DoD Awards $58.5M for PAC-3 Software to Lockheed Martin, No Competition
Contract Overview
Contract Amount: $58,497,344 ($58.5M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2024-06-14
End Date: 2026-06-30
Contract Duration: 746 days
Daily Burn Rate: $78.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: PHASED ARRAY TRACKING TO INTERCEPT OF TARGET (PATRIOT) ADVANCED CAPABILITY-3 (PAC-3) SOFTWARE TASK (P3ST) YEARS 7 AND 8
Place of Performance
Location: GRAND PRAIRIE, DALLAS County, TEXAS, 75051
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $58.5 million to LOCKHEED MARTIN CORPORATION for work described as: PHASED ARRAY TRACKING TO INTERCEPT OF TARGET (PATRIOT) ADVANCED CAPABILITY-3 (PAC-3) SOFTWARE TASK (P3ST) YEARS 7 AND 8 Key points: 1. Significant contract awarded to a single, established defense contractor. 2. Focus on advanced missile defense software highlights critical national security needs. 3. Lack of competition raises questions about price discovery and potential cost overruns. 4. The 'All Other Professional, Scientific, and Technical Services' NAICS code is broad, potentially masking specific service costs.
Value Assessment
Rating: questionable
The contract type is Cost Plus Incentive Fee (CPIF), which can incentivize cost control but also carries inherent risk. The awarded amount of $58.5M for two years needs benchmarking against similar software development contracts for advanced defense systems to assess value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award likely due to specialized requirements or existing system integration. The absence of competition limits the government's ability to secure the best possible price through market forces.
Taxpayer Impact: Without competitive bidding, taxpayers may be paying a premium for this critical software, as there is no market pressure to drive down costs.
Public Impact
Ensures continued development and sustainment of the PAC-3 missile defense system's software. Supports national security by maintaining advanced air and missile defense capabilities. Funds critical technical services for the Department of the Army. Potential for cost overruns due to sole-source, cost-plus contract type.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of clear performance metrics in provided data
Positive Signals
- Supports critical defense capability
- Long-term contract duration
Sector Analysis
This contract falls under professional, scientific, and technical services, specifically within the defense sector. Spending benchmarks for similar specialized software development for advanced weapon systems are often high due to complexity and security requirements, but competition is key to controlling these costs.
Small Business Impact
The data indicates no specific set-aside for small businesses. Large defense contractors like Lockheed Martin typically dominate these types of specialized, high-value contracts, limiting opportunities for smaller firms in this specific award.
Oversight & Accountability
The sole-source nature of this award warrants close oversight from the Department of Defense to ensure cost reasonableness and effective performance. Robust auditing of costs incurred under the CPIF contract will be crucial for accountability.
Related Government Programs
- All Other Professional, Scientific, and Technical Services
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award limits competition and price discovery.
- Cost-plus contract type introduces risk of cost overruns.
- Broad NAICS code lacks specificity for detailed analysis.
- Potential for reduced transparency due to contract structure.
Tags
all-other-professional-scientific-and-te, department-of-defense, tx, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $58.5 million to LOCKHEED MARTIN CORPORATION. PHASED ARRAY TRACKING TO INTERCEPT OF TARGET (PATRIOT) ADVANCED CAPABILITY-3 (PAC-3) SOFTWARE TASK (P3ST) YEARS 7 AND 8
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 $58.5 million.
What is the period of performance?
Start: 2024-06-14. End: 2026-06-30.
What specific technical advancements or capabilities does this software task aim to achieve in PAC-3, and how do these justify the sole-source award?
The specific technical advancements are not detailed in the provided data. However, sole-source awards for advanced defense systems like PAC-3 are often justified by unique technological requirements, proprietary knowledge, or the need for seamless integration with existing, complex platforms. The justification would typically involve demonstrating that only Lockheed Martin possesses the necessary expertise and intellectual property to fulfill these specialized software needs effectively and without unacceptable delay or cost.
What are the projected cost efficiencies or performance improvements expected from the incentive fee structure in this CPIF contract?
The Cost Plus Incentive Fee (CPIF) structure aims to align the contractor's profit with the government's objectives, typically cost savings and performance targets. For this contract, the incentive fee would be adjusted based on Lockheed Martin's ability to meet or exceed targets for cost reduction and specific performance metrics related to the PAC-3 software's functionality and reliability. The exact targets and fee structure are not provided, but the goal is to incentivize efficient development and high-quality outcomes.
How does the 'All Other Professional, Scientific, and Technical Services' NAICS code impact the transparency and comparability of this spending?
The broad nature of NAICS code 541990, 'All Other Professional, Scientific, and Technical Services,' can obscure the specific nature and cost drivers of the services procured. This lack of specificity makes it challenging to benchmark spending against more narrowly defined categories and can reduce transparency. It allows for a wide range of services to be bundled, potentially making it harder for analysts to scrutinize the value and necessity of each component of the contract.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
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: $65,548,326
Exercised Options: $59,666,977
Current Obligation: $58,497,344
Subaward Activity
Number of Subawards: 3
Total Subaward Amount: $3,951,683
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Parent Contract
Parent Award PIID: W31P4Q22G0003
IDV Type: BOA
Timeline
Start Date: 2024-06-14
Current End Date: 2026-06-30
Potential End Date: 2026-06-30 00:00:00
Last Modified: 2025-08-21
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