DoD Awards $63.4M for PAC-3 Missile Support, Sole-Sourced to Lockheed Martin
Contract Overview
Contract Amount: $63,383,175 ($63.4M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2020-06-25
End Date: 2025-03-31
Contract Duration: 1,740 days
Daily Burn Rate: $36.4K/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 $63.4 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. Contract focuses on critical PAC-3 missile support for US and FMS customers. 2. Sole-source award to Lockheed Martin raises questions about competition and price discovery. 3. Significant taxpayer investment in advanced missile defense capabilities. 4. Potential for cost overruns given the Cost Plus Incentive Fee structure.
Value Assessment
Rating: fair
The contract's Cost Plus Incentive Fee (CPIF) structure allows for shared savings but can also lead to higher costs if targets are not met efficiently. Benchmarking against similar sole-source missile support contracts is difficult without more data.
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 compared to a competitive process.
Taxpayer Impact: The sole-source nature of this award means taxpayers may not be receiving the best possible price for essential missile support services.
Public Impact
Ensures continued operational readiness of the critical PAC-3 missile defense system. Supports both U.S. national security and allied military capabilities through Foreign Military Sales. Invests in advanced technology crucial for countering evolving threats.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition.
- CPIF contract type can lead to cost overruns.
- Lack of small business participation noted.
Positive Signals
- Supports critical national defense asset.
- Addresses U.S. and allied security needs.
- Long-term support contract ensures sustainment.
Sector Analysis
This contract falls within the defense sector, specifically focusing on guided missile and space vehicle parts. Spending in this area is driven by national security requirements and technological advancements in defense systems.
Small Business Impact
The data indicates no specific set-aside for small businesses, and the prime contractor is a large corporation. This suggests limited direct opportunities for small businesses on this particular contract, though they may participate as subcontractors.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure cost reasonableness and performance standards are met. The Department of the Army's contracting activity should monitor the CPIF structure closely.
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 Incentive Fee contract type
- Lack of small business participation
- Potential for cost overruns
- Reliance on a single contractor for critical support
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 $63.4 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 $63.4 million.
What is the period of performance?
Start: 2020-06-25. End: 2025-03-31.
What is the projected cost efficiency of the CPIF contract structure for this PAC-3 missile support, and how will performance be measured to ensure value for taxpayer dollars?
The Cost Plus Incentive Fee (CPIF) structure aims to incentivize Lockheed Martin to control costs by sharing savings if actual costs fall below target costs. However, the effectiveness hinges on the realism of the initial cost targets and the rigor of performance metrics. The Department of the Army must establish clear, measurable performance standards and closely monitor expenditures against targets to ensure cost efficiency and prevent potential overruns.
Given the sole-source nature of this award, what steps are being taken to mitigate the risk of inflated pricing and ensure fair market value for the PAC-3 missile support services?
The sole-source award inherently limits price competition. To mitigate pricing risks, the Department of the Army should conduct thorough cost and price analyses, potentially using historical data from similar contracts or independent cost estimates. Robust negotiation strategies and stringent contract surveillance are crucial to ensure that Lockheed Martin's pricing is fair and reasonable, reflecting the value delivered without the benefit of competitive pressure.
How does this contract contribute to the overall effectiveness and readiness of the U.S. missile defense capabilities, and what are the key performance indicators for success?
This contract is vital for maintaining the operational readiness and effectiveness of the PAC-3 missile defense system, a key component of U.S. air and missile defense. Its success is measured by ensuring the availability, reliability, and performance of PAC-3 missiles and associated support infrastructure. Key performance indicators likely include on-time delivery of support services, system uptime, defect rates, and responsiveness to operational needs.
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: $63,383,175
Exercised Options: $63,383,175
Current Obligation: $63,383,175
Subaward Activity
Number of Subawards: 17
Total Subaward Amount: $175,060,426
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: 2020-06-25
Current End Date: 2025-03-31
Potential End Date: 2025-03-31 12:03:00
Last Modified: 2025-09-29
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