DoD awards $252.7M contract to Lockheed Martin for guided missile manufacturing, with a 1349-day duration

Contract Overview

Contract Amount: $252,705,859 ($252.7M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2006-12-21

End Date: 2010-08-31

Contract Duration: 1,349 days

Daily Burn Rate: $187.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FRP 2 CONTRACT

Place of Performance

Location: GRAND PRAIRIE, DALLAS County, TEXAS, 75051

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $252.7 million to LOCKHEED MARTIN CORPORATION for work described as: FRP 2 CONTRACT Key points: 1. Contract value of $252.7 million over 1349 days suggests significant investment in missile systems. 2. Sole-source award to Lockheed Martin raises questions about competition and potential price efficiencies. 3. The contract's duration indicates a long-term need for these specific missile and space vehicles. 4. Fixed-price contract type aims to transfer some risk to the contractor, but requires careful oversight. 5. Focus on guided missile manufacturing places this contract within a critical defense sector. 6. Awarded in 2006 and ending in 2010, this contract reflects past defense procurement strategies.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the guided missiles or space vehicles procured. However, a $252.7 million award over nearly four years for specialized defense manufacturing suggests a substantial investment. The firm fixed-price structure implies an expectation of predictable costs, but the lack of competitive bidding limits direct comparison to market rates. Further analysis would require understanding the unit costs and performance metrics against similar defense systems.

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 among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities or when urgency and national security dictate a direct award. The absence of competition means there was no opportunity for price discovery through a bidding process, potentially leading to higher costs for the government compared to a fully competed contract.

Taxpayer Impact: Sole-source awards can limit taxpayer value by bypassing competitive pressures that drive down prices. Without multiple bids, the government may not secure the most cost-effective solution.

Public Impact

The primary beneficiaries are the Department of Defense and potentially allied nations relying on advanced missile technology. Services delivered include the manufacturing of guided missiles and space vehicles essential for national defense. The geographic impact is primarily within Texas, where Lockheed Martin's facility is located, supporting local employment and industry. Workforce implications include skilled labor in aerospace engineering, manufacturing, and quality control within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Lack of transparency in the sole-source justification requires scrutiny to ensure necessity.
Long contract duration could lead to cost overruns if not managed effectively.
Firm fixed-price contracts can still incur overruns if scope changes or unforeseen issues arise.

Positive Signals

Award to a major defense contractor like Lockheed Martin suggests access to advanced technology and manufacturing capabilities.
Firm fixed-price contract type shifts some financial risk to the contractor.
The contract supports a critical defense capability, ensuring national security needs are met.
Long-term contract provides stability for the contractor and ensures sustained supply of essential defense assets.

Sector Analysis

This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a highly specialized and critical segment of the aerospace and defense industry. This sector is characterized by high barriers to entry, significant R&D investment, and stringent quality control requirements. Spending in this area is driven by national security priorities and technological advancements. Comparable spending benchmarks would typically involve other large-scale defense procurement contracts for advanced weapon systems.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the prime contractor is Lockheed Martin Corporation, a large aerospace and defense company. There is no explicit information regarding subcontracting plans for small businesses within this data. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, though large prime contractors often engage small businesses in their supply chains.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. As a sole-source award, the justification and negotiation process would be subject to specific review protocols. Transparency is limited due to the non-competitive nature. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract execution.

Related Government Programs

Guided Missile Manufacturing
Space Vehicle Manufacturing
Department of Defense Procurement
Lockheed Martin Contracts
Aerospace and Defense Industry Spending

Risk Flags

Sole-source award requires justification and scrutiny.
Long contract duration may present management challenges.
Firm fixed-price contracts can still face cost/schedule risks if not managed properly.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $252.7 million to LOCKHEED MARTIN CORPORATION. FRP 2 CONTRACT

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 $252.7 million.

What is the period of performance?

Start: 2006-12-21. End: 2010-08-31.

What specific types of guided missiles or space vehicles were procured under this contract?

The provided data indicates the contract was for 'Guided Missile and Space Vehicle Manufacturing' under PSC code 336414. However, it does not specify the exact models or types of missiles or space vehicles. This level of detail is typically found in the contract's statement of work or technical exhibits, which are not included in this summary. Understanding the specific systems would be crucial for assessing the contract's strategic importance, technological sophistication, and value for money compared to other defense assets.

How does the $252.7 million value compare to other similar missile system procurements by the DoD?

Direct comparison of the $252.7 million total contract value is difficult without knowing the specific missile systems procured. However, for context, major missile programs can range from hundreds of millions to billions of dollars over their lifecycle. This contract, awarded over approximately 3.6 years (1349 days), represents a significant but not exceptionally large single award in the context of major defense procurement. To provide a more precise benchmark, one would need to compare it to contracts for similar classes of missiles (e.g., air-to-air, surface-to-air, ballistic missiles) awarded around the same period.

What were the key justifications for awarding this contract on a sole-source basis to Lockheed Martin?

Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. For a defense contractor like Lockheed Martin, this could be due to proprietary technology, unique manufacturing capabilities for a specific missile system, existing platform integration, or national security imperatives that preclude a lengthy competitive process. The specific justification would have been documented by the Department of the Army at the time of award, likely citing reasons such as unique technical expertise, prior development investment, or the need for commonality with existing systems.

What is Lockheed Martin's track record with the Department of Defense for missile systems?

Lockheed Martin Corporation is one of the largest defense contractors globally and has a long and extensive track record with the Department of Defense, particularly in missile systems. They are known for developing and producing a wide array of missiles, including the Patriot air defense system, THAAD (Terminal High Altitude Area Defense), Javelin anti-tank missile, and various strategic and tactical missile programs. Their history with the DoD is marked by numerous large-scale contracts, often involving complex technologies and significant production volumes, reflecting their established position in the defense industrial base.

What are the potential risks associated with a firm fixed-price contract for missile manufacturing?

While firm fixed-price (FFP) contracts aim to control costs by placing the risk of cost overruns on the contractor, risks remain. For complex items like missiles, unforeseen technical challenges during manufacturing or integration can arise, potentially leading to contractor requests for equitable adjustments or contract modifications. If the initial price was set too low due to inadequate cost estimation or competitive pressure, the contractor might struggle to deliver profitably, potentially impacting quality or delivery schedules. Furthermore, changes in government requirements during the contract period can necessitate contract modifications, which need careful negotiation to protect the government's interests and maintain the FFP nature where possible.

How has spending on guided missile and space vehicle manufacturing evolved within the DoD since this contract was awarded?

Spending on guided missile and space vehicle manufacturing has generally remained a significant portion of the DoD budget, driven by evolving threats and technological advancements. Since the 2006-2010 period of this contract, there has been a continued emphasis on modernizing missile defense systems, developing hypersonic capabilities, and enhancing strategic deterrence. While specific figures fluctuate annually based on program priorities and geopolitical factors, the overall trend indicates sustained investment in this critical defense capability, with major contractors like Lockheed Martin consistently receiving substantial funding.

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 MARSHALL DR, GRAND PRAIRIE, TX, 75051

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $252,705,859

Exercised Options: $252,705,859

Current Obligation: $252,705,859

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline