DoD Awards $794.6M Contract to Lockheed Martin for Missile Systems Development
Contract Overview
Contract Amount: $19,323,837 ($19.3M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2006-06-29
End Date: 2009-07-31
Contract Duration: 1,128 days
Daily Burn Rate: $17.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: 200608!004418!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q06C0379 !A!N! !Y! ! !20060629!20061231!794571448!794571448!834951691!N!LOCKHEED MARTIN CORPORATION !1701 W MARSHALL DRIVE !GRAND PRAIRIE !TX!75051!30464!113!48!GRAND PRAIRIE !DALLAS !TEXAS !+000009005262!N!N!000000000000!AC27!RDTE/MISSILE AND SPACE SYSTEMS-OP SYSTEM DEVELOP !A2 !MISSILE AND SPACE SYSTEMS !260 !GMLRS !336415!E! !3! ! ! ! ! !99990909!B! ! !A! !D!N!U!1!001!N!1G!Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!A!N! ! ! ! ! ! !0001! !
Place of Performance
Location: GRAND PRAIRIE, DALLAS County, TEXAS, 75051
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $19.3 million to LOCKHEED MARTIN CORPORATION for work described as: 200608!004418!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q06C0379 !A!N! !Y! ! !20060629!20061231!794571448!794571448!834951691!N!LOCKHEED MARTIN CORPORATION !1701 W MARSHALL DRIVE !GRAND PRAIRIE !TX!75051!30464!113!48!GRAND PRAIRIE !DALL… Key points: 1. Significant award to a major defense contractor for missile systems. 2. Contract type is Cost Plus Fixed Fee, which can lead to cost overruns. 3. Limited competition raises concerns about price discovery and taxpayer value. 4. Focus on R&D/Missile and Space Systems indicates a critical defense capability.
Value Assessment
Rating: questionable
The contract value of $794.6 million is substantial. Without specific benchmarks for similar R&D missile system development contracts, it's difficult to definitively assess if this pricing is competitive. The Cost Plus Fixed Fee structure warrants close monitoring for potential cost escalations.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was not competed, suggesting a limited source selection. This approach may be justified by specific technical requirements or existing relationships, but it limits the opportunity for competitive bidding and potentially impacts price discovery.
Taxpayer Impact: The lack of full and open competition raises concerns about whether the government secured the best possible price for taxpayers on this significant award.
Public Impact
Impacts national defense capabilities through advanced missile technology. Supports high-tech jobs within the aerospace and defense sector. Potential for technological advancements with dual-use applications. Requires ongoing oversight to ensure program objectives are met within budget.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition
- Cost Plus Fixed Fee contract type
- Long contract duration (1128 days)
Positive Signals
- Award to established defense contractor
- Focus on critical defense systems
Sector Analysis
This contract falls within the Research, Development, Test, and Evaluation (RDTE) category for Missile and Space Systems. Spending in this sector is critical for maintaining technological superiority but often involves high costs and complex development cycles.
Small Business Impact
This contract was awarded to Lockheed Martin Corporation, a large prime contractor. There is no indication of subcontracting opportunities for small businesses within the provided data, which is common for large, specialized defense contracts.
Oversight & Accountability
The contract's oversight will be managed by the Department of Defense, likely through the Defense Contract Management Agency. Given the contract type and limited competition, robust oversight is crucial to manage costs and ensure performance.
Related Government Programs
- Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Potential for cost overruns due to CPFF structure
- Lack of competitive pricing pressure
- Long contract duration increases exposure to changing requirements
- Complexity of missile system development introduces technical risks
Tags
guided-missile-and-space-vehicle-propuls, department-of-defense, tx, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $19.3 million to LOCKHEED MARTIN CORPORATION. 200608!004418!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q06C0379 !A!N! !Y! ! !20060629!20061231!794571448!794571448!834951691!N!LOCKHEED MARTIN CORPORATION !1701 W MARSHALL DRIVE !GRAND PRAIRIE !TX!75051!30464!113!48!GRAND PRAIRIE !DALLAS !TEXAS !+000009005262!N!N!000000000000!AC27!RDTE/MISSILE AND SPACE SYSTEMS-OP SYSTEM DEVELOP !A2 !MISSILE AND SPACE SYSTEMS !260 !GMLRS !336415!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 $19.3 million.
What is the period of performance?
Start: 2006-06-29. End: 2009-07-31.
What specific technical requirements or market conditions justified the limited competition for this missile system development contract?
The justification for limited competition typically stems from unique technical capabilities possessed by a single source, urgent requirements where only one contractor can respond in time, or specific government-mandated sources. Without further documentation, it's presumed that Lockheed Martin held proprietary technology or unique expertise essential for this particular missile system development, making full and open competition impractical or detrimental to program goals.
How does the Cost Plus Fixed Fee (CPFF) structure influence the risk of cost overruns for this missile development project?
The CPFF structure shifts a significant portion of the cost risk to the government. While the contractor receives a fixed fee, they are reimbursed for allowable costs. This can incentivize cost control up to a point, but if costs escalate beyond initial estimates, the government bears the burden. For complex R&D like missile systems, unforeseen technical challenges can easily lead to cost overruns, making close government monitoring essential.
What are the key performance indicators (KPIs) being used to measure the effectiveness of this missile system development contract?
Effectiveness is likely measured against stringent technical performance specifications, including range, accuracy, payload delivery, reliability, and survivability. Milestones for design completion, prototype testing, and successful integration with existing platforms are also critical. The government will track adherence to these technical requirements and the successful achievement of developmental phases as primary indicators of effectiveness.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
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
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2006-06-29
Current End Date: 2009-07-31
Potential End Date: 2009-07-31 00:00:00
Last Modified: 2016-09-02
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