DoD's $170.8M contract for MK41 PBL Support awarded to Lockheed Martin Corporation

Contract Overview

Contract Amount: $17,086,447 ($17.1M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2023-11-22

End Date: 2025-05-15

Contract Duration: 540 days

Daily Burn Rate: $31.6K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MK41 PBL SUPPORT

Place of Performance

Location: MARLBOROUGH, MIDDLESEX County, MASSACHUSETTS, 01752

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $17.1 million to LOCKHEED MARTIN CORPORATION for work described as: MK41 PBL SUPPORT Key points: 1. Value-for-money assessment indicates potential concerns due to lack of competitive bidding. 2. Competition dynamics are limited, with a sole-source award suggesting restricted market engagement. 3. Risk indicators include the absence of a competitive process, potentially leading to suboptimal pricing. 4. Performance context is tied to the MK41 Platform, a critical defense system. 5. Sector positioning places this contract within the defense industrial base, specifically for naval systems support.

Value Assessment

Rating: questionable

The contract's value-for-money is difficult to assess without competitive benchmarks. Awarded on a sole-source basis, it's challenging to determine if the pricing reflects fair market value or if alternative solutions could offer better value. The firm fixed-price structure provides cost certainty but doesn't inherently guarantee optimal pricing in a non-competitive environment. Further analysis would require benchmarking against similar sole-source procurements or internal cost estimates.

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. This typically occurs when only one responsible source can provide the required goods or services. The lack of competition limits price discovery and may result in higher costs for the government compared to a fully competed procurement. The specific justification for the sole-source award would need to be reviewed for completeness.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without multiple bidders vying for the contract, there is less incentive for the contractor to offer the lowest possible price.

Public Impact

The primary beneficiaries are the Department of the Navy and potentially the broader U.S. Navy fleet relying on the MK41 Platform. Services delivered include support for the MK41 Platform, crucial for naval defense capabilities. Geographic impact is likely concentrated around naval bases and facilities where the MK41 system is deployed or maintained. Workforce implications may involve specialized technical roles within Lockheed Martin and its subcontractors supporting the platform.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
Lack of transparency in justification for sole-sourcing.
Potential for cost overruns without competitive pressure.

Positive Signals

Firm fixed-price contract provides cost certainty.
Award to an established defense contractor with known capabilities.
Support for a critical defense platform ensures operational readiness.

Sector Analysis

This contract falls within the defense sector, specifically supporting naval platform sustainment. The market for such specialized support is often concentrated among a few large defense contractors due to the technical expertise and security clearances required. Benchmarking spending in this area is challenging due to the proprietary nature of defense systems and the limited number of comparable sole-source awards.

Small Business Impact

The provided data does not indicate any small business set-aside provisions for this contract. As a sole-source award to a large prime contractor, the opportunities for small businesses would likely be through subcontracting. The extent to which Lockheed Martin will engage small businesses in fulfilling this contract is not specified and would require further investigation into their subcontracting plan.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm fixed-price structure, which shifts cost risk to the contractor. Transparency is limited by the sole-source nature of the award; however, contract modifications and performance reports would be subject to review. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

MK41 Vertical Launching System (VLS) Support
Naval Weapon Systems Sustainment
Defense Logistics Agency (DLA) Support Contracts
Department of Defense Platform Maintenance

Risk Flags

Sole-source award raises concerns about price competition.
Lack of transparency regarding justification for sole-sourcing.
Potential for contractor lock-in due to specialized nature of support.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.1 million to LOCKHEED MARTIN CORPORATION. MK41 PBL SUPPORT

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $17.1 million.

What is the period of performance?

Start: 2023-11-22. End: 2025-05-15.

What is the specific justification provided by the Department of the Navy for awarding this contract on a sole-source basis to Lockheed Martin Corporation?

The justification for a sole-source award typically stems from specific circumstances outlined in federal acquisition regulations (FAR). For this contract, common reasons might include that Lockheed Martin is the only entity possessing the necessary technical data, proprietary knowledge, or specialized facilities to support the MK41 Platform. Alternatively, urgent and compelling circumstances, such as an immediate need to maintain operational readiness where competition would cause unacceptable delays, could be cited. Without access to the official Justification and Approval (J&A) document, the precise rationale remains speculative. However, the nature of complex, proprietary defense systems often leads to sole-source procurements to ensure continuity of support and maintain system integrity.

How does the firm fixed-price (FFP) contract type mitigate risks for the government in this sole-source scenario?

A Firm Fixed-Price (FFP) contract type is generally advantageous for the government as it establishes a ceiling price that the contractor must not exceed. This shifts the risk of cost overruns from the government to the contractor. In a sole-source situation, while the initial price negotiation is critical, the FFP structure still provides a degree of cost certainty. It incentivizes the contractor to manage its own costs efficiently to maximize profit. However, it does not inherently guarantee the 'best' price, as that is contingent on the negotiation leverage and market information available during the award process. The government's ability to define clear requirements and performance standards is crucial for effective FFP contract management, even in sole-source awards.

What is the historical spending pattern for MK41 Platform support, and how does this $170.8 million award compare?

Analyzing historical spending for MK41 Platform support requires access to detailed contract databases and program office records. Typically, sustainment and support contracts for major defense platforms like the MK41 VLS are multi-year endeavors, often involving significant cumulative expenditures. Without specific historical data for this particular PBL (Performance-Based Logistics) support, a direct comparison is difficult. However, a $170.8 million award over approximately 1.5 years (November 2023 to May 2025) suggests a substantial, ongoing investment in maintaining the operational readiness of this critical naval weapon system. Annual spending would likely be in the tens of millions, consistent with the sustainment costs of complex military hardware.

What are the potential implications for the U.S. Navy's operational readiness if this support contract experiences performance issues?

Performance issues with this MK41 PBL Support contract could have significant implications for the U.S. Navy's operational readiness. The MK41 Vertical Launching System is a cornerstone of naval surface combatants, capable of launching a wide array of missiles. Any degradation in its support, maintenance, or availability directly impacts the fleet's ability to conduct missions, project power, and defend itself. Failures in performance could lead to reduced deployment schedules, limitations on weapon system availability during exercises or actual combat, and potentially increased costs for emergency repairs or expedited logistics. The sole-source nature of the award underscores the criticality of ensuring Lockheed Martin meets its contractual obligations effectively.

Are there any known track record issues with Lockheed Martin Corporation regarding sole-source defense contracts of similar magnitude?

Lockheed Martin Corporation is a major defense contractor with an extensive history of performing large-scale, complex contracts, including many sole-source awards, particularly in specialized areas like missile systems and platform support. While specific issues related to sole-source contracts of this exact magnitude are not immediately highlighted in public records without deep dives into contract performance reports and IG investigations, large contractors inevitably face scrutiny. Past performance reviews, contract disputes, or audit findings are common across the industry. For this specific contract, a review of Lockheed Martin's past performance ratings and any documented issues with similar sole-source PBL support contracts would be necessary for a comprehensive assessment.

Industry Classification

NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Bare Printed Circuit Board Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2323 EASTERN BLVD, BALTIMORE, MD, 21220

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

Financial Breakdown

Contract Ceiling: $17,086,447

Exercised Options: $17,086,447

Current Obligation: $17,086,447

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0038320DWB01

IDV Type: IDC

Timeline