Lockheed Martin awarded $851M for missile and space systems, with a significant portion for rockets and components

Contract Overview

Contract Amount: $85,135,442 ($85.1M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2004-02-26

End Date: 2017-09-30

Contract Duration: 4,965 days

Daily Burn Rate: $17.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200408!002169!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q04C0080 !A!N! !N! ! !20040226!20060331!794571448!794571448!834951691!N!LOCKHEED MARTIN CORPORATION !1701 W MARSHALL DRIVE !GRAND PRAIRIE !TX!75051!30464!113!48!GRAND PRAIRIE !DALLAS !TEXAS !+000087991879!N!N!000000000000!1340!ROCKETS, ROCKET AMMUNITION & ROCKET COMPS !A2 !MISSILE AND SPACE SYSTEMS !000 !* !336414!E! !3! ! ! ! ! !99990909!B! ! !A! !D!N!J!1!001!N!1G!Z!Y!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!Y! ! ! ! ! ! !0001! !

Place of Performance

Location: GRAND PRAIRIE, DALLAS County, TEXAS, 75051

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $85.1 million to LOCKHEED MARTIN CORPORATION for work described as: 200408!002169!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q04C0080 !A!N! !N! ! !20040226!20060331!794571448!794571448!834951691!N!LOCKHEED MARTIN CORPORATION !1701 W MARSHALL DRIVE !GRAND PRAIRIE !TX!75051!30464!113!48!GRAND PRAIRIE !DALL… Key points: 1. Contract value exceeds $851 million, primarily for rockets, rocket ammunition, and components. 2. Awarded to Lockheed Martin Corporation, a major defense contractor. 3. The contract spans over 13 years, indicating a long-term need for these systems. 4. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 5. The procurement was not competed, raising questions about potential cost efficiencies. 6. The North American Industry Classification System (NAICS) code points to Guided Missile and Space Vehicle Manufacturing.

Value Assessment

Rating: fair

The contract value of $851,354,41.55 is substantial, reflecting the complexity and strategic importance of missile and space systems. Without specific benchmarks for comparable contracts or detailed cost breakdowns, a precise value-for-money assessment is challenging. However, the long duration and the firm fixed-price nature suggest an attempt to manage costs over the contract's lifecycle. The lack of competition, however, limits the ability to benchmark against market rates and could potentially lead to less favorable pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source procurement, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the requirement. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices through market forces.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without alternative offers, it is difficult to ascertain if the pricing reflects the best possible value achievable in a competitive market.

Public Impact

The primary beneficiaries are the U.S. military branches requiring advanced missile and space systems for national defense. The contract supports the production and delivery of critical components for guided missiles and space vehicles. The geographic impact is concentrated around Lockheed Martin's facilities, particularly in Grand Prairie, Texas. This contract likely sustains a significant number of jobs within Lockheed Martin's aerospace and defense divisions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher costs for taxpayers.
Long contract duration could mask inefficiencies if not closely monitored.
Reliance on a single contractor for critical defense systems poses a strategic risk.

Positive Signals

Firm Fixed Price contract shifts cost risk to the contractor.
Award to a major defense contractor suggests established capabilities and reliability.
Long-term nature indicates a sustained commitment to critical defense capabilities.

Sector Analysis

This contract falls within the Defense sector, specifically the Guided Missile and Space Vehicle Manufacturing industry. This is a highly specialized and capital-intensive sector dominated by a few large defense contractors. The market is characterized by significant government investment and long development cycles. Comparable spending benchmarks are difficult to establish due to the unique nature of missile and space systems, but overall U.S. defense spending on such platforms is in the billions annually.

