DoD awards $18.7M for missile R&D, with limited competition and long-term development

Contract Overview

Contract Amount: $18,717,821 ($18.7M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2021-10-28

End Date: 2026-12-30

Contract Duration: 1,889 days

Daily Burn Rate: $9.9K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: TASK ORDER AWARDED TO LOCKHEED MARTIN MISSILES & FIRE CONTROL FOR THE PERFORMANCE WORK STATEMENT (PWS) ENTITLED, "RECISION STRIKE MISSILE (PRSM) INCREMENT 2 (SPIRAL 1) LONG LEAD ACTIVITIES".

Place of Performance

Location: GRAND PRAIRIE, DALLAS County, TEXAS, 75051

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $18.7 million to LOCKHEED MARTIN CORPORATION for work described as: TASK ORDER AWARDED TO LOCKHEED MARTIN MISSILES & FIRE CONTROL FOR THE PERFORMANCE WORK STATEMENT (PWS) ENTITLED, "RECISION STRIKE MISSILE (PRSM) INCREMENT 2 (SPIRAL 1) LONG LEAD ACTIVITIES". Key points: 1. This contract focuses on long-lead activities for missile development, indicating a phased approach to a complex program. 2. The award to Lockheed Martin suggests a reliance on established defense contractors for critical weapon system advancements. 3. The 'Research and Development in the Physical, Engineering, and Life Sciences' NAICS code points to innovation and early-stage development. 4. A significant duration of nearly 5 years suggests a substantial and potentially evolving scope of work. 5. The Cost Plus Fixed Fee contract type implies that costs will be reimbursed, plus a fixed fee, which can introduce cost-reimbursement risks. 6. The absence of small business set-aside flags indicates this is likely a large-scale, specialized requirement.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without more detailed cost breakdowns and comparisons to similar missile R&D efforts. The Cost Plus Fixed Fee structure means the final cost is not fixed upfront, making direct price comparisons difficult. However, the amount awarded for 'long lead activities' suggests a significant investment in the initial stages of development for a complex weapon system.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'NOT AVAILABLE FOR COMPETITION' status, indicating a sole-source procurement. This typically occurs when only one responsible source can provide the required supplies or services. The lack of competition means that the government did not explore alternative vendors, which can limit price discovery and potentially lead to higher costs.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive bidding, as the government did not leverage market forces to secure the best possible price.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Department of the Army, in enhancing its missile capabilities. The services delivered involve research and development activities crucial for advancing missile technology. The geographic impact is primarily within Texas, where Lockheed Martin's operations are located. Workforce implications include specialized R&D roles for engineers and scientists within Lockheed Martin.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus fixed fee contracts can lead to cost overruns if not closely managed.
Sole-source awards limit competitive pressure, potentially impacting overall value for money.
The long duration of the contract increases the risk of scope creep or changing technological requirements.
The specific nature of missile R&D involves inherent technical risks and potential for delays.

Positive Signals

Award to a major defense contractor like Lockheed Martin suggests access to specialized expertise and established production capabilities.
Focus on 'long lead activities' indicates a structured approach to managing complex development timelines.
The contract supports the advancement of critical defense technology, aligning with national security objectives.

Sector Analysis

This contract falls within the Defense sector, specifically focusing on Research and Development for advanced missile systems. The market for such specialized defense technologies is dominated by a few large, established contractors. Spending in this area is driven by national security priorities and the need for technological superiority. Comparable spending benchmarks would involve other major defense R&D programs for weapon systems.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. This suggests the scope of work is highly specialized and likely requires capabilities only available from large, prime defense contractors.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures would be tied to the achievement of milestones outlined in the Performance Work Statement (PWS) and adherence to the Cost Plus Fixed Fee terms. Transparency may be limited due to the sole-source nature and the sensitive aspects of defense R&D.

Related Government Programs

Missile Defense Systems
Advanced Weapon Systems Development
Department of the Army Research and Development Programs
Lockheed Martin Defense Contracts

Risk Flags

Sole-source award
Cost-plus contract type
Long contract duration
Defense R&D sensitivity

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.7 million to LOCKHEED MARTIN CORPORATION. TASK ORDER AWARDED TO LOCKHEED MARTIN MISSILES & FIRE CONTROL FOR THE PERFORMANCE WORK STATEMENT (PWS) ENTITLED, "RECISION STRIKE MISSILE (PRSM) INCREMENT 2 (SPIRAL 1) LONG LEAD ACTIVITIES".

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 $18.7 million.

What is the period of performance?

Start: 2021-10-28. End: 2026-12-30.

What is the historical spending trend for the Recision Strike Missile (PRSM) program?

The provided data pertains to a specific task order for 'long lead activities' for PRSM Increment 2 (Spiral 1), awarded in October 2021. To understand the historical spending trend for the PRSM program, one would need to examine prior contract awards related to its development and procurement. This would involve searching for previous awards to Lockheed Martin or other entities involved in the PRSM program, potentially across different increments or spirals. Analyzing these historical awards would reveal the total investment over time, identify any significant shifts in spending patterns, and provide context for the current $18.7 million award as part of a larger, ongoing program.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for R&D, and what are its implications for cost control?

Cost Plus Fixed Fee (CPFF) contracts are common in R&D where the scope of work is not precisely defined, and costs are uncertain. In a CPFF contract, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This contrasts with Fixed Price contracts, where the price is set upfront, and Cost Plus Incentive Fee (CPIF) contracts, which include incentives for meeting cost, schedule, or performance targets. For R&D, CPFF offers flexibility, allowing the project to adapt to evolving technical challenges. However, it places a significant burden on the government to closely monitor and audit contractor costs to prevent overruns. The fixed fee provides some incentive for the contractor to control costs, as their profit is capped, but the primary cost control mechanism relies on robust government oversight and auditing.

What are the specific technical risks associated with the PRSM Increment 2 (Spiral 1) long lead activities?

The provided data does not detail the specific technical risks associated with the PRSM Increment 2 (Spiral 1) long lead activities. However, based on the nature of missile development and R&D, potential technical risks could include challenges in achieving desired performance specifications (e.g., range, accuracy, warhead effectiveness), integration issues with existing platforms, material science limitations, software development complexities, and ensuring reliability under various operational conditions. 'Long lead activities' often involve procuring specialized components or conducting foundational research that, if encountering unforeseen technical hurdles, could significantly impact the program's schedule and overall success. A thorough risk assessment would typically be documented within the program's technical reports and acquisition strategy.

What is Lockheed Martin's track record with similar missile development contracts for the Department of Defense?

Lockheed Martin Corporation is a major defense contractor with extensive experience in developing missile systems for the Department of Defense. They are known for producing a wide range of missiles, including air-to-air, air-to-ground, ballistic, and tactical missiles. Their track record includes programs like the Patriot missile defense system, the Javelin anti-tank missile, and various strategic missile programs. While specific performance metrics for past contracts are not detailed here, Lockheed Martin's continued success in securing large, complex missile development contracts indicates a generally strong track record in delivering advanced weapon systems, though like any large contractor, they may have faced challenges or delays on specific programs.

How does the $18.7 million award compare to the total estimated cost or budget for the PRSM Increment 2 program?

The $18.7 million award represents funding for 'long lead activities' for PRSM Increment 2 (Spiral 1). This amount is likely a portion of the overall program budget, not the total cost. Without access to the full program acquisition documents, including the total estimated cost (TEC) or the program's overall budget allocation, it is impossible to definitively compare this award to the entire program's financial scope. However, given that missile development is a costly endeavor, $18.7 million for initial long-lead activities suggests that the total program cost could be significantly higher, potentially in the hundreds of millions or even billions of dollars, depending on the increment's scope and production quantities.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W31P4Q21R0006

Pricing Type: COST PLUS FIXED FEE (U)

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: $18,717,821

Exercised Options: $18,717,821

Current Obligation: $18,717,821

Subaward Activity

Number of Subawards: 27

Total Subaward Amount: $21,457,625

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W31P4Q22D0002

IDV Type: IDC

Timeline