Lockheed Martin awarded $73.8M for GMLRS guidance sets, with no competition

Contract Overview

Contract Amount: $73,775,598 ($73.8M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2023-09-27

End Date: 2027-08-31

Contract Duration: 1,434 days

Daily Burn Rate: $51.4K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: GUIDED MULTIPLE LAUNCH ROCKET SYSTEMS (GMLRS) MILITARY-CODE GUIDANCE SET (MGS) SYSTEM DESIGN, INTEGRATION, AND QUALIFICATION, PHASE II.

Place of Performance

Location: GRAND PRAIRIE, DALLAS County, TEXAS, 75051

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $73.8 million to LOCKHEED MARTIN CORPORATION for work described as: GUIDED MULTIPLE LAUNCH ROCKET SYSTEMS (GMLRS) MILITARY-CODE GUIDANCE SET (MGS) SYSTEM DESIGN, INTEGRATION, AND QUALIFICATION, PHASE II. Key points: 1. Contract awarded on a sole-source basis, raising concerns about price discovery. 2. Significant funding allocated for system design, integration, and qualification. 3. Long contract duration of nearly four years suggests complex development. 4. Focus on advanced missile guidance systems highlights critical defense capabilities. 5. Potential for cost overruns given the Cost Plus Fixed Fee contract type. 6. Texas-based awardee indicates potential regional economic impact.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and focus on R&D/design phases. Without competitive bids, it's difficult to assess if the $73.8 million represents a fair market price for the system design, integration, and qualification of GMLRS guidance sets. The Cost Plus Fixed Fee structure, while common for development, can lead to costs exceeding initial estimates if not closely managed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of the Army did not solicit bids from multiple contractors. This approach is typically justified when only one contractor possesses the necessary specialized knowledge, technology, or capability. However, the lack of competition limits the government's ability to explore alternative solutions or secure the most cost-effective pricing.

Taxpayer Impact: Taxpayers may not be receiving the best possible value due to the absence of competitive pressure, which typically drives down prices and encourages innovation.

Public Impact

The primary beneficiaries are the U.S. Army, receiving advanced guidance systems for GMLRS. Services delivered include system design, integration, and qualification, crucial for missile effectiveness. The contract has a geographic impact primarily in Texas, where the contractor is located. Workforce implications include specialized engineering and technical roles within Lockheed Martin.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential innovation.
Cost Plus Fixed Fee contract type carries inherent risk of cost overruns.
Lack of transparency in the selection process due to sole-source nature.

Positive Signals

Award supports critical defense capabilities for the U.S. Army.
Long-term contract provides stability for development and integration efforts.
Focus on advanced technology development.

Sector Analysis

The Guided Missile and Space Vehicle Manufacturing sector is a highly specialized and technologically advanced segment of the aerospace and defense industry. This contract for GMLRS guidance sets fits within this sector, focusing on the critical components that ensure the accuracy and effectiveness of guided munitions. Spending in this area is driven by national security requirements and ongoing modernization efforts within military branches. Comparable spending benchmarks are difficult to ascertain without more specific details on the technology and development scope, but R&D and integration for advanced weapon systems represent significant investments.

Small Business Impact

This contract does not appear to involve a small business set-aside, as it was awarded to a large prime contractor, Lockheed Martin Corporation. There is no explicit information regarding subcontracting plans for small businesses within the provided data. The impact on the small business ecosystem is likely indirect, potentially through opportunities if Lockheed Martin chooses to subcontract certain components or services, but this is not guaranteed.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are typically embedded within the Cost Plus Fixed Fee structure, requiring detailed reporting and justification of costs. Transparency may be limited due to the sole-source nature of the award. The Inspector General's office within the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse.

Related Government Programs

Guided Multiple Launch Rocket Systems (GMLRS)
Missile Guidance Systems
Aerospace and Defense Manufacturing
Department of the Army Procurement

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Lack of competitive bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $73.8 million to LOCKHEED MARTIN CORPORATION. GUIDED MULTIPLE LAUNCH ROCKET SYSTEMS (GMLRS) MILITARY-CODE GUIDANCE SET (MGS) SYSTEM DESIGN, INTEGRATION, AND QUALIFICATION, PHASE II.

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 $73.8 million.

What is the period of performance?

Start: 2023-09-27. End: 2027-08-31.

What is the specific technological advancement or capability gap that necessitated a sole-source award for the GMLRS guidance sets?

The provided data does not specify the exact technological advancement or capability gap that led to the sole-source award. Typically, sole-source justifications for advanced defense systems like GMLRS guidance sets are based on factors such as unique proprietary technology, highly specialized expertise held by a single contractor, or the need to maintain compatibility with existing platforms where only one supplier can meet the requirements. Without further documentation, such as a Justification and Approval (J&A) document, the precise rationale remains unclear. This lack of transparency is a common concern with sole-source procurements, as it limits the ability to verify the necessity of avoiding full and open competition.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other potential contract types for this phase of development, and what are the associated risks?

The Cost Plus Fixed Fee (CPFF) contract type is often used for research and development efforts where the scope of work is not fully defined, or technical uncertainties are high, as is likely the case for system design, integration, and qualification. In a CPFF contract, the contractor is reimbursed for all allowable costs plus a fixed fee representing profit. Compared to fixed-price contracts, CPFF offers greater flexibility for the government to adapt the scope as requirements evolve. However, it carries a significant risk of cost overruns, as the contractor is incentivized to incur costs to achieve the fixed fee, and the government bears the financial risk. Effective oversight, stringent cost controls, and clear performance metrics are crucial to mitigate these risks and ensure value for money.

What is Lockheed Martin Corporation's track record with GMLRS or similar missile guidance system development contracts?

Lockheed Martin Corporation is a major defense contractor with extensive experience in developing and manufacturing advanced weapon systems, including guided missiles. They are known to be a primary producer of the GMLRS family of munitions. Their track record in this area is generally characterized by significant technological expertise and a substantial portfolio of successful, albeit often large-scale and complex, defense programs. While specific performance metrics for past GMLRS guidance set development are not detailed here, the company's long-standing role as a key supplier suggests a proven capability in this domain. However, like many large defense programs, their contracts may also involve complexities related to cost, schedule, and scope adjustments over time.

What are the potential implications of this contract award on the future development and deployment of GMLRS capabilities for the U.S. Army?

This contract award is crucial for the continued modernization and sustainment of the U.S. Army's GMLRS capabilities. By funding the design, integration, and qualification of new guidance sets, it ensures that the GMLRS platform remains effective against evolving threats and incorporates technological advancements. The successful completion of this Phase II development could lead to improved accuracy, extended range, enhanced target discrimination, or new functionalities for the GMLRS. Ultimately, this investment directly supports the Army's operational readiness and its ability to project power effectively. The long duration suggests a commitment to refining and qualifying these advanced components before potential large-scale production.

How does the $73.8 million funding for this phase compare to historical spending on GMLRS guidance system development or similar projects?

Without specific historical data on prior phases or comparable missile guidance system development contracts, it is difficult to definitively benchmark the $73.8 million award. However, given that this is Phase II of system design, integration, and qualification, it represents a substantial investment in the advanced development stages of a critical defense component. Development phases for complex military hardware, especially those involving cutting-edge guidance and control systems, often require significant funding due to the intricate engineering, rigorous testing, and qualification processes involved. This amount is consistent with the high costs associated with advanced aerospace and defense R&D, particularly for systems intended for frontline military applications.

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

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: $73,775,598

Exercised Options: $73,775,598

Current Obligation: $73,775,598

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $169,621

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W31P4Q23D0003

IDV Type: IDC

Timeline