DoD Awards $18.1M to Lockheed Martin for PAC-3 Missile Support, Mitigating Obsolescence
Contract Overview
Contract Amount: $18,105,855 ($18.1M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2025-09-30
End Date: 2028-10-19
Contract Duration: 1,115 days
Daily Burn Rate: $16.2K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: PATRIOT ADVANCED CAPABILITY-3 (PAC-3) MISSILE SUPPORT CENTER (P3MSC) FOR THE UNITED STATES (US) AND FOREIGN MILITARY SALES (FMS) CUSTOMER, OBSOLESCENCE (OBS) MITIGATION AND TEST EQUIPMENT DEVELOPMENT.
Place of Performance
Location: GRAND PRAIRIE, DALLAS County, TEXAS, 75051
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $18.1 million to LOCKHEED MARTIN CORPORATION for work described as: PATRIOT ADVANCED CAPABILITY-3 (PAC-3) MISSILE SUPPORT CENTER (P3MSC) FOR THE UNITED STATES (US) AND FOREIGN MILITARY SALES (FMS) CUSTOMER, OBSOLESCENCE (OBS) MITIGATION AND TEST EQUIPMENT DEVELOPMENT. Key points: 1. Contract focuses on critical obsolescence mitigation for PAC-3 missile systems. 2. Sole source award to Lockheed Martin, the prime contractor for PAC-3. 3. High risk of cost overruns due to Cost Plus Fixed Fee contract type. 4. Spending falls within the 'Other Guided Missile and Space Vehicle Parts' manufacturing sector.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee contract type offers limited incentive for cost control, potentially leading to higher-than-expected prices. Benchmarking is difficult without specific cost breakdowns, but the nature of sole-source support for complex defense systems often carries a premium.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, awarded directly to Lockheed Martin as the sole provider of PAC-3 missile support. This lack of competition limits price discovery and potentially increases costs for the government.
Taxpayer Impact: Taxpayer funds are used for a sole-source contract, increasing the risk of paying above-market rates for essential defense support services.
Public Impact
Ensures continued operational readiness of the PAC-3 missile defense system. Addresses critical component obsolescence, preventing future sustainment challenges. Supports U.S. and allied military capabilities through Foreign Military Sales. Potential for increased costs due to sole-source nature and CPFF contract.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Fixed Fee contract
- Obsolescence mitigation can be costly
- Lack of competition
Positive Signals
- Critical system support
- Addresses obsolescence proactively
- Supports FMS customers
Sector Analysis
This contract falls under the 'Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing' sector. Spending in this specialized defense manufacturing area is often characterized by high R&D costs, long production cycles, and significant reliance on prime contractors.
Small Business Impact
The contract is awarded to Lockheed Martin Corporation, a large prime contractor. There is no indication of subcontracting opportunities for small businesses within this specific award notice.
Oversight & Accountability
The Department of the Army is the contracting agency. Oversight will be crucial to monitor costs under the Cost Plus Fixed Fee structure and ensure effective obsolescence mitigation strategies are implemented.
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 limits competition and price negotiation.
- Cost Plus Fixed Fee contract type may lead to cost overruns.
- Reliance on a single contractor for critical system support.
- Potential for high costs associated with obsolescence mitigation.
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 $18.1 million to LOCKHEED MARTIN CORPORATION. PATRIOT ADVANCED CAPABILITY-3 (PAC-3) MISSILE SUPPORT CENTER (P3MSC) FOR THE UNITED STATES (US) AND FOREIGN MILITARY SALES (FMS) CUSTOMER, OBSOLESCENCE (OBS) MITIGATION AND TEST EQUIPMENT DEVELOPMENT.
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 $18.1 million.
What is the period of performance?
Start: 2025-09-30. End: 2028-10-19.
What is the projected cost impact of obsolescence mitigation for the PAC-3 system over the contract period?
The contract value is $18.1 million, but the specific allocation for obsolescence mitigation is not detailed. Given the complexity of defense systems, obsolescence management can be a significant driver of long-term sustainment costs. Further analysis would be needed to determine the precise budget impact and compare it to industry benchmarks for similar mitigation efforts.
What are the risks associated with a sole-source award for critical missile support?
Sole-source awards eliminate competitive pressure, potentially leading to inflated prices and reduced innovation. For critical systems like the PAC-3, this reliance on a single contractor can create vendor lock-in and limit the government's flexibility in seeking alternative solutions or negotiating better terms. It also increases the risk of contractor performance issues going unaddressed.
How effective is the Cost Plus Fixed Fee contract type in ensuring value for taxpayer money in this context?
The Cost Plus Fixed Fee (CPFF) contract type is generally less effective for ensuring value compared to fixed-price contracts, especially when cost control is paramount. While it allows for flexibility in R&D and addressing unforeseen issues like obsolescence, it shifts much of the cost risk to the government and provides limited incentive for the contractor to minimize expenses. Robust oversight is essential to manage costs.
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: $18,105,855
Exercised Options: $18,105,855
Current Obligation: $18,105,855
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W31P4Q22D0022
IDV Type: IDC
Timeline
Start Date: 2025-09-30
Current End Date: 2028-10-19
Potential End Date: 2028-10-19 12:10:00
Last Modified: 2025-10-30
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