DoD Awards $3.16 Billion for 17 Production Lots of HELLFIRE Missiles to Lockheed Martin
Contract Overview
Contract Amount: $3,158,372,223 ($3.2B)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2018-09-29
End Date: 2025-05-31
Contract Duration: 2,436 days
Daily Burn Rate: $1.3M/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: HELLFIRE BUY 17 PRODUCTION.
Place of Performance
Location: ORLANDO, ORANGE County, FLORIDA, 32819
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $3.16 billion to LOCKHEED MARTIN CORPORATION for work described as: HELLFIRE BUY 17 PRODUCTION. Key points: 1. Significant investment in guided missile manufacturing. 2. Sole-source award to Lockheed Martin raises competition concerns. 3. Long-term contract (2018-2025) with potential for price escalation. 4. Focus on fixed-price incentive contract type for cost control.
Value Assessment
Rating: fair
The contract value of $3.16 billion over 2436 days suggests a substantial procurement. Benchmarking against similar missile production contracts is difficult without more specific data on unit counts and configurations, but the scale indicates a significant financial commitment.
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 potentially leads to higher costs for taxpayers compared to a competitive procurement process.
Taxpayer Impact: The lack of competition in this large procurement may result in taxpayers paying a premium for the HELLFIRE missiles.
Public Impact
Ensures continued supply of critical missile systems for defense operations. Supports jobs and economic activity within Lockheed Martin's Florida facilities. Potential for technological advancements in missile production through the fixed-price incentive structure.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price negotiation.
- Long contract duration increases risk of cost overruns.
- Fixed-price incentive contract requires careful monitoring to ensure cost efficiency.
Positive Signals
- Ensures availability of a key defense asset.
- Fixed-price incentive contract aims to balance cost and performance.
- Long-term production run may lead to economies of scale.
Sector Analysis
This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a critical component of the defense industrial base. Spending in this sector is often characterized by high R&D costs, long production cycles, and significant government oversight due to national security implications.
Small Business Impact
The contract data indicates no specific set-aside for small businesses. Large prime contractors like Lockheed Martin often utilize a network of subcontractors, which may include small businesses, but direct analysis of SMB participation is not possible from this data.
Oversight & Accountability
The Department of the Army is the contracting agency, with the Department of Defense overseeing. The fixed-price incentive contract type suggests a need for robust oversight to manage performance and costs effectively throughout the contract's duration.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award
- Lack of competition
- Long contract duration
- Potential for cost overruns
- Limited transparency on unit pricing
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, fl, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $3.16 billion to LOCKHEED MARTIN CORPORATION. HELLFIRE BUY 17 PRODUCTION.
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 $3.16 billion.
What is the period of performance?
Start: 2018-09-29. End: 2025-05-31.
What is the unit cost of the HELLFIRE missiles under this contract, and how does it compare to previous procurements or similar systems?
The provided data does not explicitly state the unit cost or the number of missiles procured. The total award is $3.16 billion over 2436 days. To determine unit cost, we would need the total quantity of missiles. Benchmarking against previous procurements or similar systems would require access to historical contract data and detailed specifications for comparison.
What are the specific performance incentives and cost-sharing mechanisms in this fixed-price incentive contract, and how do they mitigate risk for the government?
The fixed-price incentive (FPI) contract structure implies that both the contractor and the government share in cost savings or overruns beyond target levels, up to a ceiling. Specific details on the target cost, ceiling price, and share ratio are not provided. These mechanisms aim to incentivize the contractor to control costs while ensuring the government does not bear the full burden of unexpected expenses.
What is the justification for the sole-source award, and what steps were taken to ensure fair and reasonable pricing in the absence of competition?
The justification for a sole-source award is not detailed in the provided data. Typically, sole-source procurements are justified by factors such as unique capabilities, urgent needs, or lack of viable alternatives. The government would still be obligated to conduct market research and negotiate to ensure the price is fair and reasonable, often through cost analysis and comparison with independent cost estimates.
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: W31P4Q17R0099
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp
Address: 5600 W SAND LAKE RD # MP-265, ORLANDO, FL, 32819
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: $3,523,674,749
Exercised Options: $3,158,372,223
Current Obligation: $3,158,372,223
Actual Outlays: $31,626,477
Subaward Activity
Number of Subawards: 2021
Total Subaward Amount: $6,307,727,330
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2018-09-29
Current End Date: 2025-05-31
Potential End Date: 2025-05-31 12:05:00
Last Modified: 2025-12-04
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