DoD's $443M TACMS Production Contract Awarded to Lockheed Martin in 2007

Contract Overview

Contract Amount: $443,235,841 ($443.2M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2007-09-14

End Date: 2017-09-30

Contract Duration: 3,669 days

Daily Burn Rate: $120.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FY07 ARMY TACTICAL MISSILE SYSTEM (TACMS) PRODUCTION

Place of Performance

Location: GRAND PRAIRIE, DALLAS County, TEXAS, 75051

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $443.2 million to LOCKHEED MARTIN CORPORATION for work described as: FY07 ARMY TACTICAL MISSILE SYSTEM (TACMS) PRODUCTION Key points: 1. Contract awarded for tactical missile system production, indicating a significant investment in defense capabilities. 2. Sole-source award to Lockheed Martin suggests a lack of competitive bidding for this specific system. 3. Long contract duration (2007-2017) implies a sustained need for the TACMS production. 4. The contract's value of over $443 million highlights the substantial financial commitment to this defense program. 5. Fixed-price contract type aims to control costs for the government, though initial pricing is key. 6. The absence of small business participation raises questions about broader economic impact. 7. Production located in Texas, potentially benefiting the regional economy and workforce.

Value Assessment

Rating: fair

Benchmarking the value of this 2007 contract is challenging due to the lack of comparable sole-source awards and the passage of time. The firm fixed-price structure suggests an attempt to cap costs, but without competitive bids, it's difficult to ascertain if the pricing represents optimal value for money. The total award value of over $443 million for TACMS production over a decade indicates a significant investment, but a detailed cost analysis would be needed to assess its fairness against production costs and market alternatives at the time.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This typically occurs when a single contractor possesses unique capabilities or intellectual property essential for the product or service. The lack of competition means that the government did not benefit from potential price reductions or innovative solutions that might have emerged from a bidding process. This approach can be justified for highly specialized defense systems where only one entity can meet the requirements.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government lacks the leverage of competitive pricing. It also limits opportunities for other companies to secure government contracts and potentially offer more cost-effective solutions.

Public Impact

The primary beneficiaries are the Department of Defense and its operational units requiring tactical missile capabilities. The contract delivers the production of the Army Tactical Missile System (TACMS), a key component of ground force offensive capabilities. Geographic impact is concentrated in Texas, where the contractor is located, potentially creating or sustaining jobs in that region. Workforce implications include skilled labor in manufacturing, engineering, and logistics associated with missile production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially impacting long-term cost-effectiveness.
Lack of small business involvement means missed opportunities for economic diversification and support.
Long contract duration could lead to cost overruns if not managed effectively.
Limited transparency due to sole-source nature makes independent value assessment difficult.

Positive Signals

Firm fixed-price contract type provides cost certainty for the government.
Award to a known defense contractor suggests established production capabilities and reliability.
Production in Texas may leverage existing infrastructure and skilled workforce.

Sector Analysis

The defense sector, specifically guided missile and space vehicle manufacturing, is characterized by high technological barriers to entry and significant government investment. Contracts like this are crucial for maintaining national security capabilities. The market is often dominated by a few large prime contractors who possess specialized knowledge and production facilities. Spending benchmarks in this sub-sector are typically in the hundreds of millions to billions of dollars for major weapon systems, reflecting the complexity and cost of development and production.

Small Business Impact

This contract does not appear to have included small business set-asides, as indicated by the 'sb' field being false. The prime contractor, Lockheed Martin, is a large corporation. This means that small businesses were unlikely to have directly participated in fulfilling this contract, either as prime contractors or through significant subcontracting roles. The absence of small business participation limits the opportunity to foster growth within the small business defense industrial base and potentially leverage innovative solutions from smaller, agile companies.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices. Accountability measures would include contract performance reviews, quality assurance checks, and financial audits. Transparency is often limited in sole-source defense contracts, but reporting requirements on production milestones and expenditures would be in place. The Inspector General's office within the DoD would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.

Related Government Programs

Tactical Missile Programs
Guided Missile Manufacturing
Army Weapon Systems
Defense Production Contracts
Lockheed Martin Defense Contracts

Risk Flags

Sole-source award
Lack of competition
Long contract duration
No small business participation indicated

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $443.2 million to LOCKHEED MARTIN CORPORATION. FY07 ARMY TACTICAL MISSILE SYSTEM (TACMS) PRODUCTION

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 $443.2 million.

What is the period of performance?

Start: 2007-09-14. End: 2017-09-30.

