DoD Awards Lockheed Martin $191M for MBRV/RVSM Development, Research Focused on Missile Defense
Contract Overview
Contract Amount: $191,245,285 ($191.2M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2017-11-17
End Date: 2027-01-31
Contract Duration: 3,362 days
Daily Burn Rate: $56.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIXED PRICE INCENTIVE
Sector: R&D
Official Description: MBRV/RVSM -7C2/-8C2 DEVELOPMENT&PRODUCTION
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35805
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $191.2 million to LOCKHEED MARTIN CORPORATION for work described as: MBRV/RVSM -7C2/-8C2 DEVELOPMENT&PRODUCTION Key points: 1. Significant R&D investment in advanced missile defense systems. 2. Sole awardee Lockheed Martin suggests specialized capabilities required. 3. Fixed Price Incentive contract type aims to balance cost and performance. 4. Long-term contract duration (2017-2027) indicates ongoing development needs.
Value Assessment
Rating: fair
The contract value of $191.2M over approximately 9 years is substantial for R&D. Benchmarking is difficult without specific system details, but the fixed-price incentive structure suggests a focus on managing costs while achieving performance targets.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating multiple bidders were likely considered. The specific awardee, Lockheed Martin, suggests they possess unique or highly competitive capabilities for this specialized missile defense development.
Taxpayer Impact: Taxpayer funds are directed towards critical national security research and development, aiming for advanced defense capabilities. The long-term nature and incentive structure suggest a commitment to achieving specific technological advancements.
Public Impact
Enhances national security through advanced missile defense technology. Supports high-tech R&D jobs within the defense sector. Potential for technological spin-offs benefiting other industries. Long-term commitment to a specific defense program.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration may lead to scope creep or cost overruns.
- Fixed Price Incentive contracts can be complex to manage.
- Reliance on a single contractor for critical R&D.
Positive Signals
- Investment in cutting-edge missile defense technology.
- Full and open competition initially ensures best value.
- Incentive structure encourages contractor performance.
Sector Analysis
This contract falls under Research and Development in Physical, Engineering, and Life Sciences. Spending in this sector is crucial for technological advancement and national security, with significant government investment often directed towards defense-related R&D.
Small Business Impact
No specific small business set-aside is indicated. The prime contractor, Lockheed Martin, is a large aerospace and defense company, suggesting subcontracting opportunities may exist for small businesses within their supply chain.
Oversight & Accountability
The Missile Defense Agency is responsible for this contract. Oversight would focus on ensuring Lockheed Martin meets performance milestones and cost targets within the fixed-price incentive framework, with regular reporting and reviews.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
- Department of Defense Contracting
- Missile Defense Agency Programs
Risk Flags
- Long-term contract duration increases risk of cost escalation.
- Complexity of Fixed Price Incentive contracts.
- Potential for technological obsolescence during development.
- Reliance on a single prime contractor for critical capability.
Tags
research-and-development-in-the-physical, department-of-defense, al, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $191.2 million to LOCKHEED MARTIN CORPORATION. MBRV/RVSM -7C2/-8C2 DEVELOPMENT&PRODUCTION
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Missile Defense Agency).
What is the total obligated amount?
The obligated amount is $191.2 million.
What is the period of performance?
Start: 2017-11-17. End: 2027-01-31.
What specific technological advancements are expected from the MBRV/RVSM program, and how do they align with current and future missile threats?
The MBRV/RVSM program likely focuses on developing and producing advanced interceptor technologies or missile defense system components. Specific advancements would target enhanced speed, maneuverability, and countermeasure resistance for interceptors, crucial for addressing evolving ballistic and hypersonic missile threats. Alignment involves ensuring these capabilities provide a robust defense against projected adversarial arsenals.
How effectively does the Fixed Price Incentive (FPI) contract structure manage risk for both the government and the contractor in this long-term R&D effort?
The FPI structure aims to share risk. The government benefits from a target cost and profit, with incentives for the contractor to stay below the target. However, the contractor assumes more risk if costs exceed the target, up to a ceiling. For long-term R&D, this can incentivize innovation but also requires careful negotiation of targets and sharing formulas to prevent excessive cost growth or contractor disengagement.
What is the projected return on investment for taxpayers, considering the significant R&D expenditure and the strategic importance of missile defense?
The primary return on investment is enhanced national security, deterring potential adversaries and protecting critical assets. Quantifying a direct financial ROI is challenging for defense R&D. However, the strategic value of a credible missile defense system, preventing catastrophic attacks and maintaining global stability, represents an immeasurable return. Technological advancements may also yield economic benefits through spin-offs.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
Product/Service Code: GUIDED MISSLES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: HQ014717R0002
Offers Received: 2
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Address: 4800 BRADFORD DR NW, HUNTSVILLE, AL, 35805
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $290,248,815
Exercised Options: $227,772,618
Current Obligation: $191,245,285
Subaward Activity
Number of Subawards: 256
Total Subaward Amount: $248,625,883
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2017-11-17
Current End Date: 2027-01-31
Potential End Date: 2027-01-31 00:00:00
Last Modified: 2025-12-04
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