DoD Awards $238M for LONGBOW/HELLFIRE Launchers to Lockheed Martin, Lacking Competition
Contract Overview
Contract Amount: $238,005,848 ($238.0M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2007-09-20
End Date: 2018-01-31
Contract Duration: 3,786 days
Daily Burn Rate: $62.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: M299 LONGBOW/HELLFIRE LAUNCHERS. LAUNCHER COMPONENTS, ENGINEERING SERVICES, MODIFICATION WORK ORDER SUPPORT, AND DEPOT LEVEL MAINTENANCE. CONTAINS BASIC AND OPTION QUANTITIES.
Place of Performance
Location: ORLANDO, ORANGE County, FLORIDA, 32819
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $238.0 million to LOCKHEED MARTIN CORPORATION for work described as: M299 LONGBOW/HELLFIRE LAUNCHERS. LAUNCHER COMPONENTS, ENGINEERING SERVICES, MODIFICATION WORK ORDER SUPPORT, AND DEPOT LEVEL MAINTENANCE. CONTAINS BASIC AND OPTION QUANTITIES. Key points: 1. Significant contract value of $238 million for critical missile launcher systems. 2. Sole awardee is Lockheed Martin, indicating a lack of competitive bidding. 3. Long contract duration of over 10 years raises questions about sustained value. 4. The contract covers a wide range of services including components, engineering, and maintenance.
Value Assessment
Rating: questionable
The contract value is substantial, but without competitive benchmarking, assessing its value for money is difficult. The firm-fixed-price structure aims to control costs, but the lack of competition limits price discovery.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, suggesting a sole-source award. This significantly limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive process.
Taxpayer Impact: The absence of competition for a contract of this magnitude means taxpayers may be paying a premium for these essential defense systems.
Public Impact
Ensures continued operational readiness for critical Army aviation assets. Supports advanced missile technology essential for modern warfare. Potential for cost overruns due to lack of competitive pressure. Impacts the broader aerospace and defense industrial base.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Long contract duration
- Sole-source award
Positive Signals
- Essential defense system
- Firm-fixed-price contract
Sector Analysis
This contract falls within the Defense sector, specifically focusing on missile systems and associated support. Spending in this area is critical for national security, but often involves complex, high-value procurements where competition can be challenging.
Small Business Impact
The data indicates this contract was not awarded to small businesses, as Lockheed Martin is a large prime contractor. There is no information on subcontracting opportunities for small businesses within this award.
Oversight & Accountability
The sole-source nature of this large contract warrants close oversight to ensure fair pricing and effective delivery. DoD should explore opportunities for future competition or robust performance monitoring.
Related Government Programs
- Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award
- Lack of competition
- Long contract duration
- Potential for cost escalation
- Limited price discovery
Tags
guided-missile-and-space-vehicle-propuls, department-of-defense, fl, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $238.0 million to LOCKHEED MARTIN CORPORATION. M299 LONGBOW/HELLFIRE LAUNCHERS. LAUNCHER COMPONENTS, ENGINEERING SERVICES, MODIFICATION WORK ORDER SUPPORT, AND DEPOT LEVEL MAINTENANCE. CONTAINS BASIC AND OPTION QUANTITIES.
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 $238.0 million.
What is the period of performance?
Start: 2007-09-20. End: 2018-01-31.
What is the justification for not competing this significant contract, and what steps are being taken to ensure fair pricing?
The justification for not competing this contract is not provided in the data. However, for sole-source awards of this magnitude, the Department of Defense typically requires extensive justification, often related to unique capabilities or urgent needs. To ensure fair pricing, the government may conduct should-cost analyses, rely on historical pricing data, or engage in extensive negotiation with the sole provider.
Given the long duration and lack of competition, what are the primary risks to the government regarding cost and performance?
The primary risks include potential cost overruns due to the absence of competitive pressure, which can lead to inflated prices. Performance risks involve potential complacency from the contractor, leading to reduced innovation or quality over the contract's extended period. Ensuring robust contract management and performance metrics is crucial to mitigate these risks.
How does the lack of competition for this contract impact the overall effectiveness of DoD's procurement strategy for similar weapon systems?
The lack of competition for this contract suggests a potential gap in the market or a strategic decision to rely on a specific provider. This can reduce the overall effectiveness of DoD's procurement strategy by limiting opportunities for innovation from other potential suppliers and potentially setting a precedent for future sole-source awards, which can be less cost-effective and hinder technological advancement.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing
Product/Service Code: GUIDED MISSLES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W31P4Q06R0245
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp
Address: 5600 W SAND LAKE RD MP125, ORLANDO, FL, 32819
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $279,161,291
Exercised Options: $278,971,141
Current Obligation: $238,005,848
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2007-09-20
Current End Date: 2018-01-31
Potential End Date: 2018-01-31 12:01:00
Last Modified: 2023-05-23
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