DoD Awards $40.9M for PAC-3 Missile Support to Lockheed Martin, Sole-Source
Contract Overview
Contract Amount: $40,934,359 ($40.9M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2023-04-12
End Date: 2027-05-01
Contract Duration: 1,480 days
Daily Burn Rate: $27.7K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Other
Official Description: THIS CONTRACT IS FOR PATRIOT ADVANCED CAPABILITIES-3 (PAC-3) MISSILE SUPPORT CENTER (P3MSC) FOR THE UNITED STATES 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 $40.9 million to LOCKHEED MARTIN CORPORATION for work described as: THIS CONTRACT IS FOR PATRIOT ADVANCED CAPABILITIES-3 (PAC-3) MISSILE SUPPORT CENTER (P3MSC) FOR THE UNITED STATES AND FOREIGN MILITARY SALES (FMS) CUSTOMERS. Key points: 1. Contract awarded to Lockheed Martin for critical PAC-3 missile support. 2. Sole-source award raises questions about competition and potential cost savings. 3. Long-term support contract (2023-2027) indicates ongoing reliance on PAC-3. 4. Foreign Military Sales (FMS) included, suggesting international partnership implications.
Value Assessment
Rating: fair
The contract type is Cost Plus Incentive Fee (CPIF), which can incentivize cost control but also carries inherent risk if not managed closely. Benchmarking against similar sole-source sustainment contracts is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and may result in higher costs compared to a competitive environment. The justification for sole-source is not provided.
Taxpayer Impact: Taxpayer funds are committed without the benefit of competitive bidding, potentially leading to less favorable pricing.
Public Impact
Ensures continued operational readiness of the PAC-3 missile defense system. Supports U.S. national security and allied defense capabilities through FMS. Potential for cost overruns due to sole-source nature and CPIF contract type. Impacts the aerospace and defense sector, specifically missile manufacturing and support.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Incentive Fee contract type
- Lack of competition justification
Positive Signals
- Critical defense system support
- Long-term sustainment contract
- Inclusion of Foreign Military Sales
Sector Analysis
This contract falls within the Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing sector. Spending in this niche area is often characterized by high R&D costs, long production cycles, and significant reliance on a few prime contractors due to specialized expertise and security requirements.
Small Business Impact
The contract was not awarded to a small business, and there is no indication of subcontracting opportunities for small businesses within the provided data. This award does not appear to directly benefit the small business sector.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and effective performance. The Department of the Army's contracting activity should provide clear justification for the lack of competition and monitor the CPIF contract closely for cost efficiencies.
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
- Lack of competitive bidding
- Potential for cost overruns
- Limited transparency on justification
- 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 $40.9 million to LOCKHEED MARTIN CORPORATION. THIS CONTRACT IS FOR PATRIOT ADVANCED CAPABILITIES-3 (PAC-3) MISSILE SUPPORT CENTER (P3MSC) FOR THE UNITED STATES 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 $40.9 million.
What is the period of performance?
Start: 2023-04-12. End: 2027-05-01.
What is the specific justification for awarding this contract on a sole-source basis, and what steps are being taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities, lack of alternatives, or urgent needs. Without this specific justification, it's difficult to assess the necessity. To ensure fair pricing, the government should conduct thorough cost and price analyses, potentially using historical data or independent cost estimates, and closely monitor the incentive fee structure to align contractor performance with cost-saving objectives.
What are the potential risks associated with a Cost Plus Incentive Fee (CPIF) contract for missile support, especially in a sole-source scenario?
CPIF contracts can incentivize cost reduction, but in a sole-source context, the 'incentive' might be less effective without a competitive baseline. Risks include potential for cost overruns if the target cost is set too high or if scope creep occurs without adequate controls. The government must diligently manage the contract, monitor performance against targets, and ensure the incentive structure truly drives efficiency rather than simply cost-plus reimbursement.
How does this contract contribute to the overall effectiveness and readiness of U.S. and allied missile defense capabilities?
This contract is crucial for maintaining the operational readiness and effectiveness of the PAC-3 missile system, a key component of U.S. and allied air and missile defense. By ensuring the availability of support, spare parts, and technical expertise, it directly contributes to the ability to counter evolving threats. The inclusion of FMS further extends these critical defense capabilities to partner nations.
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
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: $40,934,359
Exercised Options: $40,934,359
Current Obligation: $40,934,359
Subaward Activity
Number of Subawards: 3
Total Subaward Amount: $11,959,075
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: 2023-04-12
Current End Date: 2027-05-01
Potential End Date: 2027-05-01 12:05:00
Last Modified: 2025-06-20
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)