DoD Awards $201.8M Contract for Rocket and Missile Engineering Services to Lockheed Martin
Contract Overview
Contract Amount: $201,763,913 ($201.8M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2023-11-29
End Date: 2027-09-30
Contract Duration: 1,401 days
Daily Burn Rate: $144.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: INDUSTRIAL ENGINEERING SERVICES (IES) IN SUPPORT OF ALL STRATEGIC AND OPERATIONAL ROCKETS AND MISSILES (STORM) PROJECT OFFICE WEAPON SYSTEMS.
Place of Performance
Location: GRAND PRAIRIE, DALLAS County, TEXAS, 75051
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $201.8 million to LOCKHEED MARTIN CORPORATION for work described as: INDUSTRIAL ENGINEERING SERVICES (IES) IN SUPPORT OF ALL STRATEGIC AND OPERATIONAL ROCKETS AND MISSILES (STORM) PROJECT OFFICE WEAPON SYSTEMS. Key points: 1. Significant contract value for specialized engineering services. 2. Sole-source award to Lockheed Martin raises questions about competition. 3. Long contract duration (2023-2027) suggests ongoing program needs. 4. Focus on strategic and operational rockets and missiles highlights defense sector importance.
Value Assessment
Rating: fair
The contract value of $201.8 million over approximately 3.7 years appears substantial for specialized engineering services. Benchmarking against similar sole-source engineering contracts would be necessary to fully assess pricing reasonableness.
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 may result in higher costs for taxpayers.
Taxpayer Impact: The sole-source nature of this award means taxpayers may not be receiving the best possible price due to the absence of competitive bidding.
Public Impact
Taxpayers may be overpaying due to the lack of competition. The long-term nature of the contract could indicate critical national security needs. Dependence on a single contractor for essential engineering services poses a potential risk.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- High contract value
Positive Signals
- Supports critical defense programs
- Long-term engagement
Sector Analysis
This contract falls within the Engineering Services sector, specifically supporting the Department of Defense's strategic and operational rockets and missiles programs. Spending in this area is often characterized by high complexity, specialized expertise, and significant national security implications.
Small Business Impact
The data indicates this contract was awarded to Lockheed Martin Corporation and does not mention any subcontracting opportunities for small businesses. Further investigation would be needed to determine if small businesses are involved in supporting this effort.
Oversight & Accountability
The contract is managed by the Department of the Army within the Department of Defense. Oversight mechanisms should ensure that the cost-plus-fixed-fee structure is managed effectively to control expenditures and that performance meets program requirements.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award limits competition.
- Potential for higher costs due to lack of bidding.
- Long contract duration may indicate critical dependency.
- No explicit mention of small business participation.
Tags
engineering-services, department-of-defense, tx, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $201.8 million to LOCKHEED MARTIN CORPORATION. INDUSTRIAL ENGINEERING SERVICES (IES) IN SUPPORT OF ALL STRATEGIC AND OPERATIONAL ROCKETS AND MISSILES (STORM) PROJECT OFFICE WEAPON SYSTEMS.
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 $201.8 million.
What is the period of performance?
Start: 2023-11-29. End: 2027-09-30.
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 involves unique capabilities, proprietary technology, or urgent requirements where only one contractor can meet the need. Agencies must document these justifications thoroughly. To ensure fair pricing, agencies may use historical pricing data, independent cost estimates, or conduct detailed negotiations with the sole-source provider. However, the absence of competitive bids inherently limits the government's ability to secure the lowest possible price.
What are the specific risks associated with relying on a single contractor for critical rocket and missile engineering services over a four-year period?
Relying on a single contractor, Lockheed Martin, for critical engineering services presents several risks. These include potential complacency leading to reduced innovation or efficiency, vulnerability to supply chain disruptions affecting only one source, and a lack of competitive pressure to drive down costs or improve service quality. Furthermore, if the contractor faces financial difficulties or strategic shifts, it could significantly impact the continuity of these vital defense programs.
How does the cost-plus-fixed-fee (CPFF) contract type align with ensuring cost-effectiveness for these engineering services?
The Cost-Plus-Fixed-Fee (CPFF) contract type aims to provide a degree of cost control by adding a fixed fee to the allowable costs. This incentivizes the contractor to manage costs to maximize their profit margin, as the fee remains constant regardless of the final cost. However, CPFF contracts can still lead to cost overruns if the initial cost estimates are inaccurate or if the scope of work expands significantly. Effective oversight is crucial to monitor costs and ensure value.
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: W31P4Q23R0075
Offers Received: 1
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: $299,154,320
Exercised Options: $201,763,913
Current Obligation: $201,763,913
Subaward Activity
Number of Subawards: 36
Total Subaward Amount: $10,810,262
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2023-11-29
Current End Date: 2027-09-30
Potential End Date: 2027-09-30 00:00:00
Last Modified: 2026-01-06
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