DoD's $38M contract for UK's fleet ballistic missile program awarded to Lockheed Martin

Contract Overview

Contract Amount: $38,073,857 ($38.1M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2020-04-01

End Date: 2023-08-30

Contract Duration: 1,246 days

Daily Burn Rate: $30.6K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: UK FY21 FLEET BALLISTIC MISSILE PROGRAM

Place of Performance

Location: TITUSVILLE, BREVARD County, FLORIDA, 32780

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $38.1 million to LOCKHEED MARTIN CORPORATION for work described as: UK FY21 FLEET BALLISTIC MISSILE PROGRAM Key points: 1. Contract awarded for critical defense technology, supporting a key international alliance. 2. Sole-source award to Lockheed Martin, a major defense contractor with extensive experience. 3. Contract duration spans over three years, indicating a significant, long-term commitment. 4. Focus on engineering services suggests complex technical requirements and development. 5. Geographic location in Florida may indicate specific facility or personnel involvement. 6. Contract type is Cost Plus Fixed Fee, which can carry cost overrun risks.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging due to its specialized nature and sole-source award. The Cost Plus Fixed Fee (CPFF) structure means that costs are reimbursed, plus a fixed fee for profit. While this can be appropriate for research and development where costs are uncertain, it offers less incentive for the contractor to control costs compared to fixed-price contracts. Without comparable sole-source contracts for similar missile program engineering services, it's difficult to definitively assess if the fixed fee is reasonable or if the overall cost aligns with market expectations. The lack of competition inherently limits price discovery.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that only one contractor, Lockheed Martin Corporation, was solicited. This typically occurs when a specific capability or technology is unique to a single provider, or in situations deemed to be in the national interest. The absence of a competitive bidding process means that the government did not benefit from the price reductions and innovation that can arise from multiple companies vying for the contract. The justification for a sole-source award would need to be thoroughly documented to ensure it was appropriate.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as the government does not have the benefit of competitive pricing. This necessitates robust oversight to ensure fair pricing and value.

Public Impact

The United Kingdom benefits from the continued development and support of its fleet ballistic missile program. This contract supports critical national defense infrastructure and international security cooperation. Engineering services provided will likely involve highly skilled technical personnel. The contract's performance period impacts the long-term strategic planning of both the US Department of Defense and the UK's defense capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type may incentivize cost overruns.
Sole-source award limits price competition and potential cost savings for taxpayers.
Lack of detailed performance metrics in provided data makes outcome assessment difficult.

Positive Signals

Award to a prime contractor with extensive experience in complex defense systems.
Contract supports a critical strategic defense capability for an allied nation.
Long contract duration suggests a stable, ongoing need for these specialized services.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense applications. The defense sector is characterized by high barriers to entry, significant R&D investment, and long procurement cycles. Contracts like this are crucial for maintaining technological superiority and supporting allied defense capabilities. Comparable spending benchmarks are difficult to establish without more specific details on the scope of engineering services, but large-scale defense programs often involve multi-million dollar contracts for specialized technical support.

Small Business Impact

The provided data indicates that small business participation was not a stated factor in this contract (ss: false, sb: false). As a sole-source award to a large prime contractor, it is unlikely that small businesses were directly solicited. However, Lockheed Martin may engage small businesses as subcontractors for specific components or services, though this is not detailed in the award information. Further investigation into subcontracting plans would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contract management agencies, such as the Defense Contract Management Agency (DCMA). Given the Cost Plus Fixed Fee structure, rigorous oversight of incurred costs and the reasonableness of the fixed fee is essential. Transparency regarding the justification for the sole-source award and ongoing performance monitoring would be key accountability measures. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Ballistic Missile Defense Programs
Strategic Weapons Systems
Foreign Military Sales
Defense Engineering Services
Naval Weapons Systems

Risk Flags

Sole-source award lacks competitive pricing.
Cost Plus Fixed Fee contract type may lead to cost overruns.
Contract duration is lengthy, requiring sustained oversight.
Specialized nature of the service limits alternative providers.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.1 million to LOCKHEED MARTIN CORPORATION. UK FY21 FLEET BALLISTIC MISSILE PROGRAM

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 $38.1 million.

What is the period of performance?

Start: 2020-04-01. End: 2023-08-30.

What is Lockheed Martin's track record with similar fleet ballistic missile programs?

Lockheed Martin is a primary contractor for the US Navy's fleet ballistic missile program, including the Trident II (D5) missile system, which is integral to the UK's strategic deterrent. They have a long-standing history and extensive expertise in the design, development, production, and sustainment of these complex systems. Their involvement spans decades, encompassing upgrades, maintenance, and integration of missile components. This deep institutional knowledge and established relationship with the US Navy and, by extension, the UK Ministry of Defence, likely contributed to their selection for this sole-source contract, as they possess the unique capabilities and security clearances required for such sensitive work.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for this type of work?

The Cost Plus Fixed Fee (CPFF) contract type reimburses the contractor for allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is often used for research and development or services where the scope of work and costs are uncertain at the outset, making fixed-price contracts impractical. Compared to fixed-price contracts, CPFF offers less incentive for the contractor to control costs, as all allowable expenses are covered. However, it provides flexibility for evolving requirements. For complex, long-term defense programs like missile systems, where innovation and adaptation are key, CPFF can be appropriate, but it necessitates stringent government oversight to manage costs and ensure value for money.

What are the primary risks associated with a sole-source award for a defense program?

The primary risk of a sole-source award is the lack of price competition, which can lead to higher costs for the government and taxpayers compared to a competitively bid contract. Without multiple bidders, there is less pressure on the contractor to offer the lowest possible price. Additionally, sole-source awards can reduce innovation by limiting the market to a single provider and may create a dependency on that contractor. For critical defense programs, the justification for a sole-source award must be exceptionally strong, demonstrating that no other source can meet the requirement, to mitigate these risks and ensure national security isn't compromised by suboptimal procurement.

What is the historical spending pattern for the UK's fleet ballistic missile program, and how does this contract fit?

Historical spending data for the UK's fleet ballistic missile program is not publicly detailed in a consolidated manner, as it involves classified elements and joint funding/procurement with the US. However, it is known to be a multi-billion dollar, multi-decade program involving significant investment in missile development, maintenance, and support infrastructure. This $38 million contract represents a specific slice of that ongoing expenditure, likely covering a defined period of engineering services for sustainment, upgrades, or specific development phases. It fits within the broader pattern of continuous investment required to maintain a credible strategic deterrent, reflecting the long-term nature and high cost associated with such advanced defense capabilities.

What are the potential performance implications of awarding this contract to Lockheed Martin?

Awarding this contract to Lockheed Martin, given their extensive experience with fleet ballistic missile systems, suggests a high likelihood of successful technical performance. Their established infrastructure, specialized workforce, and deep understanding of the Trident missile system (which the UK uses) position them well to meet the program's complex engineering requirements. Potential performance risks might stem from the inherent uncertainties in long-term defense development and the CPFF contract structure, which requires diligent oversight to ensure efficiency. However, the contractor's proven track record in this specific domain generally points towards reliable execution of the contracted services.

Industry Classification

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

Product/Service Code: TECHNICAL REPRESENTATIVE SVCS. › TECHNICAL REPRESENTATIVE SERVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0003020R0023

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1102 JOHN GLENN BLVD, TITUSVILLE, FL, 32780

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

Financial Breakdown

Contract Ceiling: $38,073,857

Exercised Options: $38,073,857

Current Obligation: $38,073,857

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $31,002

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline