DoD Awards $160.9M to Lockheed Martin for Re-entry System Sustaining Engineering Services

Contract Overview

Contract Amount: $160,878,142 ($160.9M)

Contractor: Lockheed Martin Corp

Awarding Agency: Department of Defense

Start Date: 2019-06-05

End Date: 2026-06-04

Contract Duration: 2,556 days

Daily Burn Rate: $62.9K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: RE-ENTRY SYSTEM/RE-ENTRY VEHICLE SUSTAINING ENGINEERING SERVICES

Place of Performance

Location: KING OF PRUSSIA, MONTGOMERY County, PENNSYLVANIA, 19406

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $160.9 million to LOCKHEED MARTIN CORP for work described as: RE-ENTRY SYSTEM/RE-ENTRY VEHICLE SUSTAINING ENGINEERING SERVICES Key points: 1. Significant contract value for critical defense systems. 2. Sole-source award to Lockheed Martin raises competition concerns. 3. Long-term contract (2019-2026) indicates sustained need. 4. Engineering services are vital for national security infrastructure.

Value Assessment

Rating: questionable

The contract's Cost Plus Award Fee structure can lead to cost overruns if not managed tightly. Benchmarking is difficult without more detailed cost breakdowns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, limiting price discovery and potentially increasing costs for taxpayers. The lack of competition means no alternative providers were considered.

Taxpayer Impact: The sole-source nature of this award may result in higher costs than a competitive procurement, impacting taxpayer value.

Public Impact

Ensures continued operation and maintenance of critical re-entry systems. Supports national security by maintaining strategic defense capabilities. Potential for cost inefficiencies due to sole-source award.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Positive Signals

Sector Analysis

This contract falls under Engineering Services, a sector crucial for maintaining complex defense systems. Spending benchmarks for such specialized services are often high due to technical requirements and limited providers.

Small Business Impact

The data indicates no specific allocation or set-aside for small businesses in this contract. This suggests a missed opportunity to leverage small business capabilities in specialized engineering services.

Oversight & Accountability

The Cost Plus Award Fee structure requires robust oversight to ensure performance objectives are met and costs are controlled. The long duration necessitates continuous monitoring of contractor performance and spending.

Related Government Programs

Risk Flags

Tags

engineering-services, department-of-defense, pa, delivery-order, 100m-plus

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $160.9 million to LOCKHEED MARTIN CORP. RE-ENTRY SYSTEM/RE-ENTRY VEHICLE SUSTAINING ENGINEERING SERVICES

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $160.9 million.

What is the period of performance?

Start: 2019-06-05. End: 2026-06-04.

What is the justification for the sole-source award, and were alternatives ever considered?

The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one contractor can fulfill the requirement. Without further documentation, it's unclear if alternatives were thoroughly explored or if specific circumstances necessitated bypassing full and open competition.

How is the 'award fee' component structured and monitored to ensure fair pricing and contractor performance?

The award fee is performance-based, meaning Lockheed Martin earns additional profit based on meeting or exceeding specific criteria outlined in the contract. Robust oversight by the Air Force is crucial to objectively assess performance against these criteria and ensure the fee structure incentivizes efficiency and value, rather than simply cost accumulation.

What are the long-term implications for re-entry system readiness and modernization given this sustainment contract?

This contract ensures the immediate readiness and sustainment of existing re-entry systems. However, its focus on sustainment may not inherently drive innovation or modernization. Future contracts will be critical for addressing technological advancements and ensuring the systems remain effective against evolving threats.

Industry Classification

NAICS: Professional, Scientific, and Technical ServicesArchitectural, Engineering, and Related ServicesEngineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT)PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 230 MALL BLVD, KING OF PRUSSIA, PA, 19406

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: $261,876,230

Exercised Options: $168,445,230

Current Obligation: $160,878,142

Actual Outlays: $5,020,286

Subaward Activity

Number of Subawards: 51

Total Subaward Amount: $4,396,121

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA821419D0001

IDV Type: IDC

Timeline

Start Date: 2019-06-05

Current End Date: 2026-06-04

Potential End Date: 2029-06-04 00:00:00

Last Modified: 2025-08-21

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