DoD Awards $794M+ Contract to Lockheed Martin for HIMARS Launchers, Raising Concerns Over Competition
Contract Overview
Contract Amount: $333,935,117 ($333.9M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2005-12-28
End Date: 2014-01-31
Contract Duration: 2,956 days
Daily Burn Rate: $113.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 200603!001235!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q06C0001 !A!N! !N! ! !20051228!20080630!794571448!794571448!834951691!N!LOCKHEED MARTIN CORPORATION !1701 W MARSHALL DRIVE !GRAND PRAIRIE !TX!75051!30464!113!48!GRAND PRAIRIE !DALLAS !TEXAS !+000099916279!N!N!000000000000!1440!LAUNCHERS, GUIDED MISSILE !A2 !MISSILE AND SPACE SYSTEMS !367 !HIMARS !336414!E! !3! ! ! ! ! !99990909!B! ! !A! !D!N!J!1!001!N!1G!A!Y!A! ! !N!C!N! ! ! !A!A!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 $333.9 million to LOCKHEED MARTIN CORPORATION for work described as: 200603!001235!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q06C0001 !A!N! !N! ! !20051228!20080630!794571448!794571448!834951691!N!LOCKHEED MARTIN CORPORATION !1701 W MARSHALL DRIVE !GRAND PRAIRIE !TX!75051!30464!113!48!GRAND PRAIRIE !DALL… Key points: 1. The contract, valued at over $794 million, was awarded to Lockheed Martin Corporation for Guided Missile Launchers. 2. This award was 'NOT COMPETED', indicating a potential lack of competitive bidding and price discovery. 3. The duration of the contract is substantial, spanning from December 2005 to January 2014 (2956 days). 4. The primary sector is IT/Defense, specifically Missile and Space Systems, with a significant portion allocated to HIMARS. 5. The total value of the contract is $794,571,448.
Value Assessment
Rating: questionable
The contract value of $794,571,448 for Guided Missile Launchers is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to similar contracts or market rates.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was awarded using a 'NOT COMPETED' method, which significantly limits competition. This approach can lead to higher prices as there is no pressure from competing bids to drive down costs.
Taxpayer Impact: The lack of competition raises concerns about taxpayer value, as the government may not have secured the best possible price for these critical missile systems.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding on this large contract. The reliance on a single source for such a significant defense system could pose supply chain risks. The long contract duration suggests a sustained, potentially exclusive, relationship with Lockheed Martin for this product.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of Competition
- Potential for Overpricing
- Sole-Source Award
Positive Signals
- Critical Defense System
- Established Contractor
Sector Analysis
This contract falls within the Defense sector, specifically focusing on missile and space systems. The value is significant, representing a substantial investment in military hardware. Benchmarks for similar sole-source missile system contracts would be needed for a precise comparison.
Small Business Impact
There is no indication in the provided data whether small businesses were involved as subcontractors or partners in this contract. Further investigation would be needed to determine any small business participation.
Oversight & Accountability
The 'NOT COMPETED' designation suggests that standard competitive oversight processes may have been bypassed. Accountability for the pricing and performance would rely heavily on the terms negotiated in this sole-source agreement.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Lack of competitive bidding
- Potential for inflated pricing
- Sole-source dependency
- Long contract duration without clear competitive milestones
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, tx, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $333.9 million to LOCKHEED MARTIN CORPORATION. 200603!001235!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q06C0001 !A!N! !N! ! !20051228!20080630!794571448!794571448!834951691!N!LOCKHEED MARTIN CORPORATION !1701 W MARSHALL DRIVE !GRAND PRAIRIE !TX!75051!30464!113!48!GRAND PRAIRIE !DALLAS !TEXAS !+000099916279!N!N!000000000000!1440!LAUNCHERS, GUIDED MISSILE !A2 !MISSILE AND SPACE SYSTEMS !367 !HIMARS !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 (Department of the Army).
What is the total obligated amount?
The obligated amount is $333.9 million.
What is the period of performance?
Start: 2005-12-28. End: 2014-01-31.
What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Without specific documentation, it's presumed the contracting agency determined Lockheed Martin was the only source capable of fulfilling the requirement. Steps to ensure fair pricing would include cost analysis, comparison to previous contracts, and negotiation, though the absence of competition inherently limits price discovery.
What are the long-term risks associated with awarding such a large contract for a critical defense system without competition?
The primary long-term risk is vendor lock-in, where the government becomes overly dependent on a single supplier, potentially leading to escalating costs and reduced innovation. It can also stifle competition in the broader defense industrial base. Furthermore, if the sole-source contractor faces production issues or financial instability, it could significantly disrupt the supply of essential military equipment.
How does the pricing of this contract compare to similar missile launcher systems procured through competitive means, if such data is available?
Direct comparison is challenging without access to specific pricing data for comparable systems acquired competitively. However, the 'NOT COMPETED' status inherently suggests a higher likelihood of the price being less favorable than if multiple bidders had vied for the contract. A thorough analysis would require benchmarking against other HIMARS procurements or similar systems, considering variations in scope, quantity, and contract type.
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: 1701 W MARSHALL DRIVE, GRAND PRAIRIE, TX, 75051
Business Categories: Category Business, 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: 2005-12-28
Current End Date: 2014-01-31
Potential End Date: 2014-01-31 12:01:00
Last Modified: 2016-01-12
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