DoD Awards $63.1M for PAC-3 Missile Support, Sole-Sourced to Lockheed Martin
Contract Overview
Contract Amount: $63,131,094 ($63.1M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2019-06-09
End Date: 2025-12-12
Contract Duration: 2,378 days
Daily Burn Rate: $26.5K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: THIS CONTRACT IS FOR PATRIOT ADVANCED CAPABILITY-3 (PAC-3) MISSILE SUPPORT CENTER (P3MSC) FOR THE US AND FOREIGN MILITARY SALES (FMS) CUSTOMERS.
Place of Performance
Location: GRAND PRAIRIE, DALLAS County, TEXAS, 75051
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $63.1 million to LOCKHEED MARTIN CORPORATION for work described as: THIS CONTRACT IS FOR PATRIOT ADVANCED CAPABILITY-3 (PAC-3) MISSILE SUPPORT CENTER (P3MSC) FOR THE US AND FOREIGN MILITARY SALES (FMS) CUSTOMERS. Key points: 1. Significant contract value for critical missile defense system. 2. Sole-source award raises questions about competition and pricing. 3. Long-term support contract (2019-2025) indicates ongoing need. 4. Focus on FMS customers highlights international defense cooperation.
Value Assessment
Rating: questionable
The contract value of $63.1M for PAC-3 missile support is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar defense sustainment contracts.
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 the government and FMS customers.
Taxpayer Impact: The lack of competition may result in taxpayers bearing a higher cost for essential missile defense support.
Public Impact
Ensures continued operational readiness of the PAC-3 missile defense system. Supports U.S. national security and allied defense capabilities. Potential for higher costs due to sole-source nature impacts defense budget allocation.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Cost-plus contract type
Positive Signals
- Critical defense system support
- Long-term contract duration
- Supports FMS customers
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 often characterized by high R&D costs and limited suppliers, making sole-source awards more common but still requiring scrutiny.
Small Business Impact
The contract was awarded to Lockheed Martin Corporation, a large prime contractor. There is no indication of small business participation in this specific award, which is common for highly specialized defense systems.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure pricing remains reasonable and performance meets requirements. The Department of the Army is the contracting activity.
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 limits price competition.
- Cost-plus contract type can lead to cost overruns.
- Lack of small business participation.
- Long contract duration may obscure current market pricing.
Tags
other-guided-missile-and-space-vehicle-p, department-of-defense, tx, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $63.1 million to LOCKHEED MARTIN CORPORATION. THIS CONTRACT IS FOR PATRIOT ADVANCED CAPABILITY-3 (PAC-3) MISSILE SUPPORT CENTER (P3MSC) FOR THE US AND FOREIGN MILITARY SALES (FMS) CUSTOMERS.
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 $63.1 million.
What is the period of performance?
Start: 2019-06-09. End: 2025-12-12.
What is the justification for the sole-source award, and have alternative solutions been explored?
Sole-source awards typically require a justification, such as a lack of adequate competition or unique capabilities. The Department of Defense should provide documentation detailing why Lockheed Martin was the only viable source for PAC-3 missile support and what steps were taken to explore competitive options before this decision was made.
How is the cost-plus incentive fee structure being managed to control expenses?
The Cost Plus Incentive Fee (CPIF) structure aims to incentivize the contractor to control costs by sharing savings or cost overruns. Effective management requires robust government oversight of cost reporting, performance metrics, and incentive targets to ensure alignment with taxpayer interests and mission success.
What is the long-term strategy for ensuring competitive sourcing for future PAC-3 sustainment needs?
Given the critical nature of the PAC-3 system, the government should proactively plan for future sustainment. This includes exploring opportunities to foster competition, potentially through technology insertion, developing alternative support capabilities, or encouraging new entrants into the market over the contract's lifecycle.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: COST PLUS INCENTIVE FEE (V)
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: $63,131,094
Exercised Options: $63,131,094
Current Obligation: $63,131,094
Subaward Activity
Number of Subawards: 38
Total Subaward Amount: $342,443,002
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W31P4Q17D0026
IDV Type: IDC
Timeline
Start Date: 2019-06-09
Current End Date: 2025-12-12
Potential End Date: 2025-12-12 00:00:00
Last Modified: 2025-06-10
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