DoD Awards $70.8M to Lockheed Martin for MK21 Arming & Fuzing Refurbishment
Contract Overview
Contract Amount: $70,857,220 ($70.9M)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2019-09-12
End Date: 2024-09-11
Contract Duration: 1,826 days
Daily Burn Rate: $38.8K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: MK21 ARMING AND FUZING (AFA) REFURBISHMENT&AFA SUB-COMPONENTS REPAIR/REFURB
Place of Performance
Location: KING OF PRUSSIA, MONTGOMERY County, PENNSYLVANIA, 19406
Plain-Language Summary
Department of Defense obligated $70.9 million to LOCKHEED MARTIN CORP for work described as: MK21 ARMING AND FUZING (AFA) REFURBISHMENT&AFA SUB-COMPONENTS REPAIR/REFURB Key points: 1. Significant contract value for critical defense components. 2. Sole-source award to Lockheed Martin raises competition concerns. 3. Potential for cost overruns with Cost Plus Fixed Fee contract type. 4. Long-term contract duration suggests ongoing need for these services.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee contract type, while common for complex defense work, can lead to higher costs if not managed tightly. Benchmarking against similar refurbishment contracts is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive process.
Taxpayer Impact: The lack of competition for this substantial contract may result in taxpayers paying a premium for these essential defense services.
Public Impact
Ensures readiness of critical nuclear weapon components. Supports the U.S. nuclear triad's modernization efforts. Impacts national security by maintaining strategic deterrence capabilities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Long contract duration
Positive Signals
- Essential defense service
- Experienced contractor
Sector Analysis
This contract falls within the defense sector, specifically related to the maintenance and refurbishment of strategic weapon systems. Spending in this area is critical for national security but requires robust oversight due to high costs and specialized nature.
Small Business Impact
There is no indication that small businesses were involved in this contract, as it was awarded directly to a large prime contractor.
Oversight & Accountability
The Department of Defense, through the Defense Contract Management Agency, is responsible for overseeing this contract. However, the sole-source nature and CPFF structure necessitate vigilant oversight to ensure cost control and performance.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition
- Potential for cost overruns
- Contract type (CPFF)
- Long contract duration
Tags
engineering-services, department-of-defense, pa, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $70.9 million to LOCKHEED MARTIN CORP. MK21 ARMING AND FUZING (AFA) REFURBISHMENT&AFA SUB-COMPONENTS REPAIR/REFURB
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORP.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $70.9 million.
What is the period of performance?
Start: 2019-09-12. End: 2024-09-11.
What is the projected cost savings or efficiency gain anticipated from this refurbishment program compared to alternative solutions?
Without detailed cost breakdowns and comparative analysis, it is difficult to ascertain the specific cost savings or efficiency gains. The justification for a sole-source award should ideally include a rationale demonstrating why this approach is more beneficial or cost-effective than a competitive procurement, even if the benefits are primarily in terms of speed or specialized capability.
What mechanisms are in place to control costs under this Cost Plus Fixed Fee contract, given the potential for contractor inefficiencies?
The contract likely includes specific performance metrics, reporting requirements, and audit rights for the government to monitor costs and contractor performance. The Defense Contract Management Agency's role is crucial in ensuring that costs are reasonable and allocable, and that the fixed fee is earned based on agreed-upon objectives.
How does the refurbishment of the MK21 arming and fuzing components contribute to the overall effectiveness and reliability of the U.S. nuclear deterrent?
The MK21 arming and fuzing system is a critical component of the Minuteman III intercontinental ballistic missile (ICBM). Refurbishment ensures the continued reliability, safety, and effectiveness of these systems, which are essential for maintaining the credibility and operational readiness of the U.S. nuclear triad and strategic deterrence.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
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
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: $76,733,585
Exercised Options: $74,164,509
Current Obligation: $70,857,220
Actual Outlays: $3,227,365
Subaward Activity
Number of Subawards: 2
Total Subaward Amount: $122,518
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: 2019-09-12
Current End Date: 2024-09-11
Potential End Date: 2024-09-11 00:00:00
Last Modified: 2025-09-03
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