DoD awards $30.7M for HIMARS/MLRS fleet maintenance to Lockheed Martin, raising competition concerns
Contract Overview
Contract Amount: $30,713,626 ($30.7M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2020-11-12
End Date: 2025-11-14
Contract Duration: 1,828 days
Daily Burn Rate: $16.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: THIS REQUIREMENT IS FOR SCHEDULED/UNSCHEDULED MAINTENANCE OF THE M142 HIGH MOBILITY ARTILLERY ROCKET SYSTEM (HIMARS)AND M270 MULTIPLE LAUNCH ROCKET SYSTEM (MLRS) TEST FLEET.
Place of Performance
Location: GRAND PRAIRIE, DALLAS County, TEXAS, 75051
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $30.7 million to LOCKHEED MARTIN CORPORATION for work described as: THIS REQUIREMENT IS FOR SCHEDULED/UNSCHEDULED MAINTENANCE OF THE M142 HIGH MOBILITY ARTILLERY ROCKET SYSTEM (HIMARS)AND M270 MULTIPLE LAUNCH ROCKET SYSTEM (MLRS) TEST FLEET. Key points: 1. The contract focuses on specialized maintenance for critical missile systems. 2. Sole-source award to Lockheed Martin, the original equipment manufacturer, limits competitive pricing. 3. High value suggests significant operational reliance on these systems. 4. Potential for cost overruns due to lack of competition.
Value Assessment
Rating: questionable
The $30.7 million award is for a critical defense system. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential market alternatives or if it reflects fair market value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded sole-source to Lockheed Martin, the OEM. This approach bypasses competitive bidding, potentially leading to higher prices and reduced price discovery.
Taxpayer Impact: Taxpayer funds are committed without exploring potentially more cost-effective options through competition.
Public Impact
Ensures readiness of vital HIMARS and MLRS artillery systems. Supports ongoing military operations and training. Maintains the operational capability of a key defense asset. Potential for increased defense spending without competitive pressure.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for price escalation
Positive Signals
- Ensures critical system maintenance
- Long-term contract provides stability
Sector Analysis
This contract falls under Engineering Services (NAICS 541330) for the defense sector. Spending benchmarks for specialized military hardware maintenance are often high due to unique requirements and limited suppliers.
Small Business Impact
The contract was awarded directly to Lockheed Martin Corporation, a large prime contractor. There is no indication of subcontracting opportunities for small businesses within this sole-source award.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and prevent potential cost creep. Accountability for performance and cost management is crucial.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award limits competition.
- Potential for higher costs without competitive bidding.
- Lack of transparency in price negotiation.
- Dependency on a single contractor.
- No small business participation noted.
Tags
engineering-services, department-of-defense, tx, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $30.7 million to LOCKHEED MARTIN CORPORATION. THIS REQUIREMENT IS FOR SCHEDULED/UNSCHEDULED MAINTENANCE OF THE M142 HIGH MOBILITY ARTILLERY ROCKET SYSTEM (HIMARS)AND M270 MULTIPLE LAUNCH ROCKET SYSTEM (MLRS) TEST FLEET.
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 $30.7 million.
What is the period of performance?
Start: 2020-11-12. End: 2025-11-14.
What is the justification for the sole-source award, and were alternative acquisition strategies considered?
The justification for a sole-source award typically stems from unique capabilities or proprietary technology held by a single entity. For the HIMARS/MLRS fleet, Lockheed Martin, as the OEM, likely possesses the specialized knowledge and tooling. However, the agency should have explored options like competitive prototyping or performance-based contracts to introduce some level of competition or ensure fair pricing.
What are the risks associated with relying solely on the OEM for maintenance of critical defense systems?
The primary risk is the potential for inflated costs due to the absence of competitive pressure. This can lead to inefficient use of taxpayer funds. Additionally, over-reliance on a single supplier can create vulnerabilities in the supply chain and reduce flexibility in adapting to new technologies or operational needs.
How will the effectiveness of this maintenance contract be measured, especially given the lack of competition?
Effectiveness can be measured through key performance indicators (KPIs) such as system uptime, turnaround time for repairs, adherence to maintenance schedules, and overall fleet readiness rates. The contract should include robust performance metrics and penalties for non-compliance, even in a sole-source scenario, to ensure accountability and value for money.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W31P4Q19R0021
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
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: $33,659,067
Exercised Options: $30,713,626
Current Obligation: $30,713,626
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2020-11-12
Current End Date: 2025-11-14
Potential End Date: 2025-11-14 00:00:00
Last Modified: 2025-12-15
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