DoD awards $150M Lockheed Martin contract for PAC-3 missile recertification and repair for Taiwan FMS
Contract Overview
Contract Amount: $150,400,000 ($150.4M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2022-06-30
End Date: 2027-06-30
Contract Duration: 1,826 days
Daily Burn Rate: $82.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: RECERTIFICATION AND REPAIR SERVICES FOR PHASED ARRAY TRACKING RADAR TO INTERCEPT ON TARGET (PATRIOT) ADVANCED CAPABILITY-3 (PAC-3) FOREIGN MILITARY SALES (FMS) MISSILES FOR TAIWAN
Place of Performance
Location: GRAND PRAIRIE, DALLAS County, TEXAS, 75051
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $150.4 million to LOCKHEED MARTIN CORPORATION for work described as: RECERTIFICATION AND REPAIR SERVICES FOR PHASED ARRAY TRACKING RADAR TO INTERCEPT ON TARGET (PATRIOT) ADVANCED CAPABILITY-3 (PAC-3) FOREIGN MILITARY SALES (FMS) MISSILES FOR TAIWAN Key points: 1. This contract focuses on critical sustainment for Taiwan's air defense capabilities. 2. Lockheed Martin is the sole provider for PAC-3 missile recertification and repair. 3. The contract carries significant geopolitical risk due to its FMS nature. 4. Spending falls within the Guided Missile and Space Vehicle Manufacturing sector.
Value Assessment
Rating: questionable
The contract's value of $150M for recertification and repair services is substantial. Without specific benchmarks for PAC-3 missile maintenance, it's difficult to definitively assess pricing fairness against similar, if any, 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 lack of competition limits price discovery and potentially leads to higher costs for the government.
Taxpayer Impact: Taxpayer funds are used for this Foreign Military Sale, impacting the overall defense budget and potentially reducing funds available for domestic programs.
Public Impact
Enhances Taiwan's air defense capabilities against potential threats. Supports a key U.S. ally in a strategically important region. Ensures the operational readiness of advanced missile systems. Represents a significant U.S. commitment to regional security.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price negotiation.
- Foreign Military Sale adds geopolitical complexity and risk.
- Long contract duration (5 years) may not reflect evolving needs or technology.
Positive Signals
- Ensures critical readiness for a key U.S. ally.
- Supports advanced U.S. defense technology abroad.
- Provides essential sustainment for a high-value weapons system.
Sector Analysis
This contract falls under the Guided Missile and Space Vehicle Manufacturing sector, a specialized area within defense manufacturing. Spending benchmarks for sustainment services of this nature are highly specific to the platform and provider.
Small Business Impact
This contract was awarded directly to Lockheed Martin Corporation and does not appear to involve subcontracting opportunities for small businesses. The specialized nature of missile system maintenance often limits broad small business participation.
Oversight & Accountability
The Department of the Army, under the Department of Defense, is responsible for this contract. Oversight would focus on ensuring timely delivery of services, adherence to specifications, and proper financial management, especially given the sole-source nature.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award
- Foreign Military Sale (FMS)
- Geopolitical risk
- Potential for cost overruns without competition
- Long-term sustainment dependency
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, tx, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $150.4 million to LOCKHEED MARTIN CORPORATION. RECERTIFICATION AND REPAIR SERVICES FOR PHASED ARRAY TRACKING RADAR TO INTERCEPT ON TARGET (PATRIOT) ADVANCED CAPABILITY-3 (PAC-3) FOREIGN MILITARY SALES (FMS) MISSILES FOR TAIWAN
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 $150.4 million.
What is the period of performance?
Start: 2022-06-30. End: 2027-06-30.
What is the justification for the sole-source award, and what steps were taken to ensure fair pricing without competition?
The justification for a sole-source award typically stems from the unique capabilities or proprietary nature of the product or service, where only one vendor can provide it. For PAC-3 missile recertification and repair, Lockheed Martin is likely the sole entity with the necessary technical data, tooling, and expertise. The government would have conducted a price analysis based on historical data, cost breakdowns, and potentially comparisons to similar, albeit not identical, services to ensure the price was fair and reasonable.
What are the specific risks associated with providing maintenance for advanced missile systems to a foreign military, and how are they mitigated?
Risks include potential technology transfer concerns, ensuring the security of sensitive defense articles, and the geopolitical implications of supporting a foreign military's readiness. Mitigation strategies involve strict adherence to FMS guidelines, export control regulations, robust cybersecurity measures, and clear contractual terms regarding intellectual property and end-use. Continuous monitoring by the DoD and State Department is crucial.
How does this contract contribute to the overall effectiveness and readiness of Taiwan's defense posture, and what is the long-term outlook?
This contract is vital for maintaining the operational effectiveness of Taiwan's PAC-3 missile defense system, a cornerstone of its air defense strategy. It ensures that these critical assets remain functional and capable of responding to threats. The long-term outlook depends on evolving geopolitical dynamics, potential upgrades to the PAC-3 system, and Taiwan's continued investment in its defense capabilities, potentially leading to future sustainment or upgrade contracts.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing
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: W31P4Q22R0016
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: $307,100,000
Exercised Options: $150,400,000
Current Obligation: $150,400,000
Subaward Activity
Number of Subawards: 33
Total Subaward Amount: $76,618,080
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2022-06-30
Current End Date: 2027-06-30
Potential End Date: 2027-06-30 12:06:00
Last Modified: 2025-10-27
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)