Navy awards $114.6M contract for Trident II missile engineering services to Lockheed Martin

Contract Overview

Contract Amount: $11,457,124 ($11.5M)

Contractor: Lockheed Martin Corp

Awarding Agency: Department of Defense

Start Date: 2006-06-09

End Date: 2008-09-30

Contract Duration: 844 days

Daily Burn Rate: $13.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200609!06A220!1700!N00030!STRATEGIC SYSTEMS PROGRAMS !N0003006C0038 !A!N! !N! ! !20060609!20070330!188160782!834951691!834951691!N!LOCKHEED MARTIN CORPORATION !1111 LOCKHEED MARTIN WAY !SUNNYVALE !CA!94089!77000!085!06!SUNNYVALE !SANTA CLARA !CALIFORNIA!+000012248326!N!N!000000000000!H914!OTHER QUALITY CNTL SVCS/GUIDED MISSILES !A2 !MISSILE AND SPACE SYSTEMS !178 !TRIDENT II MISSILE !541330!E! !1! ! ! ! ! !99990909!B! ! !N!Z!D!U!U!1!001!N!1A!A!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! !1700!N00030!0001! !

Place of Performance

Location: SUNNYVALE, SANTA CLARA County, CALIFORNIA, 94088

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $11.5 million to LOCKHEED MARTIN CORP for work described as: 200609!06A220!1700!N00030!STRATEGIC SYSTEMS PROGRAMS !N0003006C0038 !A!N! !N! ! !20060609!20070330!188160782!834951691!834951691!N!LOCKHEED MARTIN CORPORATION !1111 LOCKHEED MARTIN WAY !SUNNYVALE !CA!94089!77000!085!06!SUNNYVALE !SANT… Key points: 1. Contract awarded for critical missile system support, indicating a focus on maintaining strategic defense capabilities. 2. Sole-source award suggests potential lack of market competition or unique contractor expertise. 3. Contract duration of 844 days points to a significant, ongoing need for these specialized services. 4. The award falls under 'Other Quality Control Services/Guided Missiles,' highlighting its specific defense application. 5. This contract represents a portion of broader spending on strategic weapons systems.

Value Assessment

Rating: fair

The contract value of $114.6 million for engineering services over approximately two years appears substantial. Without direct comparable contracts for the Trident II missile system, it's difficult to benchmark the value precisely. However, given the specialized nature of strategic missile systems and the sole-source award to a prime contractor, the pricing may reflect unique capabilities and established program costs. Further analysis would require access to historical pricing data for similar services on this specific platform.

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. This typically occurs when a single contractor possesses unique capabilities, intellectual property, or is the sole provider of necessary services or technology. For strategic systems like the Trident II missile, the prime contractor often has deep institutional knowledge and existing infrastructure, making competition challenging or impractical.

Taxpayer Impact: Sole-source awards can limit opportunities for cost savings through competition, potentially leading to higher costs for taxpayers if robust price negotiation is not employed.

Public Impact

The primary beneficiary is the U.S. Navy's Strategic Systems Programs, ensuring the continued operational readiness of the Trident II missile system. Services delivered include engineering support crucial for the maintenance, sustainment, and potential upgrades of a key strategic deterrent. The geographic impact is primarily within the defense industrial base, likely involving facilities in California where Lockheed Martin is headquartered. Workforce implications include the retention of highly skilled engineers and technical personnel within Lockheed Martin's operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source nature limits competitive pressure on pricing.
Lack of competition may reduce transparency in cost justification.
Long-term reliance on a single contractor could create vendor lock-in.

Positive Signals

Award to incumbent contractor likely ensures continuity of essential services.
Specialized nature of the system necessitates deep contractor expertise.
Focus on strategic systems indicates alignment with national security priorities.

Sector Analysis

This contract falls within the Defense sector, specifically supporting strategic weapons systems. The market for such specialized engineering services is highly concentrated, dominated by large defense contractors with extensive experience and security clearances. Spending on strategic missile programs is a significant component of the overall defense budget, reflecting ongoing investment in maintaining a credible nuclear deterrent. Comparable spending benchmarks would likely be found within other major strategic weapons system sustainment contracts.

Small Business Impact

This contract does not appear to involve a small business set-aside. Given the specialized and strategic nature of the Trident II missile system, it is unlikely that small businesses would be primary awardees for such engineering services. However, Lockheed Martin, as the prime contractor, may have subcontracting opportunities for small businesses that can provide specific components or support services, though this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices, specifically within Strategic Systems Programs. Accountability measures would include performance metrics, milestone tracking, and financial reporting requirements stipulated in the contract. Transparency is generally limited for sole-source defense contracts, but audits and reviews by the Government Accountability Office (GAO) and the Department of Defense's Inspector General (IG) can provide oversight.

