DoD Awards $152.6M Contract for PAC-3 Missile Support to Lockheed Martin
Contract Overview
Contract Amount: $15,262,673 ($15.3M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2025-08-13
End Date: 2027-08-12
Contract Duration: 729 days
Daily Burn Rate: $20.9K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
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 $15.3 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. This contract supports the critical PAC-3 missile system for both U.S. and FMS customers. 2. Lockheed Martin, the sole provider, holds this contract, raising competition concerns. 3. The contract's value is significant, impacting national defense readiness. 4. The sector is defense manufacturing, specifically guided missile and space vehicle parts.
Value Assessment
Rating: questionable
The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. Benchmarking against similar sole-source support contracts for advanced missile systems is difficult due to limited public data.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award likely due to the specialized nature of PAC-3 missile support. This lack of competition limits price discovery and potentially increases costs for the government.
Taxpayer Impact: Taxpayers may bear higher costs due to the absence of competitive bidding for essential missile support services.
Public Impact
Ensures continued operational readiness of the PAC-3 missile defense system. Supports U.S. allies through Foreign Military Sales, strengthening international partnerships. Maintains critical defense manufacturing capabilities within the U.S.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price negotiation.
- Cost-plus contract type carries inherent risk of cost escalation.
- Reliance on a single contractor for critical missile support.
Positive Signals
- Supports a vital national defense asset.
- Ensures readiness for U.S. and allied forces.
- Long-term contract provides stability for support operations.
Sector Analysis
This contract falls within the defense manufacturing sector, specifically focusing on guided missile and space vehicle parts. Spending in this area is critical for national security, with significant government investment typically allocated to maintain advanced weapon systems.
Small Business Impact
This contract was awarded to Lockheed Martin Corporation and does not indicate any specific subcontracting opportunities for small businesses. The nature of specialized defense manufacturing often limits direct small business involvement in prime contracts.
Oversight & Accountability
The Department of Defense, specifically the Department of the Army, is responsible for oversight. The cost-plus fixed fee structure necessitates robust financial oversight to manage expenditures and ensure value for money.
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
- Sole-source award
- Cost-plus contract type
- Lack of transparency in pricing
- Potential for cost overruns
- Critical defense system dependency
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 $15.3 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 $15.3 million.
What is the period of performance?
Start: 2025-08-13. End: 2027-08-12.
What is the projected total cost of ownership for the PAC-3 missile system over its lifecycle, and how does this contract contribute to that?
The total cost of ownership for the PAC-3 missile system is substantial, encompassing procurement, sustainment, upgrades, and operational costs. This contract, valued at $152.6 million, specifically addresses the sustainment phase through the PAC-3 Missile Support Center. While this figure represents a portion of the lifecycle cost, a comprehensive analysis would require data on all sustainment activities, future upgrades, and operational expenditures over the system's entire service life.
What are the specific risks associated with relying solely on Lockheed Martin for PAC-3 missile support, and what mitigation strategies are in place?
The primary risk is the lack of competition, potentially leading to higher prices and reduced innovation. Dependency on a single supplier also creates vulnerability if Lockheed Martin faces production issues, financial instability, or geopolitical challenges. Mitigation strategies could include strong contract management, performance incentives, and exploring alternative support solutions or domestic industrial base development for future contracts.
How effectively does the Cost Plus Fixed Fee (CPFF) contract structure ensure value for taxpayer money in this sole-source scenario?
The CPFF structure aims to provide a reasonable profit margin for the contractor while allowing flexibility for unforeseen costs. However, in a sole-source context, its effectiveness in ensuring value is diminished. Robust government oversight is crucial to scrutinize costs, prevent inefficiencies, and ensure the fixed fee remains appropriate. Without competition, the incentive for the contractor to minimize costs is weaker, making vigilant oversight paramount for taxpayer protection.
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 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: $15,262,673
Exercised Options: $15,262,673
Current Obligation: $15,262,673
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W31P4Q22D0021
IDV Type: IDC
Timeline
Start Date: 2025-08-13
Current End Date: 2027-08-12
Potential End Date: 2027-08-12 12:08:00
Last Modified: 2025-12-01
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