DoD Awards $196M for Missile R&D to Lockheed Martin, Raising Oversight Concerns
Contract Overview
Contract Amount: $171,304,462 ($171.3M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2004-05-05
End Date: 2009-03-31
Contract Duration: 1,791 days
Daily Burn Rate: $95.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE
Sector: Defense
Official Description: 200408!003133!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q04C0094 !A!N! !N! ! !20040505!20100930!196189385!196189385!834951691!N!LOCKHEED MARTIN CORPORATION !5600 WEST SAND LAKE ROAD !ORLANDO !FL!32819!53000!095!12!ORLANDO !ORANGE !FLORIDA !+000053111721!N!N!000000000000!AZ17!RDTE/OTHER RESEARCH&DEVELOPMENT-OP SY DEVELOP !A2 !MISSILE AND SPACE SYSTEMS !370 !COMMON MISSILE !336414!E! !3! ! ! ! ! !99990909!B! ! !A! !A!N!V!2!003!N!1G!C!N!D! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! ! ! ! !0001! !
Place of Performance
Location: ORLANDO, ORANGE County, FLORIDA, 32819
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $171.3 million to LOCKHEED MARTIN CORPORATION for work described as: 200408!003133!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q04C0094 !A!N! !N! ! !20040505!20100930!196189385!196189385!834951691!N!LOCKHEED MARTIN CORPORATION !5600 WEST SAND LAKE ROAD !ORLANDO !FL!32819!53000!095!12!ORLANDO !ORAN… Key points: 1. Significant contract awarded to a single large defense contractor. 2. Research and Development focus on missile systems. 3. Potential for cost overruns given the 'cost plus incentive' contract type. 4. Limited competition raises questions about best value for taxpayer funds.
Value Assessment
Rating: questionable
The contract value of $196,189,385 for missile R&D appears high, especially considering it was not competed. Benchmarking is difficult without comparable contracts, but the lack of competition suggests potential for inflated pricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
This contract was awarded under a limited competition, specifically to Lockheed Martin Corporation. The 'NOT COMPETED' status indicates a lack of broad market solicitation, potentially limiting price discovery and competitive pressure.
Taxpayer Impact: The absence of full and open competition for a nearly $200 million contract may result in taxpayers paying more than necessary for missile research and development.
Public Impact
Taxpayers may not be receiving the best possible price due to limited competition. The contract supports advanced missile technology, a critical national security area. Oversight is crucial to ensure the $196 million is spent effectively and efficiently.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition
- Cost-plus contract type
- Lack of transparency in pricing
Positive Signals
- Supports critical defense technology
- Awarded to a known industry leader
Sector Analysis
This contract falls within the Research, Development, Test, and Evaluation (RDTE) sector, specifically focusing on missile and space systems. Defense R&D spending is a significant portion of the federal budget, with contracts often awarded to large, established aerospace and defense companies.
Small Business Impact
The contract was awarded to Lockheed Martin Corporation, a major defense contractor. There is no indication that small businesses were involved in this specific award, which is common for large, specialized R&D contracts.
Oversight & Accountability
The 'NOT COMPETED' status warrants close oversight to ensure fair pricing and effective execution. The 'cost plus incentive' contract type requires diligent monitoring of performance and costs to prevent overspending.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Lack of full and open competition
- Potential for cost overruns due to contract type
- Limited transparency in pricing justification
- High contract value awarded to a single entity
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, fl, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $171.3 million to LOCKHEED MARTIN CORPORATION. 200408!003133!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q04C0094 !A!N! !N! ! !20040505!20100930!196189385!196189385!834951691!N!LOCKHEED MARTIN CORPORATION !5600 WEST SAND LAKE ROAD !ORLANDO !FL!32819!53000!095!12!ORLANDO !ORANGE !FLORIDA !+000053111721!N!N!000000000000!AZ17!RDTE/OTHER RESEARCH&DEVELOPMENT-OP SY DEVELOP !A2 !MISSILE AND SPACE SYSTEMS !370 !COMMON MISSILE !336414!E! !3! ! ! ! ! !99990
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 Army).
What is the total obligated amount?
The obligated amount is $171.3 million.
What is the period of performance?
Start: 2004-05-05. End: 2009-03-31.
What specific factors justified the limited competition for this missile R&D contract?
The justification for limited competition would typically involve factors such as unique technical requirements, proprietary technology, or the need for specialized expertise possessed by only one contractor. Without further documentation, it's difficult to ascertain the precise reasons, but these are common justifications in defense R&D.
How will the 'cost plus incentive' structure be monitored to ensure taxpayer value?
Monitoring a cost-plus-incentive contract involves rigorous tracking of incurred costs against a target cost, with incentives tied to performance metrics and cost savings. The contracting officer and technical team must establish clear performance benchmarks and cost ceilings, regularly auditing expenditures and progress to ensure efficient use of funds.
What is the potential long-term impact of awarding such a large contract without full competition on future defense procurement?
Consistently awarding large R&D contracts without full competition can stifle innovation from smaller or emerging companies and potentially lead to higher overall defense spending. It may also entrench incumbent contractors, reducing pressure to improve efficiency or offer more competitive pricing in subsequent procurements.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing
Product/Service Code: RESEARCH AND DEVELOPMENT › OTHER RESEARCH/DEVELOPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: 5600 WEST SAND LAKE ROAD, ORLANDO, FL, 90
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2004-05-05
Current End Date: 2009-03-31
Potential End Date: 2009-03-31 00:00:00
Last Modified: 2012-10-17
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