DoD Awards $92.7M for Obsolete Hellfire Missile Parts to Lockheed Martin, Lacking Competition
Contract Overview
Contract Amount: $92,688,055 ($92.7M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2021-09-27
End Date: 2027-09-30
Contract Duration: 2,194 days
Daily Burn Rate: $42.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: THIS REQUIREMENT IS FOR HELLFIRE M299 LEGACY LAUNCHERS, OBSOLETE COMPONENT PARTS, ANCILLARY EQUIPMENT, AND ENGINEERING SERVICES.
Place of Performance
Location: ORLANDO, ORANGE County, FLORIDA, 32819
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $92.7 million to LOCKHEED MARTIN CORPORATION for work described as: THIS REQUIREMENT IS FOR HELLFIRE M299 LEGACY LAUNCHERS, OBSOLETE COMPONENT PARTS, ANCILLARY EQUIPMENT, AND ENGINEERING SERVICES. Key points: 1. Significant spending on legacy components highlights potential for modernization cost savings. 2. Sole-source award to Lockheed Martin raises concerns about price negotiation and market alternatives. 3. Long contract duration (2027) for obsolete parts suggests a need for strategic obsolescence management. 4. High value for component parts indicates potential for significant cost efficiencies if competition were introduced.
Value Assessment
Rating: questionable
The contract value of $92.7M for legacy parts is substantial. Without competitive bidding, it's difficult to assess if this price is fair compared to potential market alternatives or if it reflects the true cost of obsolete components.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, awarded solely to Lockheed Martin. This lack of competition limits price discovery and may lead to higher costs for the government.
Taxpayer Impact: Taxpayers may be overpaying for obsolete parts due to the absence of competitive pricing mechanisms.
Public Impact
Military readiness may be impacted by reliance on outdated technology. Potential for taxpayer funds to be used inefficiently on legacy systems. Opportunity for defense industrial base innovation by developing modern alternatives. Long-term sustainment costs for aging weapon systems require careful scrutiny.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Obsolete technology
- High contract value for legacy parts
- Long contract duration
Positive Signals
- Definitive contract provides clear terms
- Firm fixed price mitigates cost overrun risk
Sector Analysis
Spending on legacy missile components falls within the Defense sector, specifically guided missile manufacturing. Benchmarks for such specialized, non-competed legacy parts are difficult to establish, but high value suggests potential for cost optimization.
Small Business Impact
The award to Lockheed Martin, a large prime contractor, indicates no direct benefit or participation from small businesses in this specific contract. Opportunities for small businesses may lie in developing alternative or modernized components.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and explore future competitive opportunities. Accountability for justifying the lack of competition and managing the sustainment of legacy systems is crucial.
Related Government Programs
- Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Risk of overpayment due to lack of competition
- Risk of technological obsolescence impacting mission effectiveness
- Risk of continued high sustainment costs for legacy systems
- Lack of transparency regarding procurement justification
Tags
guided-missile-and-space-vehicle-propuls, department-of-defense, fl, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $92.7 million to LOCKHEED MARTIN CORPORATION. THIS REQUIREMENT IS FOR HELLFIRE M299 LEGACY LAUNCHERS, OBSOLETE COMPONENT PARTS, ANCILLARY EQUIPMENT, AND ENGINEERING 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 $92.7 million.
What is the period of performance?
Start: 2021-09-27. End: 2027-09-30.
What is the long-term strategy for phasing out these obsolete Hellfire M299 launchers and their components?
The long-term strategy for phasing out obsolete Hellfire M299 launchers and their components is unclear from this data. Continued investment in legacy parts suggests a prolonged reliance on this system. A comprehensive obsolescence management plan, including timelines for modernization or replacement, is needed to ensure efficient resource allocation and avoid perpetual spending on outdated technology.
Have alternative, more modern missile systems or components been evaluated as replacements for the Hellfire M299?
There is no indication that alternative, more modern missile systems or components have been evaluated as replacements for the Hellfire M299. The sole-source award for obsolete parts suggests a focus on maintaining the existing system rather than pursuing upgrades or replacements. A thorough market research and technology assessment should be conducted to identify and evaluate modern alternatives that could offer improved performance and potentially lower lifecycle costs.
What is the justification for awarding this contract on a sole-source basis, and what steps are being taken to introduce competition in the future?
The justification for this sole-source award is not provided. Typically, sole-source contracts are used when only one responsible source can provide the required supplies or services. Steps to introduce future competition are also not detailed. The Department of Defense should actively seek opportunities to break down requirements, encourage new entrants, or develop specifications that allow for broader competition for sustainment and modernization efforts.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing
Product/Service Code: GUIDED MISSLES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W31P4Q19R0022
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
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: $92,688,055
Exercised Options: $92,688,055
Current Obligation: $92,688,055
Subaward Activity
Number of Subawards: 68
Total Subaward Amount: $37,889,571
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2021-09-27
Current End Date: 2027-09-30
Potential End Date: 2027-09-30 12:09:00
Last Modified: 2026-01-13
More Contracts from Lockheed Martin Corporation
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Department of Defense)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Department of Defense)
- THE Purpose of This Modification IS to Award F-35A Lrip 15 Usaf Aircraft* Long Lead Funding — $30.1B (Department of Defense)
- THE Purpose of This Contract IS to Award Long Lead Funding for F-35A, F-35B, and F-35C Aircraft for U.S. Services, Non-Dod Partners, and FMS Customers — $24.5B (Department of Defense)
- Lrip 11 AAC — $12.3B (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)