Related Government Programs

Trident II D5 Life Extension Program
Ballistic Missile Defense Systems
Strategic Weapons Systems Sustainment
Naval Nuclear Propulsion Program
Defense Engineering Services

Risk Flags

Sole-source award may limit price competition.
Contract duration is substantial, requiring ongoing monitoring.
Specialized nature of services could lead to vendor lock-in.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.5 million to LOCKHEED MARTIN CORP. 200609!06A220!1700!N00030!STRATEGIC SYSTEMS PROGRAMS !N0003006C0038 !A!N! !N! ! !20060609!20070330!188160782!834951691!834951691!N!LOCKHEED MARTIN CORPORATION !1111 LOCKHEED MARTIN WAY !SUNNYVALE !CA!94089!77000!085!06!SUNNYVALE !SANTA CLARA !CALIFORNIA!+000012248326!N!N!000000000000!H914!OTHER QUALITY CNTL SVCS/GUIDED MISSILES !A2 !MISSILE AND SPACE SYSTEMS !178 !TRIDENT II MISSILE !541330!E! !1! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $11.5 million.

What is the period of performance?

Start: 2006-06-09. End: 2008-09-30.

What is Lockheed Martin's track record with the Trident II missile program?

Lockheed Martin has been the prime contractor for the Trident II (D5) missile program for decades, responsible for its development, production, and sustainment. Their long-standing relationship with the Navy on this critical strategic asset indicates a deep understanding of the system's complexities, performance requirements, and lifecycle needs. This extensive history suggests a strong track record of delivering the necessary engineering, manufacturing, and logistical support. The continuity of their involvement underscores their established expertise and the Navy's reliance on their capabilities for maintaining the operational readiness of the U.S. submarine-launched ballistic missile (SLBM) fleet.

How does the $114.6 million award compare to historical spending on Trident II engineering services?

The provided data indicates a contract award of $114,571,240 for engineering services related to the Trident II missile. To compare this to historical spending, one would need access to historical contract databases and financial reports specifically for the Trident II program. Annual spending can fluctuate based on program phases, modernization efforts, and sustainment needs. Without historical data points for similar engineering service contracts over the program's lifecycle, it is challenging to determine if this specific award represents an increase, decrease, or stable level of investment. However, the duration of the contract (844 days) suggests a significant, ongoing requirement.

What are the primary risks associated with this sole-source contract?

The primary risks associated with this sole-source contract revolve around cost control and potential lack of innovation. Since the contract was not competed, there is less market pressure to drive down prices, potentially leading to higher costs for the government if robust negotiation and oversight are not diligently applied. Vendor lock-in is another significant risk; the Navy's reliance on Lockheed Martin for specialized Trident II engineering services could make it difficult and costly to switch providers in the future, even if better alternatives emerge. Furthermore, a lack of competition might reduce the incentive for the contractor to pursue innovative cost-saving measures or technological advancements beyond the scope of the current contract.

How effective is the engineering support provided by Lockheed Martin for the Trident II missile system?

The effectiveness of Lockheed Martin's engineering support for the Trident II missile system is largely inferred from the program's sustained operational status and its role as a cornerstone of U.S. strategic deterrence. The Navy has continued to rely on Lockheed Martin for decades, suggesting a high level of satisfaction with their performance in maintaining and supporting this complex weapon system. The Trident II (D5) missile has undergone several life extension programs, indicating successful engineering interventions to ensure its longevity and reliability. While specific performance metrics are not publicly available, the continued successful deployment and operation of the Trident II system serve as a strong indicator of effective engineering support.

What is the typical contract type for strategic missile system engineering services, and does this contract align?

Contracts for strategic missile system engineering services often utilize cost-reimbursement or cost-plus-fixed-fee (CPFF) structures, especially during development or sustainment phases where the scope of work can be complex and evolving. This contract is identified as 'COST PLUS FIXED FEE' (pt: COST PLUS FIXED FEE), which aligns with typical practices for such specialized and potentially uncertain engineering efforts. CPFF contracts allow the contractor to recover allowable costs plus a predetermined fixed fee, providing an incentive for efficient performance while accommodating the inherent complexities and risks associated with advanced defense systems like the Trident II missile.

Industry Classification

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

Product/Service Code: QUALITY CONTROL, TEST, INSPECTION › OTHER QUALITY, TEST, INSPECT SVCS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1111 LOCKHEED MARTIN WAY BLDG 157, SUNNYVALE, CA, 17

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline