DoD's $1.98B Lockheed Martin R&D Contract: High Cost, Limited Competition, Long Duration
Contract Overview
Contract Amount: $1,977,898,247 ($2.0B)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2021-11-10
End Date: 2028-08-31
Contract Duration: 2,486 days
Daily Burn Rate: $795.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: R&D
Official Description: RESERVED
Place of Performance
Location: LITTLETON, DOUGLAS County, COLORADO, 80125
State: Colorado Government Spending
Plain-Language Summary
Department of Defense obligated $1.98 billion to LOCKHEED MARTIN CORP for work described as: RESERVED Key points: 1. Significant investment in advanced R&D for the Navy. 2. Sole reliance on Lockheed Martin raises competition concerns. 3. Long contract duration (2028) may indicate complex, evolving needs. 4. High potential for cost overruns given the CPIF contract type.
Value Assessment
Rating: questionable
The contract's value of $1.98 billion is substantial for R&D. Without comparable contracts or detailed cost breakdowns, assessing its value is difficult. The Cost Plus Incentive Fee (CPIF) structure suggests potential for cost growth, making value assessment challenging.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there is no competitive pressure to drive down prices.
Taxpayer Impact: The lack of competition on a nearly $2 billion contract means taxpayers may be paying a premium for the research and development services.
Public Impact
Advanced research and development for national security needs. Potential for technological advancements impacting defense capabilities. Significant taxpayer investment in a single contractor.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Long contract duration
- High total value
Positive Signals
- Supports critical R&D for the Navy
- Potential for technological innovation
Sector Analysis
This contract falls under Research and Development in Physical, Engineering, and Life Sciences. Federal R&D spending is crucial for innovation but requires careful oversight to ensure value for money, especially with sole-source awards.
Small Business Impact
This contract does not appear to involve small business participation, as indicated by the 'sb' field being false. Large sole-source contracts often bypass small businesses unless specifically subcontracted.
Oversight & Accountability
The sole-source nature of this large contract warrants close oversight to ensure cost controls and performance metrics are rigorously monitored by the Department of the Navy.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits competition and price discovery.
- Cost Plus Incentive Fee (CPIF) structure can lead to cost overruns.
- Long contract duration (over 6 years) increases exposure to changing requirements and market conditions.
- High total contract value ($1.98B) represents significant taxpayer investment.
- Lack of small business participation noted.
Tags
research-and-development-in-the-physical, department-of-defense, co, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.98 billion to LOCKHEED MARTIN CORP. RESERVED
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 $1.98 billion.
What is the period of performance?
Start: 2021-11-10. End: 2028-08-31.
What specific technological advancements are expected from this $1.98 billion R&D investment, and how will their success be measured?
The contract details the NAICS code 541715, indicating research in physical, engineering, and life sciences. Specific advancements are not detailed in the provided data, but success metrics would typically be tied to milestones, prototypes, or performance improvements outlined in the contract's statement of work. The CPIF structure suggests incentives for meeting or exceeding targets.
Given the sole-source award and CPIF structure, what mechanisms are in place to mitigate the risk of cost overruns and ensure fair pricing?
The CPIF contract type includes incentive fees tied to performance targets, aiming to align contractor and government interests. However, sole-source awards inherently limit competitive pressure. Robust government oversight, detailed cost audits, and clear performance benchmarks are critical to mitigate overrun risks and ensure fair pricing in such arrangements.
How does this contract contribute to the Department of the Navy's long-term strategic goals, and what is the projected return on investment?
This contract supports the Department of the Navy's R&D objectives, likely focusing on enhancing future defense capabilities. The long duration suggests alignment with strategic modernization plans. Quantifying ROI for R&D is complex, often measured by the eventual operational effectiveness and strategic advantage gained from the developed technologies, rather than direct financial returns.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0003022R1025
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Address: 12257 S WADSWORTH BLVD, LITTLETON, CO, 80125
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $4,266,196,243
Exercised Options: $3,371,620,811
Current Obligation: $1,977,898,247
Actual Outlays: $45,955,445
Subaward Activity
Number of Subawards: 673
Total Subaward Amount: $984,644,509
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2021-11-10
Current End Date: 2028-08-31
Potential End Date: 2028-08-31 00:00:00
Last Modified: 2025-12-19
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