DoD awards $733.8M contract to Lockheed Martin for launch services, impacting guided missile and space vehicle manufacturing
Contract Overview
Contract Amount: $733,760,299 ($733.8M)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2007-02-28
End Date: 2013-09-30
Contract Duration: 2,406 days
Daily Burn Rate: $305.0K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: BUY 3 LOCKHEED LAUNCH SERVICES
Place of Performance
Location: CENTENNIAL, ARAPAHOE County, COLORADO, 80112
State: Colorado Government Spending
Plain-Language Summary
Department of Defense obligated $733.8 million to LOCKHEED MARTIN CORP for work described as: BUY 3 LOCKHEED LAUNCH SERVICES Key points: 1. Significant contract value of $733.8 million awarded to a major defense contractor. 2. Competition was full and open after exclusion of sources, suggesting a complex procurement process. 3. Risk associated with reliance on a single provider for critical launch services. 4. Spending falls within the Guided Missile and Space Vehicle Manufacturing sector.
Value Assessment
Rating: fair
The contract value of $733.8 million for 2406 days (approx. 6.6 years) suggests a substantial investment. Benchmarking against similar large-scale launch service contracts would be necessary for a precise pricing assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The procurement method was 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while competition was sought, specific sources may have been excluded initially. This could impact price discovery by limiting the pool of potential bidders.
Taxpayer Impact: Taxpayer funds are being utilized for critical defense-related launch services, with the final price determined through a competitive process that aimed to balance cost and capability.
Public Impact
Ensures continued access to space for national security assets. Supports advanced technological development in the aerospace and defense industry. Contributes to the operational readiness of the U.S. Air Force.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns in long-term complex projects.
- Dependence on a single contractor for critical national security capabilities.
- Geopolitical risks affecting supply chains or launch operations.
Positive Signals
- Secures essential launch capabilities for national defense.
- Drives innovation in space technology and manufacturing.
- Supports high-value jobs in the aerospace sector.
Sector Analysis
This contract falls under the Guided Missile and Space Vehicle Manufacturing sector, a critical area for national defense and technological advancement. Spending benchmarks in this sector are highly variable due to the specialized nature and high costs associated with space programs.
Small Business Impact
The contract was awarded to Lockheed Martin Corp, a large prime contractor. There is no explicit indication of small business participation in this specific award, suggesting potential for subcontracting opportunities but not direct prime involvement.
Oversight & Accountability
Oversight would typically involve program management reviews, performance metrics tracking, and financial audits by the Department of Defense to ensure contract compliance and effective use of funds.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- High contract value.
- Long contract duration.
- Sole reliance on a single provider for critical services.
- Complexity of space launch operations.
- Potential for cost escalation over time.
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, co, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $733.8 million to LOCKHEED MARTIN CORP. BUY 3 LOCKHEED LAUNCH 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 $733.8 million.
What is the period of performance?
Start: 2007-02-28. End: 2013-09-30.
What is the projected cost per launch, and how does it compare to industry averages for similar services?
The total contract value is $733.8 million over approximately 2406 days. Without knowing the exact number of launches or specific service requirements, calculating a precise per-launch cost is difficult. However, this figure represents a significant investment, and comparisons to industry averages would require detailed analysis of launch vehicle types, mission complexity, and service provider overhead.
What are the specific risks associated with relying on Lockheed Martin for these critical launch services, and what mitigation strategies are in place?
Risks include potential single-source dependency, supply chain disruptions, technical failures, and cost overruns. Mitigation strategies likely involve robust contract oversight, performance incentives, contingency planning, and potentially maintaining alternative launch capabilities or partnerships to ensure mission success and national security.
How effectively does this contract ensure the U.S. Air Force's long-term strategic goals for space access and national security?
This contract is designed to ensure reliable and consistent access to space for critical national security assets. By securing launch services from a major provider, it supports the Air Force's strategic objectives for maintaining space superiority and operational readiness, though long-term effectiveness depends on ongoing technological advancements and geopolitical stability.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing
Product/Service Code: SPACE VEHICLES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: FA881605R0005
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 12257 STATE HIGHWAY, LITTLETON, CO, 90
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $743,440,299
Exercised Options: $734,660,299
Current Obligation: $733,760,299
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2007-02-28
Current End Date: 2013-09-30
Potential End Date: 2013-09-30 00:00:00
Last Modified: 2012-07-31
More Contracts from Lockheed Martin Corp
- Federal Contract — $48.1B (Department of Energy)
- TAS::80 0124::TAS Design, Development, Test&evaluation of Project Orion — $15.5B (National Aeronautics and Space Administration)
- 200207!000021!5700!CZ62 !smc/Pkj LOS Angeles AFB !F0470102C0002 !A!N! !N! !20011116!20070630!872978978!196596688!834951691!n!lockheed Martin Corporation !1111 Lockheed Martin WAY !sunnyvale !ca!94089!77000!085!06!sunnyvale !santa Clara !california!+000012250000!n!n!000000000000!ar92!rdte/Space - Other - Applied Research !A2 !missile and Space Systems !3gfk!milstar !541710!E! !1! ! ! ! ! !99990909!B! ! !B! !d!n!j!2!001!n!2a!z!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! — $9.0B (Department of Defense)
- Next Generation Overhead Persistent Infrared Geosynchronous Earth Orbit Space Vehicle 1-3 Phase 1 — $7.3B (Department of Defense)
- Federal Contract — $7.3B (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)