Small Business Impact

There is no indication of small business set-asides or subcontracting plans in the provided data. As a sole-source award to a large prime contractor, the direct impact on small businesses is likely minimal unless Lockheed Martin voluntarily engages them for subcontracting opportunities. The absence of specific small business goals suggests this contract may not be structured to foster small business participation.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contract management agencies, such as the Defense Contract Management Agency (DCMA). Accountability measures would be embedded in the contract's terms and conditions, including performance metrics and delivery schedules. Transparency is limited due to the sole-source nature and the proprietary aspects of defense technology. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Missile Defense Systems
Space Launch Vehicles
Strategic Weapons Systems
Aviation and Missile Command Procurement

Risk Flags

Sole-source procurement limits price competition.
Long contract duration requires sustained oversight.
Critical defense systems may have limited alternative suppliers.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $85.1 million to LOCKHEED MARTIN CORPORATION. 200408!002169!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q04C0080 !A!N! !N! ! !20040226!20060331!794571448!794571448!834951691!N!LOCKHEED MARTIN CORPORATION !1701 W MARSHALL DRIVE !GRAND PRAIRIE !TX!75051!30464!113!48!GRAND PRAIRIE !DALLAS !TEXAS !+000087991879!N!N!000000000000!1340!ROCKETS, ROCKET AMMUNITION & ROCKET COMPS !A2 !MISSILE AND SPACE SYSTEMS !000 !* !336414!E! !3! ! ! ! ! !999

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 $85.1 million.

What is the period of performance?

Start: 2004-02-26. End: 2017-09-30.

What is the historical spending trend for this specific contract or similar contracts with Lockheed Martin for missile and space systems?

The provided data indicates a single definitive contract awarded on 2004-02-26 with an end date of 2017-09-30, totaling $851,354,41.55. This suggests a significant, long-term investment in missile and space systems. To assess historical trends, one would need to examine prior contracts for similar systems awarded to Lockheed Martin or other prime contractors. Analyzing annual spending patterns within this contract's duration would reveal if the funding was consistently disbursed or if there were periods of higher or lower expenditure. Without access to a broader contract history database, a comprehensive trend analysis is not possible based solely on this record.

How does the per-unit cost of the rockets and components compare to industry benchmarks or other government procurements?

Determining the per-unit cost is challenging without detailed breakdowns of the contract's deliverables. The contract covers a broad category: 'ROCKETS, ROCKET AMMUNITION & ROCKET COMPS'. The total value of $851,354,41.55 spread over a 13-year period (2004-2017) averages approximately $65.5 million per year. However, this average does not reflect the number of units produced or the specific types of rockets and components. To benchmark per-unit costs, one would need access to the contract's detailed specifications, the quantity of items procured, and comparable pricing data from other sole-source or competed contracts for similar defense articles. Given the sole-source nature, direct market price comparisons are inherently difficult.

What specific performance metrics or milestones were established for this contract, and how did Lockheed Martin perform against them?

The provided data does not include specific performance metrics or milestones. For a definitive contract of this nature, performance would typically be governed by detailed technical specifications, delivery schedules, and quality assurance requirements outlined in the contract's statement of work. Government contract officers and quality assurance representatives would monitor Lockheed Martin's adherence to these terms. Assessing performance would require reviewing contract performance reports, acceptance records, and any documented deviations or corrective actions. Without access to these internal government records, a judgment on Lockheed Martin's performance against contractual obligations cannot be made.

What are the potential risks associated with relying on a sole-source provider for such critical defense components?

The primary risks of sole-source procurement for critical defense components include lack of price competition, which can lead to inflated costs for taxpayers. There's also a risk of technological stagnation if the sole provider faces no pressure to innovate or improve efficiency. Furthermore, dependence on a single supplier creates a vulnerability in the supply chain; any disruption at the contractor's facility or in their own supply chain could have significant national security implications. The government also has less leverage to negotiate favorable terms or drive down prices compared to a competitive environment.

What is the strategic importance of these missile and space systems to the U.S. military, and how does this contract support that strategy?

Missile and space systems are fundamental to modern U.S. military strategy, encompassing offensive capabilities, defensive systems (like missile defense), intelligence, surveillance, reconnaissance (ISR), and space-based communications and navigation. This contract, valued at over $851 million and focused on rockets, rocket ammunition, and components, directly supports the development, production, and sustainment of these critical assets. It ensures the availability of essential hardware for platforms that are vital for projecting power, maintaining strategic deterrence, and safeguarding national interests in terrestrial, aerial, and space domains.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 1701 W MARSHALL DRIVE, GRAND PRAIRIE, TX, 75051

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $87,203,743

Exercised Options: $87,219,142

Current Obligation: $85,135,442

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline