DoD Awards $1.21B for Guided Missiles to Lockheed Martin, Highlighting Fixed Price Incentive Contract
Contract Overview
Contract Amount: $121,122,084 ($121.1M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2008-09-11
End Date: 2010-12-10
Contract Duration: 820 days
Daily Burn Rate: $147.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: GUIDED MISSILES
Place of Performance
Location: ORLANDO, ORANGE County, FLORIDA, 32819
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $121.1 million to LOCKHEED MARTIN CORPORATION for work described as: GUIDED MISSILES Key points: 1. Significant contract value of $1.21 billion for guided missiles. 2. Awarded to a single, dominant contractor, Lockheed Martin Corporation. 3. Contract type is Fixed Price Incentive, suggesting shared risk and reward. 4. Sector is Defense, specifically Guided Missile and Space Vehicle Manufacturing.
Value Assessment
Rating: good
The contract value of $1.21 billion is substantial. While specific pricing details are not provided, the Fixed Price Incentive (FPI) structure aims to balance cost control with contractor performance, suggesting a reasonable approach for this type of complex procurement.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This competitive process is generally expected to drive better pricing and value for the government.
Taxpayer Impact: The competitive award process for this $1.21 billion contract aims to ensure taxpayer funds are used efficiently for critical defense capabilities.
Public Impact
Ensures continued supply of essential guided missile technology for the U.S. Army. Supports advanced manufacturing capabilities within the defense industrial base. Potential for technological advancements through the incentive-based contract structure.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Fixed Price Incentive contracts can lead to cost overruns if not managed carefully.
- Sole reliance on Lockheed Martin for this specific missile system could pose supply chain risks.
- Contract duration of over two years requires ongoing monitoring.
Positive Signals
- Awarded through full and open competition.
- Contract aims to incentivize contractor performance.
- Significant investment in critical defense capabilities.
Sector Analysis
The Guided Missile and Space Vehicle Manufacturing sector is a highly specialized and critical part of the defense industry. Spending in this area is typically characterized by high R&D costs, long production cycles, and significant government oversight due to national security implications.
Small Business Impact
This contract was awarded to Lockheed Martin Corporation, a large prime contractor. There is no direct indication of small business participation in the provided data, which is common for large prime contracts where subcontracts are managed by the prime.
Oversight & Accountability
The contract is managed by the Department of the Army, a component of the Department of Defense, which has established oversight mechanisms for large-value defense procurements. The Fixed Price Incentive structure implies performance metrics that would be subject to review.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- High contract value.
- Fixed Price Incentive contract type.
- Awarded to a single prime contractor.
- Long contract duration (over 2 years).
- Critical defense technology.
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, fl, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $121.1 million to LOCKHEED MARTIN CORPORATION. GUIDED MISSILES
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 $121.1 million.
What is the period of performance?
Start: 2008-09-11. End: 2010-12-10.
What specific performance metrics are tied to the incentive portion of this Fixed Price Incentive contract, and how do they align with the Army's operational requirements?
The Fixed Price Incentive (FPI) contract structure implies that the final price is determined by the contractor's ability to meet or exceed certain performance targets, such as delivery schedules, quality standards, or technical specifications. For this guided missile contract, these metrics likely relate to missile reliability, accuracy, range, and timely delivery to support Army operations. The alignment with operational requirements would be assessed through the initial contract negotiation and ongoing program management reviews by the Army Contracting Command.
Given the sole award to Lockheed Martin, what are the contingency plans for supply chain disruptions or potential single-source dependency risks for these guided missiles?
While awarded under full and open competition, the single award to Lockheed Martin necessitates robust contingency planning. The Department of Defense typically addresses single-source dependency by encouraging the development of alternative suppliers or technologies, maintaining strategic stockpiles, and implementing strict oversight of the prime contractor's supply chain. For critical systems like guided missiles, the Army would likely have established risk mitigation strategies, including supplier diversification at the sub-contractor level and continuous monitoring of geopolitical and manufacturing risks.
How does the $1.21 billion expenditure on guided missiles compare to historical spending trends and projected future needs within the Department of the Army's missile defense programs?
The $1.21 billion award represents a significant investment in guided missile capabilities. To assess its comparative value, it should be benchmarked against previous awards for similar systems and the overall budget allocated to missile defense within the Army's portfolio. Historical data would reveal if this represents an increase or decrease in spending intensity. Projections would consider evolving threat landscapes, technological advancements, and strategic modernization goals, indicating whether this investment aligns with future requirements or if it's a one-time surge purchase.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing
Product/Service Code: GUIDED MISSLES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: W31P4Q08R0184
Offers Received: 2
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: 5600 W SAND LAKE RD MP125, ORLANDO, FL, 90
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $121,122,084
Exercised Options: $121,122,084
Current Obligation: $121,122,084
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2008-09-11
Current End Date: 2010-12-10
Potential End Date: 2010-12-10 00:00:00
Last Modified: 2011-07-28
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