DoD's $480M Lockheed Martin Contract for Guided Missiles: A Deep Dive into Value and Competition
Contract Overview
Contract Amount: $480,280,018 ($480.3M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2011-06-10
End Date: 2017-09-29
Contract Duration: 2,303 days
Daily Burn Rate: $208.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: FRP 6 REQUIREMENT
Place of Performance
Location: GRAND PRAIRIE, DALLAS County, TEXAS, 75051
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $480.3 million to LOCKHEED MARTIN CORPORATION for work described as: FRP 6 REQUIREMENT Key points: 1. Significant spending on guided missile manufacturing. 2. Sole-source award to Lockheed Martin raises competition concerns. 3. Long contract duration (2011-2017) may impact price competitiveness. 4. Focus on defense sector spending with potential for taxpayer impact.
Value Assessment
Rating: questionable
The contract value of $480M over six years is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar missile systems.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Lockheed Martin. This lack of competition limits price discovery and may lead to higher costs for the government.
Taxpayer Impact: The absence of competition in this large defense contract raises concerns about potential overspending and the efficient use of taxpayer funds.
Public Impact
Taxpayers may be paying a premium due to the lack of competitive bidding. The Department of Defense relies on this contractor for critical missile systems. Long-term contracts can sometimes lead to complacency and reduced innovation. Oversight is crucial to ensure performance and cost control in sole-source agreements.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Sole-source award
- Long contract duration
Positive Signals
- Definitive contract awarded
- Firm fixed price contract type
Sector Analysis
This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a critical component of the defense industry. Spending benchmarks in this specialized area are often influenced by R&D costs and national security requirements.
Small Business Impact
There is no indication that small businesses were involved in this contract, as it was a sole-source award to a large corporation.
Oversight & Accountability
Given the sole-source nature and significant value, robust oversight is essential to ensure Lockheed Martin meets all contract requirements and that costs remain justified throughout the performance period.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award limits price competition.
- Potential for inflated costs due to lack of competition.
- Long contract duration may reduce contractor urgency.
- Lack of small business participation.
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, tx, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $480.3 million to LOCKHEED MARTIN CORPORATION. FRP 6 REQUIREMENT
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 $480.3 million.
What is the period of performance?
Start: 2011-06-10. End: 2017-09-29.
What was the justification for awarding this contract on a sole-source basis?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or the absence of other capable sources. Without further documentation, it's impossible to definitively state the reason, but it's a critical factor in understanding the value proposition and potential risks associated with this contract.
How does the firm fixed price structure mitigate risk in a sole-source environment?
A firm fixed price (FFP) contract shifts the risk of cost overruns to the contractor. While this protects the government from unexpected price increases, it doesn't inherently guarantee a fair price in a sole-source situation. The initial price negotiation is still paramount.
What performance metrics were established to ensure the effectiveness of the guided missiles produced?
Effectiveness is typically measured through rigorous testing, adherence to technical specifications, and successful deployment. For sole-source contracts, clear and measurable performance standards are even more critical to ensure the government receives the intended value and capability, despite the lack of competitive pressure.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing
Product/Service Code: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W31P4Q11R0014
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, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $480,280,018
Exercised Options: $480,280,018
Current Obligation: $480,280,018
Subaward Activity
Number of Subawards: 11
Total Subaward Amount: $207,560,259
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2011-06-10
Current End Date: 2017-09-29
Potential End Date: 2017-09-29 12:09:00
Last Modified: 2021-05-20
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