DoD awards $941M for Hellfire missiles, with Lockheed Martin as sole source
Contract Overview
Contract Amount: $491,828,296 ($491.8M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2005-12-07
End Date: 2013-02-28
Contract Duration: 2,640 days
Daily Burn Rate: $186.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 200603!000051!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q05C0221 !A!N! !N! ! !20051207!20071031!941092306!941092306!941092306!N!HELLFIRE SYSTEMS LIMITED LIABI!5600 WEST SAND LAKE ROAD !ORLANDO !FL!32819!53000!095!12!ORLANDO !ORANGE !FLORIDA !+000000849508!Y!N!000000000000!1410!GUIDED MISSILES !A2 !MISSILE AND SPACE SYSTEMS !541 !LONGBOW HELLFIRE !336414!E! !1! ! ! ! ! !99990909!B! ! !A! !D!Y!J!1!001!N!1G!Z!Y!F! ! !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 $491.8 million to LOCKHEED MARTIN CORPORATION for work described as: 200603!000051!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q05C0221 !A!N! !N! ! !20051207!20071031!941092306!941092306!941092306!N!HELLFIRE SYSTEMS LIMITED LIABI!5600 WEST SAND LAKE ROAD !ORLANDO !FL!32819!53000!095!12!ORLANDO !ORAN… Key points: 1. The contract value is substantial at $941,092,306. 2. Lockheed Martin Corporation is the sole awardee, indicating a lack of competition. 3. The risk of overpricing is elevated due to the sole-source nature of the award. 4. This spending falls within the Defense sector, specifically guided missiles.
Value Assessment
Rating: questionable
The contract value of $941,092,306 for guided missiles appears high, especially given the sole-source award. Without competitive bids, it's difficult to benchmark pricing against similar contracts or market rates.
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 significantly limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The lack of competition raises concerns about whether the government achieved the best possible price for these guided missiles.
Public Impact
Taxpayers may be overpaying for essential defense equipment due to the absence of competitive bidding. The sole-source award to Lockheed Martin could stifle innovation from potential competitors. This contract supports the production of critical Hellfire missiles for the U.S. military.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Potential for overpricing
- Lack of competition
Positive Signals
- Essential defense procurement
- Long-term contract
Sector Analysis
This contract is for guided missiles, a critical component of the defense sector. Spending benchmarks for such specialized defense equipment can vary widely, but sole-source awards often deviate from competitive norms.
Small Business Impact
There is no indication that small businesses were involved in this sole-source contract, either as prime contractors or subcontractors. This limits opportunities for small business participation in defense procurement.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and prevent potential waste, fraud, or abuse. Accountability for the justification of the sole-source decision is crucial.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award lacks competition.
- Potential for inflated pricing.
- Limited transparency in price negotiation.
- Risk of vendor lock-in.
- No small business participation evident.
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, fl, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $491.8 million to LOCKHEED MARTIN CORPORATION. 200603!000051!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q05C0221 !A!N! !N! ! !20051207!20071031!941092306!941092306!941092306!N!HELLFIRE SYSTEMS LIMITED LIABI!5600 WEST SAND LAKE ROAD !ORLANDO !FL!32819!53000!095!12!ORLANDO !ORANGE !FLORIDA !+000000849508!Y!N!000000000000!1410!GUIDED MISSILES !A2 !MISSILE AND SPACE SYSTEMS !541 !LONGBOW HELLFIRE !336414!E! !1! ! ! ! ! !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 (Department of the Army).
What is the total obligated amount?
The obligated amount is $491.8 million.
What is the period of performance?
Start: 2005-12-07. End: 2013-02-28.
What was the justification for awarding this contract on a sole-source basis instead of seeking competitive bids?
The justification for a sole-source award typically involves circumstances where only one responsible source can provide the required supplies or services. This could be due to unique capabilities, proprietary technology, or urgent and compelling needs. A thorough review of the contract file would be necessary to ascertain the specific rationale provided by the Department of Defense for this particular award.
How does the unit price of these Hellfire missiles compare to similar missile systems procured competitively?
Without competitive data, it is impossible to definitively assess the unit price. However, sole-source contracts are inherently at a disadvantage regarding price discovery. It is likely that the unit price is higher than what might have been achieved through a competitive bidding process, as the government lacked the leverage of multiple offers.
What is the long-term strategic impact of relying on a single supplier for critical missile systems like the Hellfire?
Sole reliance on a single supplier for critical systems like the Hellfire can create strategic vulnerabilities. It increases dependence on that specific company, potentially limiting future negotiation leverage and reducing supply chain resilience. It also discourages innovation from other potential manufacturers who might develop alternative or improved systems.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing
Product/Service Code: GUIDED MISSLES
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: 5600 W SAND LAKE RD # MP-265, ORLANDO, FL, 32819
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2005-12-07
Current End Date: 2013-02-28
Potential End Date: 2013-02-28 00:00:00
Last Modified: 2017-03-29
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