DoD Awards $43.2M for PAC-3 Missile Support to Lockheed Martin, Lacking Competition
Contract Overview
Contract Amount: $43,235,672 ($43.2M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2021-05-01
End Date: 2024-12-31
Contract Duration: 1,340 days
Daily Burn Rate: $32.3K/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 $43.2 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. High-value contract for critical missile support systems. 2. Sole-source award to Lockheed Martin raises competition concerns. 3. Significant taxpayer investment in advanced defense technology. 4. Sector focus on guided missile manufacturing and support.
Value Assessment
Rating: fair
The contract value of $43.2M for PAC-3 missile support appears substantial. Benchmarking against similar sole-source sustainment contracts for advanced weapon systems is necessary to assess pricing fairness.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Lockheed Martin. The lack of competition limits price discovery and potentially increases costs for the government.
Taxpayer Impact: The sole-source nature of this award may result in higher costs for taxpayers compared to a competitively bid contract.
Public Impact
Ensures continued operational readiness of the PAC-3 missile defense system. Supports both U.S. military and foreign military sales customers. Maintains critical sustainment capabilities for a key defense asset.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Cost-plus contract type
Positive Signals
- Essential defense system support
- Long-term contract duration
Sector Analysis
This contract falls within the defense sector, specifically supporting advanced guided missile systems. Spending in this area is critical for national security but often involves high costs due to specialized technology and limited suppliers.
Small Business Impact
The data indicates this contract was not awarded to small businesses, as both the prime contractor and the nature of the work suggest large-scale defense manufacturing and support.
Oversight & Accountability
Oversight is crucial for sole-source, cost-plus contracts to ensure fair pricing and prevent cost overruns. The Department of the Army's contracting activity requires diligent monitoring of performance and expenditures.
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 competition.
- Cost-plus contract type can lead to cost overruns.
- Potential for reduced price discovery.
- 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 $43.2 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 $43.2 million.
What is the period of performance?
Start: 2021-05-01. End: 2024-12-31.
What is the justification for the sole-source award, and what steps are being taken to ensure fair pricing?
The justification for a sole-source award typically involves unique capabilities or proprietary technology. The government should conduct thorough price analyses, potentially using historical data or independent cost estimates, to ensure the negotiated price is fair and reasonable. Regular audits and performance reviews are also essential to manage costs effectively under a cost-plus incentive fee structure.
How does the cost-plus incentive fee structure impact the contractor's efficiency and the overall cost to the government?
A cost-plus incentive fee (CPIF) contract aims to incentivize the contractor to control costs by sharing in any savings or overruns against a target. This structure can encourage efficiency, but it also requires robust government oversight to set realistic targets and monitor performance. The government bears the risk of cost overruns if targets are not met, making effective negotiation and monitoring critical.
What is the long-term strategy for ensuring competitive sourcing for future PAC-3 missile support requirements?
Given the critical nature of the PAC-3 system, the government should explore strategies to foster future competition, such as encouraging second-sourcing, investing in alternative technologies, or developing organic government capabilities. Market research and early engagement with potential suppliers can help identify opportunities to introduce competition and reduce long-term reliance on a single provider.
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
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: $43,235,672
Exercised Options: $43,235,672
Current Obligation: $43,235,672
Subaward Activity
Number of Subawards: 5
Total Subaward Amount: $18,516,884
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: 2021-05-01
Current End Date: 2024-12-31
Potential End Date: 2024-12-31 12:12:00
Last Modified: 2024-04-11
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