DoD's $17.5M Lockheed Martin Contract for Missile Parts Faces Scrutiny Over Competition and Value
Contract Overview
Contract Amount: $17,553,006 ($17.6M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2015-12-01
End Date: 2021-10-22
Contract Duration: 2,152 days
Daily Burn Rate: $8.2K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: IGF::OT::IGF CLS FMS SUPPORT
Place of Performance
Location: GRAND PRAIRIE, DALLAS County, TEXAS, 75051
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $17.6 million to LOCKHEED MARTIN CORPORATION for work described as: IGF::OT::IGF CLS FMS SUPPORT Key points: 1. Significant spending on specialized missile parts, highlighting a niche but critical defense sector. 2. Sole-source award to Lockheed Martin raises questions about competitive pricing and potential cost overruns. 3. Long contract duration (2152 days) suggests a sustained need but also prolonged exposure to pricing risks. 4. Lack of readily available benchmark data makes objective value assessment challenging.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee (CPFF) structure, combined with a sole-source award, makes it difficult to ascertain if the $17.5 million price reflects competitive market rates. Without comparable contract data, the value proposition is uncertain.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was awarded on a sole-source basis, indicating a lack of competition. This limits price discovery and potentially leads to higher costs for taxpayers as the contractor may not be incentivized to offer the lowest possible price.
Taxpayer Impact: The absence of competition in this sole-source award likely results in a higher cost to taxpayers than if the contract had been competitively bid.
Public Impact
Taxpayers fund critical components for guided missile systems, essential for national defense. The contract supports a major defense contractor, Lockheed Martin, contributing to the aerospace and defense industry. Long-term sustainment of defense capabilities relies on such specialized parts procurement.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition.
- Cost-plus contract type can incentivize spending.
- Lack of benchmark data hinders value assessment.
- Long contract duration increases risk exposure.
Positive Signals
- Supports critical defense capabilities.
- Awarded to a known defense prime contractor.
Sector Analysis
This contract falls within the Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing sector. Spending in this niche area is driven by defense needs and technological advancements, often involving specialized, high-cost components.
Small Business Impact
The data indicates this contract was awarded directly to Lockheed Martin Corporation and does not specify any subcontracting to small businesses. Further investigation would be needed to determine if small business participation was a requirement or opportunity.
Oversight & Accountability
The sole-source nature of this contract warrants oversight to ensure fair pricing and prevent potential cost overruns. Regular reviews of performance and cost data are crucial for accountability, especially given the CPFF structure.
Related Government Programs
- Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award
- Cost-plus contract type
- Lack of competition
- Limited benchmark data
- Long contract duration
Tags
other-guided-missile-and-space-vehicle-p, department-of-defense, tx, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $17.6 million to LOCKHEED MARTIN CORPORATION. IGF::OT::IGF CLS FMS SUPPORT
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 $17.6 million.
What is the period of performance?
Start: 2015-12-01. End: 2021-10-22.
What specific factors justified the sole-source award, and were alternatives explored?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Exploring alternatives involves market research to confirm no other capable sources exist or could be developed within the required timeframe. Without this specific justification, it's difficult to assess if the government received the best possible value.
How does the fixed fee in this CPFF contract compare to industry standards for similar defense components?
Assessing the fixed fee's competitiveness is challenging without specific benchmark data for comparable 'Other Guided Missile and Space Vehicle Parts'. CPFF contracts aim to provide the contractor with a reasonable profit margin while incentivizing cost control. However, the effectiveness of this incentive depends heavily on robust government oversight and negotiation.
What is the projected long-term cost implication of this contract, considering its duration and potential for follow-on awards?
The 2152-day duration suggests a significant, ongoing need for these missile parts. This implies substantial taxpayer investment over several years. Furthermore, such long-term contracts can sometimes lead to follow-on awards, potentially locking in costs and limiting future competitive opportunities if not managed strategically.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W31P4Q15R0038
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp
Address: 1701 W MARSHALL DR, GRAND PRAIRIE, TX, 75051
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $23,432,147
Exercised Options: $17,553,006
Current Obligation: $17,553,006
Subaward Activity
Number of Subawards: 97
Total Subaward Amount: $9,854,058
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2015-12-01
Current End Date: 2021-10-22
Potential End Date: 2021-10-22 00:00:00
Last Modified: 2025-07-02
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