DoD Awards $435M to Lockheed Martin for Rocket Propulsion Units, Lacking Competition
Contract Overview
Contract Amount: $435,036,648 ($435.0M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2007-12-27
End Date: 2022-10-31
Contract Duration: 5,422 days
Daily Burn Rate: $80.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: FRP 3 CONTRACT FOR DPICM AND UNITARY ROCKET.
Place of Performance
Location: DALLAS, DALLAS County, TEXAS, 75265
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $435.0 million to LOCKHEED MARTIN CORPORATION for work described as: FRP 3 CONTRACT FOR DPICM AND UNITARY ROCKET. Key points: 1. Significant contract value of $435M awarded. 2. Sole-source award to Lockheed Martin raises competition concerns. 3. Long contract duration of 5422 days (over 14 years). 4. High value in the Guided Missile and Space Vehicle Propulsion sector.
Value Assessment
Rating: questionable
The contract value of $435M is substantial. Benchmarking against similar propulsion unit contracts is difficult without competitive data, but the lack of competition suggests potential for overpricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating 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 likely results in a higher cost to taxpayers than if multiple vendors had vied for the award.
Public Impact
Taxpayers may be paying a premium due to the lack of competitive bidding. The long contract duration could lock in potentially suboptimal pricing for an extended period. Dependence on a single supplier for critical rocket propulsion units poses a supply chain risk.
Waste & Efficiency Indicators
Waste Risk Score: 80 / 10
Warning Flags
- Sole-source award
- Long contract duration
- High contract value
Positive Signals
- Definitive contract type
- Firm Fixed Price contract type
Sector Analysis
This contract falls within the Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing sector. Spending in this specialized area is often characterized by high R&D costs and limited suppliers, but competition is still crucial for cost efficiency.
Small Business Impact
The data indicates this contract was awarded to Lockheed Martin Corporation, a large business. There is no indication of small business participation in this specific award, which is common for large, specialized defense contracts.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny from oversight bodies to ensure the price paid is fair and reasonable. A review of the justification for not competing the contract is essential.
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
- Lack of competition
- Potential for overpricing
- Long contract duration
- Technological obsolescence risk
- Supply chain dependency
Tags
guided-missile-and-space-vehicle-propuls, department-of-defense, tx, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $435.0 million to LOCKHEED MARTIN CORPORATION. FRP 3 CONTRACT FOR DPICM AND UNITARY ROCKET.
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 $435.0 million.
What is the period of performance?
Start: 2007-12-27. End: 2022-10-31.
What was the justification for awarding this contract on a sole-source basis?
The justification for a sole-source award typically involves factors such as unique capabilities, proprietary technology, or urgent needs where only one vendor can meet the requirements. Without access to the specific contract file, the exact reason remains unknown, but it is a critical point for assessing value and necessity.
How does the unit cost compare to similar propulsion systems procured competitively?
Direct comparison of unit costs is challenging without competitive data for this specific contract. However, sole-source awards generally carry a higher risk of inflated pricing compared to contracts that undergo a competitive bidding process. Further analysis would require access to historical pricing data for comparable systems.
What are the risks associated with a 14-year contract for rocket propulsion units?
A 14-year contract duration presents risks including technological obsolescence, potential for price increases over time that outpace inflation, and reduced flexibility to adopt newer, more efficient technologies. It also ties the government to a single supplier for a critical component for an extended period, potentially impacting long-term strategic goals.
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: W31P4Q07R0162
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp
Address: 1701 W MARSHALL DR, GRAND PRAIRIE, TX, 75051
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $870,354,266
Exercised Options: $870,354,266
Current Obligation: $435,036,648
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2007-12-27
Current End Date: 2022-10-31
Potential End Date: 2022-10-31 12:10:00
Last Modified: 2022-09-26
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