAMS !N0003004C0033 !A!N! !N! !P00006!20040106!20051231!188160782!834951691!834951691!N!LOCKHEED MARTIN CORPORATION !1111 LOCKHEED MARTIN WAY !SUNNYVALE !CA!94089!77000!085!06!SUNNYVALE !SANT… Key points: 1. Contract awarded on a sole-source basis, raising questions about competition and potential cost savings. 2. Significant contract value suggests a critical role in national defense infrastructure. 3. Long-term contract duration indicates a sustained need for these specialized missile systems. 4. The award to a single, established prime contractor may limit opportunities for emerging defense technology firms. 5. Performance context is tied to strategic missile programs, implying high stakes and rigorous oversight requirements.

Value Assessment

Rating: fair

The contract value of $188,160,782 for Guided Missile Systems appears substantial. Without direct comparable contracts for the exact Trident II missile system, it's difficult to benchmark pricing precisely. However, the sole-source nature of the award means that competitive pressures, which typically drive down costs, were absent. This raises concerns about whether the government achieved the best possible value for the funds expended. Further analysis would require access to detailed cost breakdowns and historical pricing for similar components or services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. The data indicates that only one bidder, Lockheed Martin Corporation, was considered. This approach is typically used when a specific capability is only available from a single source, or in cases of urgent need. The lack of competition means that the government did not benefit from the price discovery mechanisms that arise from multiple bids, potentially leading to higher costs.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without alternative offers, there's less assurance that the price reflects the lowest reasonable cost for the required goods and services.

Public Impact

The primary beneficiaries are the U.S. Navy's strategic missile programs, ensuring the operational readiness of critical defense assets. Services delivered include the complete manufacturing and support for Guided Missile Systems, specifically the Trident II missile. Geographic impact is national, supporting a key component of U.S. strategic deterrence, with manufacturing likely concentrated at Lockheed Martin facilities. Workforce implications include the employment of highly skilled engineers, technicians, and manufacturing personnel within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Lack of competition may stifle innovation by not encouraging new entrants or alternative solutions.
Long-term contract duration without clear performance metrics could lead to complacency or cost overruns.

Positive Signals

Award to a prime contractor with a proven track record in strategic missile systems ensures continuity and expertise.
Contract supports a critical national security asset, contributing to U.S. strategic deterrence.
The contract likely involves advanced manufacturing and complex integration, showcasing high-level technological capabilities.

Sector Analysis

This contract falls within the Defense sector, specifically the 'Missile and Space Systems' sub-sector. The market for strategic missile systems is highly specialized, dominated by a few large, established defense contractors. Lockheed Martin is a key player in this domain. The contract value of approximately $188 million is significant but represents a fraction of the overall defense budget allocated to strategic weapons. Comparable spending benchmarks would typically involve other major strategic weapons platforms or large-scale missile production contracts within the DoD.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false) and there is no explicit mention of subcontracting plans for small businesses. Given the specialized nature of strategic missile systems and the sole-source award to a large prime contractor like Lockheed Martin, the direct impact on the small business ecosystem is likely minimal. Opportunities for small businesses would primarily be through subcontracting tiers, which are not detailed in this data.

Oversight & Accountability

Oversight for this contract would fall under the Department of Defense, likely managed by the Strategic Systems Programs (SSP) office and administered by the Defense Contract Management Agency (DCMA). Accountability measures would include contract milestones, quality assurance checks, and financial reporting. Transparency is generally limited for sole-source defense contracts of this nature, with details often classified or restricted due to national security implications. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse.

Related Government Programs

Trident II D5 Missile Program
Strategic Systems Programs (SSP)
Ballistic Missile Defense Systems
Naval Nuclear Propulsion Program
Defense Contract Management Agency (DCMA)

Risk Flags

Sole-source procurement
Lack of competitive bidding
Potential for cost overruns
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $46.1 million to LOCKHEED MARTIN CORPORATION. 200503!00A018!1700!N00030!STRATEGIC SYSTEMS PROGRAMS !N0003004C0033 !A!N! !N! !P00006!20040106!20051231!188160782!834951691!834951691!N!LOCKHEED MARTIN CORPORATION !1111 LOCKHEED MARTIN WAY !SUNNYVALE !CA!94089!77000!085!06!SUNNYVALE !SANTA CLARA !CALIFORNIA!+000026628974!N!N!000000000000!1425!GUIDED MISSILE SYSTEMS, COMPLETE !A2 !MISSILE AND SPACE SYSTEMS !178 !TRIDENT II MISSILE !336414!E! !3! ! !H! ! !202

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 $46.1 million.

What is the period of performance?

Start: 2004-01-06. End: 2007-03-31.

What is Lockheed Martin's track record with the Trident II missile system and similar strategic weapon contracts?

Lockheed Martin has a long-standing and extensive track record with the Trident II (D5) missile system, serving as the prime contractor for its development, production, and sustainment for decades. The company is a cornerstone of the U.S. strategic nuclear triad, responsible for numerous complex defense programs. Their experience includes integrating sophisticated guidance, navigation, and control systems, as well as managing the lifecycle of highly sensitive and technologically advanced weapon platforms. This deep historical involvement suggests a high level of expertise and established processes for delivering these critical capabilities to the Department of Defense, particularly the Navy's Strategic Systems Programs (SSP).

How does the $188 million contract value compare to historical spending on the Trident II missile program?

The $188 million contract value represents a specific procurement action for Guided Missile Systems related to the Trident II missile. Historical spending on the Trident II program is significantly higher, encompassing research, development, procurement, and sustainment over many years. Annual budgets for the program have often reached hundreds of millions, and sometimes billions, of dollars depending on the phase of the lifecycle and specific modernization efforts. This $188 million award is likely one component of a larger, ongoing sustainment or production effort, rather than the total program cost. Without specific line-item data for this particular contract's scope within the broader program, direct comparison is challenging, but it aligns with typical procurement values for major defense systems.

What are the primary risks associated with a sole-source award for strategic missile systems?

The primary risks associated with a sole-source award for strategic missile systems include potential lack of price competition, leading to higher costs for taxpayers. There's also a risk of reduced innovation, as the absence of multiple bidders may lessen the incentive for the sole provider to explore novel or more cost-effective solutions. Furthermore, over-reliance on a single contractor can create supply chain vulnerabilities and reduce negotiating leverage for the government. In critical defense systems, ensuring robust oversight and performance management becomes paramount to mitigate these risks and ensure mission success.

How effective is the current contract structure in ensuring the performance and reliability of the Trident II missile systems?

The effectiveness of the current contract structure hinges on the specific terms and conditions negotiated, which are not fully detailed in the provided data. However, contracts for strategic weapon systems like the Trident II typically involve rigorous performance specifications, quality assurance protocols, and phased delivery schedules. The 'COST PLUS FIXED FEE' (pt: COST PLUS FIXED FEE) contract type suggests that while the contractor's fee is fixed, the government bears the risk of cost overruns, necessitating close financial oversight. The long duration (dur: 1180 days) implies a sustained need and potentially a focus on long-term reliability and sustainment, which are critical for such systems.

What are the implications of the contract's end date (2007-03-31) for future strategic missile capabilities?

The contract's end date of March 31, 2007, indicates that this specific procurement action was completed over a decade ago. For future strategic missile capabilities, this implies that subsequent contracts would have been awarded to continue production, modernization, or sustainment efforts for the Trident II missile system. The defense landscape evolves, and future contracts would likely address upgrades, life extensions, or potentially the development of next-generation systems, reflecting advancements in technology and changing strategic requirements. The completion of this contract signifies a past phase of acquisition or support.

Are there any known issues or controversies related to Lockheed Martin's performance on this specific contract or similar programs?

Based on the provided data snippet, there are no explicit mentions of known issues or controversies related to Lockheed Martin's performance on this specific contract (N0003004C0033). However, large, long-term defense contracts, especially for complex systems like strategic missiles, can sometimes face scrutiny regarding cost growth, schedule delays, or technical challenges. Lockheed Martin, as a major defense contractor, is subject to ongoing oversight and performance reviews. Specific issues, if any, would typically be detailed in government audit reports, Inspector General findings, or congressional testimonies, which are beyond the scope of this summary data.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 1111 LOCKHEED MARTIN WAY, SUNNYVALE, CA, 17

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline