Lockheed Martin awarded $36.6M for Air-to-Ground Missile Systems Engineering Services by the Department of the Army
Contract Overview
Contract Amount: $36,650,276 ($36.7M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2023-08-01
End Date: 2027-09-16
Contract Duration: 1,507 days
Daily Burn Rate: $24.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: AIR-TO-GOUND MISSILE SYSTEMS (AGMS) ENGINEERING SERVICES.
Place of Performance
Location: ORLANDO, ORANGE County, FLORIDA, 32819
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $36.7 million to LOCKHEED MARTIN CORPORATION for work described as: AIR-TO-GOUND MISSILE SYSTEMS (AGMS) ENGINEERING SERVICES. Key points: 1. Contract awarded to a single, established defense contractor, indicating potential for limited competition. 2. The contract type is Cost Plus Fixed Fee, which can present cost control challenges. 3. Performance is concentrated in Florida, suggesting a localized economic impact. 4. The duration of the contract is over four years, implying a long-term need for these services. 5. The award value is substantial, reflecting the critical nature of missile systems engineering.
Value Assessment
Rating: fair
The contract's Cost Plus Fixed Fee structure requires careful monitoring to ensure cost efficiency. Benchmarking against similar engineering services contracts for complex defense systems is difficult without more granular data on the specific services provided. The fixed fee component offers some cost predictability, but the cost-reimbursement aspect necessitates robust oversight to prevent overruns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning there was no open competition. This approach is typically used when a specific contractor possesses unique capabilities or when urgency dictates. The lack of competition means that price discovery through market forces was not utilized, potentially leading to higher costs than if multiple bids were solicited.
Taxpayer Impact: Taxpayers may not have received the best possible price due to the absence of competitive bidding. The government relied on negotiation to establish terms, which can be less advantageous than a competitive process.
Public Impact
The Department of the Army benefits from specialized engineering expertise for critical air-to-ground missile systems. This contract supports the development, sustainment, and enhancement of advanced missile technologies. The primary geographic impact is in Florida, where the contractor's operations are located. The contract likely supports a specialized engineering workforce within Lockheed Martin.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type can lead to cost overruns if not managed tightly.
- Sole-source award limits price competition and potentially increases costs for taxpayers.
- Concentration of work in one state may limit broader economic benefits.
- Long contract duration requires sustained oversight to ensure continued value.
Positive Signals
- Award to a prime defense contractor with established expertise in missile systems.
- Definitive contract type provides a clear framework for services.
- Long-term nature suggests a sustained and critical need for these services.
Sector Analysis
This contract falls within the Defense Engineering Services sector, a critical component of the aerospace and defense industry. This sector is characterized by high barriers to entry, specialized technical expertise, and significant government investment. Comparable spending in this area is substantial, reflecting the ongoing need for advanced military technology development and sustainment. The market is dominated by a few large, established defense contractors.
Small Business Impact
This contract does not appear to have a small business set-aside component, nor is there information indicating significant subcontracting opportunities for small businesses. The award to a large prime contractor suggests that the primary focus is on leveraging established capabilities rather than fostering small business participation through this specific award.
Oversight & Accountability
Oversight for this contract will likely be managed by the Department of the Army contracting and program management offices. Accountability measures are embedded within the Cost Plus Fixed Fee structure, requiring detailed cost reporting and justification. Transparency may be limited due to the sole-source nature and the sensitive defense-related aspects of the work.
Related Government Programs
- Air-to-Ground Missile Programs
- Defense Engineering Services
- Aerospace and Defense Contracting
- Lockheed Martin Contracts
Risk Flags
- Sole-source award limits competition.
- Cost Plus Fixed Fee contract type carries inherent cost overrun risk.
- Lack of detailed service breakdown hinders value assessment.
- Concentration of work in one state.
Tags
defense, department-of-defense, department-of-the-army, engineering-services, air-to-ground-missile-systems, lockheed-martin-corporation, cost-plus-fixed-fee, sole-source, definitive-contract, florida, missile-systems, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $36.7 million to LOCKHEED MARTIN CORPORATION. AIR-TO-GOUND MISSILE SYSTEMS (AGMS) 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 $36.7 million.
What is the period of performance?
Start: 2023-08-01. End: 2027-09-16.
What is the specific breakdown of engineering services to be provided under this contract?
The provided data indicates the contract is for 'AIR-TO-GOUND MISSILE SYSTEMS (AGMS) ENGINEERING SERVICES.' However, a detailed breakdown of specific services such as design, testing, analysis, integration, or sustainment is not available in the summary data. These services are critical for ensuring the performance, reliability, and modernization of the Army's missile arsenal. Understanding the precise nature of the engineering tasks would allow for a more accurate assessment of value and risk, and enable better benchmarking against similar specialized engineering efforts within the defense sector.
How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for similar defense engineering services?
Cost Plus Fixed Fee (CPFF) contracts are common in defense acquisition, particularly for research and development or services where the scope is not fully defined at the outset. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This differs from Fixed Price contracts, where the price is set regardless of costs, and Cost Plus Incentive Fee (CPIF) contracts, which include incentives for performance. While CPFF offers flexibility, it carries a higher risk of cost overruns compared to fixed-price arrangements if cost controls are not rigorously enforced by the government. For highly complex or uncertain engineering tasks, CPFF can be appropriate, but it necessitates strong government oversight to manage costs effectively.
What is the historical spending pattern for Air-to-Ground Missile Systems (AGMS) engineering services by the Department of the Army?
Analyzing historical spending patterns for AGMS engineering services by the Department of the Army would provide crucial context for this $36.6 million award. Without historical data, it's difficult to determine if this contract represents an increase, decrease, or stable level of investment in these services. Understanding past expenditures, including the number of contracts awarded, their values, and the contractors involved, can reveal trends in technology development, sustainment needs, and overall budget allocation for missile systems. This information is vital for assessing the current contract's significance and ensuring efficient use of taxpayer funds over time.
What are the specific performance metrics and milestones associated with this contract?
The provided summary does not detail the specific performance metrics or milestones for this $36.6 million contract. For a Cost Plus Fixed Fee contract, especially one involving complex defense systems, clearly defined performance standards, delivery schedules, and quality benchmarks are essential for effective oversight and accountability. These metrics allow the Department of the Army to track progress, evaluate the contractor's performance, and ensure that the engineering services delivered meet the required technical specifications and operational needs. Without this information, assessing the contractor's adherence to requirements and the overall success of the contract is challenging.
What is Lockheed Martin Corporation's track record with sole-source defense engineering contracts of this magnitude?
Lockheed Martin Corporation is a major defense contractor with extensive experience in sole-source awards for complex defense systems. Their track record typically involves significant, long-term contracts for platforms like aircraft, missiles, and space systems. While sole-source awards are common for specialized, high-technology defense work where they are a primary or sole provider, they also attract scrutiny regarding cost-effectiveness. Evaluating Lockheed Martin's specific history with sole-source CPFF contracts for missile systems engineering would involve reviewing past performance, cost performance indices, and any associated audits or reviews to gauge their efficiency and value delivery in such arrangements.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W31P4Q22R0047
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp
Address: 5600 W SAND LAKE RD, 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: $373,138,347
Exercised Options: $36,650,276
Current Obligation: $36,650,276
Subaward Activity
Number of Subawards: 15
Total Subaward Amount: $1,461,778
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2023-08-01
Current End Date: 2027-09-16
Potential End Date: 2027-09-16 00:00:00
Last Modified: 2025-12-10
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