What is the historical spending trend for the TACMS program prior to and after this contract?

Analyzing historical spending for the TACMS program requires access to detailed budget data across multiple fiscal years. This specific contract, awarded in FY07 and ending in FY17, represents a significant portion of TACMS production spending during that decade. To understand the trend, one would need to examine prior contracts for TACMS development and procurement, as well as any subsequent contracts for upgrades or continued production. Without that broader dataset, it's difficult to definitively state the trend, but this $443 million award suggests a substantial and sustained investment in TACMS production during this period. It's possible that spending increased leading up to and during this production phase, and then potentially decreased or shifted to sustainment or modernization efforts post-2017, depending on evolving military requirements and budget allocations.

How does the unit cost of TACMS under this contract compare to similar missile systems?

Directly comparing the unit cost of TACMS under this contract to similar missile systems is challenging without specific unit cost data and a clear definition of 'similar.' The TACMS is a specialized tactical missile system, and its production costs are influenced by factors like complexity, quantity, and the specific technology involved. Sole-source contracts, like this one, often lack the transparency needed for precise benchmarking against competitively procured systems. However, general defense industry analyses indicate that advanced missile systems can range from tens of thousands to several hundred thousand dollars per unit, depending on their capabilities (e.g., range, payload, guidance). A detailed analysis would require comparing the total contract value to the number of units produced, factoring in any non-recurring engineering costs or overhead, and then cross-referencing with publicly available data on comparable systems like the ATACMS's predecessors or successors, or other nation's tactical missile programs, while accounting for inflation and technological advancements over time.

What are the key performance metrics or objectives associated with this TACMS production contract?

Key performance metrics and objectives for a tactical missile system production contract like this typically revolve around ensuring the timely delivery of high-quality, fully functional missiles that meet stringent military specifications. Specific objectives would likely include meeting production schedules, adhering to quality control standards to minimize defects, ensuring the reliability and operational readiness of each missile produced, and managing production costs within the firm fixed-price parameters. While not explicitly detailed in the provided data, the contract would implicitly aim to bolster the Army's long-range precision strike capabilities. Performance would be measured against technical requirements, delivery timelines, and adherence to safety and environmental regulations throughout the manufacturing process. Successful completion would mean delivering the contracted quantity of TACMS missiles ready for deployment.

What is Lockheed Martin's track record with producing tactical missile systems for the DoD?

Lockheed Martin has a long and extensive track record of producing tactical missile systems for the Department of Defense, including the TACMS itself. The company is a major defense contractor with significant expertise in missile design, development, and manufacturing. They have been involved in numerous missile programs across various branches of the U.S. military, ranging from air-to-air missiles to long-range strike systems. Their history includes both successful program execution and, like many large defense programs, instances of cost growth or schedule adjustments. For TACMS specifically, Lockheed Martin has been the primary developer and producer, indicating a deep institutional knowledge and established production capability for this particular system, making them a logical, albeit sole-source, choice for continued production.

Were there any specific technological advancements or upgrades incorporated during this contract period?

The provided data does not specify whether technological advancements or upgrades were incorporated into the TACMS production under this particular contract (FY07-FY17). However, it is common for long-duration defense production contracts to include provisions for incorporating upgrades or incorporating lessons learned during the production run to enhance system capabilities or address obsolescence. Such modifications might involve improvements to guidance systems, warheads, or integration with newer platforms. Without specific contract line item details or program documentation, it's impossible to confirm. Often, major upgrades are handled through separate modification contracts or new program starts, but incremental improvements can be integrated into ongoing production runs if deemed necessary and cost-effective by the DoD.

What is the strategic importance of the TACMS program to the U.S. Army's operational capabilities?

The TACMS (Tactical Missile System) holds significant strategic importance for the U.S. Army by providing a critical long-range, precision-strike capability. It allows ground forces to engage high-value targets, such as enemy air defenses, command and control centers, artillery, and troop concentrations, well beyond the reach of conventional artillery. This capability enhances the Army's ability to shape the battlefield, suppress enemy air power, and achieve deep fires effects, thereby supporting maneuver forces and reducing risk to ground troops. The ability to deliver a significant payload accurately at extended ranges is crucial for both offensive operations and defensive deterrence, making TACMS a cornerstone of the Army's precision engagement doctrine.

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

Solicitation ID: W31P4Q07R0063

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 DR, GRAND PRAIRIE, TX, 75051

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $443,235,841

Exercised Options: $443,235,841

Current Obligation: $443,235,841

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline