DoD's $775M FY17 Long Lead Material Contract Awarded to Lockheed Martin
Contract Overview
Contract Amount: $774,855,052 ($774.9M)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2016-07-14
End Date: 2024-05-31
Contract Duration: 2,878 days
Daily Burn Rate: $269.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: FY17 LONG LEAD MATERIAL
Place of Performance
Location: SUNNYVALE, SANTA CLARA County, CALIFORNIA, 94089
Plain-Language Summary
Department of Defense obligated $774.9 million to LOCKHEED MARTIN CORP for work described as: FY17 LONG LEAD MATERIAL Key points: 1. Significant investment in long lead material for guided missiles and space vehicles. 2. Sole-source award to Lockheed Martin suggests limited competition for specialized components. 3. Long contract duration (2016-2024) indicates a complex, multi-year procurement. 4. Fixed Price Incentive contract type aims to balance cost control with performance incentives.
Value Assessment
Rating: fair
The contract value of $775M for long lead material is substantial. Benchmarking is difficult without specific component details, but the fixed-price incentive structure suggests an attempt to manage costs against a baseline.
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 environment.
Taxpayer Impact: Taxpayer funds are committed to a sole-source procurement, potentially missing out on cost savings that could arise from competitive bidding.
Public Impact
Ensures availability of critical components for national defense programs. Supports advanced manufacturing capabilities within the defense industrial base. Potential for cost overruns due to lack of competition needs monitoring.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Long contract duration
- Lack of competition
Positive Signals
- Critical long lead material procurement
- Fixed Price Incentive contract type
Sector Analysis
This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a critical component of the defense industry. Spending in this area is often characterized by high R&D costs and specialized manufacturing requirements.
Small Business Impact
The data indicates this contract was awarded to Lockheed Martin Corp, a large prime contractor. There is no direct indication of small business participation in this specific award, suggesting potential for subcontracting opportunities.
Oversight & Accountability
The 'NOT COMPETED' status warrants scrutiny. Oversight should focus on the justification for the sole-source award and the mechanisms in place to ensure fair pricing and value for taxpayer money.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits competition and price discovery.
- Long contract duration increases exposure to market fluctuations and potential cost creep.
- Lack of small business participation noted in the prime award.
- High contract value requires robust oversight to ensure value for money.
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, ca, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $774.9 million to LOCKHEED MARTIN CORP. FY17 LONG LEAD MATERIAL
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 $774.9 million.
What is the period of performance?
Start: 2016-07-14. End: 2024-05-31.
What is the justification for the sole-source award of this significant long lead material contract?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the absence of other qualified sources capable of meeting the specific requirements within the necessary timeframe. For long lead material, this could be due to specialized manufacturing processes or essential components only available from a single supplier.
How will the Fixed Price Incentive (FPI) contract type mitigate potential cost risks associated with a sole-source award?
The FPI contract type establishes a target cost, target profit, and a price ceiling. It incentivizes the contractor to control costs by sharing savings below the target cost and sharing cost overruns above the target cost, up to the ceiling. This structure aims to provide cost control while allowing for flexibility in performance.
What is the expected impact of this long lead material procurement on the overall program's cost and schedule effectiveness?
Securing long lead material early is crucial for preventing downstream schedule delays and managing program costs effectively. By addressing these long-lead items upfront, the Department of Defense aims to ensure timely production of guided missiles and space vehicles, thereby enhancing program effectiveness and potentially avoiding costlier expedited measures later.
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
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0003016Q0100
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
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: $804,625,936
Exercised Options: $774,892,939
Current Obligation: $774,855,052
Actual Outlays: $7,368,113
Subaward Activity
Number of Subawards: 501
Total Subaward Amount: $1,443,157,993
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2016-07-14
Current End Date: 2024-05-31
Potential End Date: 2024-05-31 00:00:00
Last Modified: 2025-08-13
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