DoD's $44.6M Nuclear Weapons Security Contract with Lockheed Martin Raises Concerns Over Competition and Value
Contract Overview
Contract Amount: $44,651,298 ($44.7M)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2009-07-08
End Date: 2016-09-30
Contract Duration: 2,641 days
Daily Burn Rate: $16.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: PROVIDE AND INSTALL NUCLEAR WEAPONS SECURITY EQUIPMENT WITH MAINTENANCE AND TRAINING
Place of Performance
Location: SUNNYVALE, SANTA CLARA County, CALIFORNIA, 94089
Plain-Language Summary
Department of Defense obligated $44.7 million to LOCKHEED MARTIN CORP for work described as: PROVIDE AND INSTALL NUCLEAR WEAPONS SECURITY EQUIPMENT WITH MAINTENANCE AND TRAINING Key points: 1. Significant contract value of $44.6 million awarded to a single vendor. 2. Lack of competition raises questions about price discovery and potential overspending. 3. Long contract duration (2009-2016) may indicate a need for updated technology or services. 4. The 'Engineering Services' NAICS code suggests a broad scope, potentially masking specific cost drivers.
Value Assessment
Rating: questionable
The contract's cost-plus-fixed-fee structure, combined with a lack of competition, makes a direct pricing assessment difficult. Without competitive bids, it's hard to determine if the $44.6 million represents a fair market price for the nuclear weapons security equipment, maintenance, and training provided.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning there was no open competition. This significantly limits price discovery and may lead to higher costs for taxpayers as the government did not explore alternative vendors or negotiate based on competitive offers.
Taxpayer Impact: The absence of competition likely resulted in a higher overall cost to taxpayers compared to a competitively bid contract.
Public Impact
National security implications due to the sensitive nature of nuclear weapons. Potential for taxpayer funds to be used inefficiently due to lack of competition. Long-term reliance on a single contractor for critical security infrastructure.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Long contract duration
- Lack of transparency in pricing
Positive Signals
- Critical national security function
- Established contractor with relevant experience
Sector Analysis
This contract falls within the Engineering Services sector, which can encompass a wide range of specialized technical support. Given the sensitive nature of nuclear weapons security, spending in this area is critical but requires stringent oversight to ensure value and effectiveness.
Small Business Impact
The data indicates this contract was not awarded to small businesses. There is no information provided on whether small businesses were subcontracted, but the primary award went to a large corporation.
Oversight & Accountability
The sole-source nature of this contract warrants close oversight to ensure the contractor is meeting all performance requirements and that costs are reasonable. The long duration also suggests a need for periodic reviews to ensure continued necessity and value.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award lacks competition.
- Cost-plus contract type can incentivize higher spending.
- Long contract duration may indicate outdated technology or services.
- Lack of detailed justification for sole-source award.
- No clear performance metrics provided.
Tags
engineering-services, department-of-defense, ca, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $44.7 million to LOCKHEED MARTIN CORP. PROVIDE AND INSTALL NUCLEAR WEAPONS SECURITY EQUIPMENT WITH MAINTENANCE AND TRAINING
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 $44.7 million.
What is the period of performance?
Start: 2009-07-08. End: 2016-09-30.
What specific security equipment was provided and installed under this contract, and how does its cost compare to industry standards for similar systems?
The provided data does not specify the exact security equipment. However, given the $44.6 million value and the sole-source, cost-plus nature, a thorough audit would be necessary to validate the necessity and pricing of each component. Benchmarking against similar, competitively procured systems would reveal potential cost inefficiencies.
What were the justifications for awarding this contract on a sole-source basis, and were alternative competitive strategies ever considered?
The justification for a sole-source award is not detailed in the provided data. Typically, such justifications involve unique capabilities, urgent needs, or lack of market availability. Without this information, it's impossible to assess if competitive strategies were appropriately explored or if the sole-source decision was truly warranted.
How effective has the installed security equipment and ongoing maintenance been in ensuring the security of nuclear weapons, and what metrics were used to measure this effectiveness?
The effectiveness of the security equipment and maintenance is not quantifiable from the provided data. Performance metrics and success rates are crucial for such a critical contract. A review of post-award performance reports and incident logs would be necessary to assess the actual security outcomes achieved.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: INSTALLATION OF EQUIPMENT › INSTALLATION OF EQUIPMENT
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, 94089
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $44,834,471
Exercised Options: $44,834,471
Current Obligation: $44,651,298
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2009-07-08
Current End Date: 2016-09-30
Potential End Date: 2016-09-30 00:00:00
Last Modified: 2017-08-31
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