NASA's $345M Lockheed Martin Contract for NOAA Satellites: R&D Spending Under Scrutiny
Contract Overview
Contract Amount: $344,740,200 ($344.7M)
Contractor: Lockheed Martin Corporation
Awarding Agency: National Aeronautics and Space Administration
Start Date: 1999-10-01
End Date: 2009-09-30
Contract Duration: 3,652 days
Daily Burn Rate: $94.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: R&D
Official Description: NOAA-K, L, & M SUPPORT
Place of Performance
Location: HIGHTSTOWN, MERCER County, NEW JERSEY, 08520
Plain-Language Summary
National Aeronautics and Space Administration obligated $344.7 million to LOCKHEED MARTIN CORPORATION for work described as: NOAA-K, L, & M SUPPORT Key points: 1. Significant R&D investment of $345M over 10 years. 2. Sole-source award to Lockheed Martin raises competition concerns. 3. Potential for cost overruns given the Cost Plus Award Fee structure. 4. Contract spans critical Earth observation capabilities for NOAA.
Value Assessment
Rating: questionable
The $345M contract value over 10 years averages $34.5M annually. Benchmarking is difficult without specific contract details, but the Cost Plus Award Fee structure suggests potential for costs to exceed initial estimates.
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 limits price discovery and potentially leads to higher costs compared to a competitive process.
Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for these services.
Public Impact
Impacts critical NOAA satellite data used for weather forecasting and climate monitoring. Long-term contract duration suggests sustained reliance on Lockheed Martin's capabilities. Potential for cost overruns could divert funds from other essential government programs.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Award Fee structure
- Long contract duration (10 years)
Positive Signals
- Supports critical NOAA missions
- Long-term partnership with established contractor
Sector Analysis
This contract falls under Research and Development in the Physical, Engineering, and Life Sciences (NAICS 541710). Spending in this sector is crucial for technological advancement but requires careful oversight to ensure value for money.
Small Business Impact
The contract was awarded to Lockheed Martin Corporation, a large business. There is no indication of small business participation in this specific award.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the contractor is meeting performance expectations and that costs remain reasonable. The Cost Plus Award Fee structure requires robust monitoring of award criteria.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences
- National Aeronautics and Space Administration Contracting
- National Aeronautics and Space Administration Programs
Risk Flags
- Lack of competition
- Cost Plus Award Fee structure
- Long contract duration
- Potential for cost overruns
- Limited transparency on justification
Tags
research-and-development-in-the-physical, national-aeronautics-and-space-administr, nj, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
National Aeronautics and Space Administration awarded $344.7 million to LOCKHEED MARTIN CORPORATION. NOAA-K, L, & M SUPPORT
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORPORATION.
Which agency awarded this contract?
Awarding agency: National Aeronautics and Space Administration (National Aeronautics and Space Administration).
What is the total obligated amount?
The obligated amount is $344.7 million.
What is the period of performance?
Start: 1999-10-01. End: 2009-09-30.
What specific factors justified the sole-source award to Lockheed Martin for the NOAA K, L, & M support, and were alternatives considered?
Justification for sole-source awards typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Without detailed documentation, it's difficult to assess if alternatives were thoroughly explored or if the justification holds up under scrutiny. This lack of competition raises concerns about potential price inflation and reduced innovation.
How does the Cost Plus Award Fee (CPAF) structure impact the overall cost and risk for taxpayers on this $345M contract?
A CPAF contract allows the contractor to recover costs plus a base fee, with the potential for an award fee based on performance. While intended to incentivize good performance, it can lead to higher overall costs if performance targets are easily met or if the base fee is substantial. Taxpayers bear the risk of cost overruns and potentially paying more than necessary if oversight is insufficient.
What are the long-term implications for NOAA's satellite capabilities and data continuity given this 10-year sole-source award?
A 10-year sole-source award could create vendor lock-in, potentially stifling innovation and making it difficult for NOAA to adopt newer technologies or switch providers in the future. While ensuring continuity with a known entity, it might also limit flexibility and competitive pressure to improve services over the contract's lifespan.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences
Product/Service Code: RESEARCH AND DEVELOPMENT › Space R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: INTERSECTION RT. 571/535, PRINCETON, NJ, 12
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $307,291,156
Exercised Options: $307,291,156
Current Obligation: $344,740,200
Timeline
Start Date: 1999-10-01
Current End Date: 2009-09-30
Potential End Date: 2009-09-30 00:00:00
Last Modified: 2010-09-21
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