DoD Awards $422M Lockheed Martin Contract for Guided MLRS Rockets and Support Services
Contract Overview
Contract Amount: $422,252,058 ($422.3M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2017-06-15
End Date: 2021-06-30
Contract Duration: 1,476 days
Daily Burn Rate: $286.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: W31P4Q17C0080 FULL RATE PRODUCTION VII GUIDED MULTIPLE LAUNCH ROCKET SYSTEM ROCKETS AND SUPPORT SERVICES.
Place of Performance
Location: GRAND PRAIRIE, DALLAS County, TEXAS, 75051
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $422.3 million to LOCKHEED MARTIN CORPORATION for work described as: W31P4Q17C0080 FULL RATE PRODUCTION VII GUIDED MULTIPLE LAUNCH ROCKET SYSTEM ROCKETS AND SUPPORT SERVICES. Key points: 1. Significant investment in critical missile defense capabilities. 2. Sole-source award to Lockheed Martin, a dominant player in this sector. 3. Potential for cost overruns due to fixed-price incentive structure. 4. Focus on production and support services for existing systems.
Value Assessment
Rating: good
The contract value of $422.25 million for guided rockets and support services appears reasonable given the specialized nature of the product and the sole-source award. Benchmarking against similar, highly technical defense procurements suggests this pricing is within expected ranges for advanced 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 limits price discovery and competition, potentially leading to higher costs than if multiple vendors were involved. The justification for sole-source is likely based on unique capabilities or existing system integration.
Taxpayer Impact: Taxpayers bear the full cost of this sole-source award, with limited opportunity for competitive pricing to reduce the overall expenditure.
Public Impact
Ensures continued supply of essential munitions for military operations. Supports advanced guided missile technology development and deployment. Impacts national defense readiness and strategic deterrence capabilities. Contributes to the aerospace and defense industrial base.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price negotiation.
- Fixed-price incentive contract carries risk of cost overruns.
- Lack of small business participation noted.
Positive Signals
- Addresses critical defense need for guided rockets.
- Secures long-term production and support services.
- Leverages established manufacturer's expertise.
Sector Analysis
This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a highly specialized area of the defense industry. Spending in this sector is driven by national security priorities and technological advancements, with significant investments often made in sole-source or limited-competition scenarios due to unique capabilities.
Small Business Impact
The data indicates no specific set-aside for small businesses in this contract. Given the specialized nature of guided missile manufacturing and the sole-source award to a large prime contractor, opportunities for small business participation may be limited to subcontracting roles.
Oversight & Accountability
Oversight will be crucial to monitor performance and costs under this fixed-price incentive contract. The Department of Defense's contracting and audit agencies should ensure adherence to contract terms and identify any potential inefficiencies or cost escalations.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award limits competitive pricing.
- Fixed-price incentive contract has cost overrun risk.
- Lack of small business participation.
- Long contract duration (1476 days) increases exposure to market changes.
- Potential for scope creep in support services.
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 $422.3 million to LOCKHEED MARTIN CORPORATION. W31P4Q17C0080 FULL RATE PRODUCTION VII GUIDED MULTIPLE LAUNCH ROCKET SYSTEM ROCKETS AND SUPPORT SERVICES.
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 $422.3 million.
What is the period of performance?
Start: 2017-06-15. End: 2021-06-30.
What is the projected cost growth potential under this fixed-price incentive contract, and what mechanisms are in place to mitigate it?
Fixed-price incentive contracts allow for cost sharing between the government and contractor above a target cost, up to a ceiling. The specific cost growth potential depends on the incentive sharing ratio and the ceiling price. Mitigation mechanisms typically include detailed cost monitoring, performance reviews, and negotiation of firm-fixed-price elements where possible. The contract's 'br' value of 286079 might represent a target or ceiling, requiring further analysis.
What is the justification for the sole-source award, and were alternative solutions or contractors considered?
Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. For advanced defense systems like guided rockets, this often relates to unique technical capabilities, proprietary technology, or the need for compatibility with existing platforms. The Department of Defense would have documented the specific justification, likely related to Lockheed Martin's established expertise and existing production lines for the MLRS.
How does the performance of these guided rockets compare to previous versions or competitor systems in terms of effectiveness and reliability?
Assessing the comparative effectiveness and reliability requires access to performance data, test results, and operational feedback, which is not provided in the contract data. However, the contract's focus on 'FULL RATE PRODUCTION VII' suggests a mature system with a history of successful production and deployment, implying a level of proven effectiveness and reliability based on prior iterations.
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: W31P4Q16R0114
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
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: $422,280,359
Exercised Options: $422,280,359
Current Obligation: $422,252,058
Subaward Activity
Number of Subawards: 375
Total Subaward Amount: $450,375,423
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2017-06-15
Current End Date: 2021-06-30
Potential End Date: 2021-06-30 00:00:00
Last Modified: 2025-12-15
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