DoD's $8.3M HIMARS/MLRS contract with Lockheed Martin faces scrutiny over limited competition and pricing
Contract Overview
Contract Amount: $8,376,722 ($8.4M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2025-12-01
End Date: 2026-11-14
Contract Duration: 348 days
Daily Burn Rate: $24.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: THE STRATEGIC AND OPERATIONAL ROCKETS AND MISSILES PROJECT OFFICE IN SUPPORT OF HIGH MOBILITY ARTILLERY ROCKET SYSTEM AND MULTIPLE LAUNCH ROCKET SYSTEM.
Place of Performance
Location: GRAND PRAIRIE, DALLAS County, TEXAS, 75051
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $8.4 million to LOCKHEED MARTIN CORPORATION for work described as: THE STRATEGIC AND OPERATIONAL ROCKETS AND MISSILES PROJECT OFFICE IN SUPPORT OF HIGH MOBILITY ARTILLERY ROCKET SYSTEM AND MULTIPLE LAUNCH ROCKET SYSTEM. Key points: 1. High value contract for critical missile systems. 2. Sole-source award to Lockheed Martin raises competition concerns. 3. Potential for inflated costs due to lack of competitive bidding. 4. Sector is vital for national defense, but efficiency is key.
Value Assessment
Rating: questionable
The contract value of $8.3M for guided missile manufacturing is significant. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential market rates for similar systems or components.
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 significantly limits price discovery and may lead to higher costs for taxpayers.
Taxpayer Impact: The lack of competition could result in the government paying a premium for these essential missile systems, impacting overall defense budget efficiency.
Public Impact
Taxpayers may be overpaying for critical defense hardware due to a lack of competitive pressure. The reliance on a single supplier for HIMARS/MLRS components could pose supply chain risks. Ensuring the long-term affordability of these systems is crucial for sustained military readiness.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for cost overruns
- Sole-source dependency
Positive Signals
- Supports critical defense systems
- Long-term contract duration
Sector Analysis
This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a critical component of the defense industry. Spending benchmarks in this niche area are often influenced by R&D costs and specialized production capabilities.
Small Business Impact
There is no indication of small business participation in this contract. As a sole-source award to a large corporation, opportunities for small businesses are likely minimal.
Oversight & Accountability
Oversight is crucial to ensure the Department of the Army receives fair value despite the sole-source nature of this contract. Regular performance reviews and cost audits are essential for accountability.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award limits competitive pricing.
- Potential for cost overruns due to lack of market pressure.
- Dependency on a single supplier for critical defense assets.
- Limited transparency into pricing justification.
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, tx, definitive-contract, 1m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $8.4 million to LOCKHEED MARTIN CORPORATION. THE STRATEGIC AND OPERATIONAL ROCKETS AND MISSILES PROJECT OFFICE IN SUPPORT OF HIGH MOBILITY ARTILLERY ROCKET SYSTEM AND MULTIPLE LAUNCH ROCKET SYSTEM.
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 $8.4 million.
What is the period of performance?
Start: 2025-12-01. End: 2026-11-14.
What is the justification for awarding this contract sole-source, and what steps are being taken to ensure fair pricing?
The justification for a sole-source award typically involves unique capabilities or urgent needs. The Department of Defense should provide detailed documentation supporting this decision. To ensure fair pricing, mechanisms like cost realism analyses, benchmarking against historical data, and potentially negotiating profit margins are essential, though challenging without competition.
What are the potential risks associated with relying solely on Lockheed Martin for these critical missile systems?
Sole-source reliance creates significant risks, including supply chain vulnerability if Lockheed Martin faces production issues or financial instability. It also removes competitive pressure, potentially leading to higher prices and less innovation over time. Dependence can also reduce the government's leverage in future negotiations and contract modifications.
How does the firm fixed-price contract type mitigate or exacerbate the risks associated with this sole-source award?
A firm fixed-price contract aims to transfer cost risk to the contractor, providing cost certainty for the buyer. However, in a sole-source scenario, this benefit is diminished. While the government's cost is fixed, the contractor may have inflated the price knowing there's no competition, thus the 'fixed price' might be excessively high.
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
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
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: $51,332,736
Exercised Options: $8,376,722
Current Obligation: $8,376,722
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2025-12-01
Current End Date: 2026-11-14
Potential End Date: 2031-05-14 00:00:00
Last Modified: 2026-01-13
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