DoD's $94.5M R&D Contract with Lockheed Martin: High Cost, Limited Competition
Contract Overview
Contract Amount: $11,606,903 ($11.6M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2001-12-19
End Date: 2008-10-10
Contract Duration: 2,487 days
Daily Burn Rate: $4.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: 200204!000440!1700!E612A !OFFICE OF NAVAL RESEARCH, HEADQU!N0001402C0007 !A!N! !N! !20011219!20031231!945757268!805258373!834951691!N!LOCKHEED MARTIN CORPORATION !1210 MASSILLON ROAD !AKRON !OH!44315!01000!153!39!AKRON !SUMMIT !OHIO !+000001781000!N!N!000000000000!AD93!RDTE/OTHER DEFENSE-ADV TECH DEV !S1 !SERVICES !2000!NOT DISCERNABLE OR CLASSIFIED !541710!E! !3! ! ! ! ! !99990909!B! ! !A! !A!N!U!2!002!E! !Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001!
Place of Performance
Location: AKRON, SUMMIT County, OHIO, 44315
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $11.6 million to LOCKHEED MARTIN CORPORATION for work described as: 200204!000440!1700!E612A !OFFICE OF NAVAL RESEARCH, HEADQU!N0001402C0007 !A!N! !N! !20011219!20031231!945757268!805258373!834951691!N!LOCKHEED MARTIN CORPORATION !1210 MASSILLON ROAD !AKRON !OH!44315!01000!153!39!AKRON !SUMMI… Key points: 1. This contract represents a significant investment in advanced defense technology development. 2. Lockheed Martin, a major defense contractor, is the sole awardee, raising questions about competition. 3. The cost-plus-fixed-fee structure may lead to cost overruns, posing a financial risk. 4. Spending is concentrated in the R&D sector, specifically advanced defense technologies.
Value Assessment
Rating: questionable
The contract's value of $94.5M for 2487 days (approx. 6.8 years) suggests a high per-diem cost. Without specific deliverables or benchmarks, it's difficult to definitively assess value, but the duration and cost warrant scrutiny.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Although listed as 'full and open competition,' the award to a single entity, Lockheed Martin, suggests potential limitations in the bidding process or a highly specialized requirement. This could impact price discovery and potentially lead to higher costs.
Taxpayer Impact: The substantial value of this contract means taxpayer funds are being allocated to a specific defense contractor, with the ultimate benefit to national security needing to be weighed against the cost and competitive landscape.
Public Impact
Taxpayers are funding advanced research and development for the Department of Defense. The contract supports a major defense contractor, potentially impacting the broader defense industrial base. The specific R&D outcomes could lead to future technological advancements or procurements.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee contract type can incentivize higher spending.
- Limited apparent competition despite 'full and open' designation.
- Long contract duration may obscure true value and performance.
- Lack of specific performance metrics in provided data.
Positive Signals
- Supports critical defense R&D.
- Engages a key defense contractor.
- Potential for technological innovation.
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on advanced defense technologies. Spending in this area is crucial for maintaining a technological edge but often involves higher costs and longer timelines compared to standard procurement.
Small Business Impact
The data indicates this contract was awarded to Lockheed Martin Corporation, a large prime contractor. There is no information provided to suggest subcontracting opportunities for small businesses on this specific award.
Oversight & Accountability
The contract is managed by the Department of Defense, likely through its various oversight bodies and the Defense Contract Management Agency. The effectiveness of this oversight in controlling costs and ensuring performance for a long-term R&D contract is critical.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Potential for cost overruns due to CPFF structure.
- Lack of clear competition despite 'full and open' designation.
- Long contract duration makes performance and value assessment difficult.
- Limited transparency on specific R&D deliverables and outcomes.
- High contract value concentrated with a single large contractor.
Tags
research-and-development-in-the-physical, department-of-defense, oh, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $11.6 million to LOCKHEED MARTIN CORPORATION. 200204!000440!1700!E612A !OFFICE OF NAVAL RESEARCH, HEADQU!N0001402C0007 !A!N! !N! !20011219!20031231!945757268!805258373!834951691!N!LOCKHEED MARTIN CORPORATION !1210 MASSILLON ROAD !AKRON !OH!44315!01000!153!39!AKRON !SUMMIT !OHIO !+000001781000!N!N!000000000000!AD93!RDTE/OTHER DEFENSE-ADV TECH DEV !S1 !SERVICES !2000!NOT DISCERNABLE OR CLASSIFIED !541710!E! !3! ! ! ! ! !99990909!B
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $11.6 million.
What is the period of performance?
Start: 2001-12-19. End: 2008-10-10.
What specific technological advancements are expected from this $94.5M R&D investment, and how will their value be measured?
The provided data lacks specifics on the expected technological advancements. Measuring the value of R&D is inherently challenging, often assessed through milestones, prototypes, or eventual integration into defense systems. Further documentation would be needed to understand the specific metrics and expected outcomes tied to this significant investment.
Given the 'full and open competition' label but sole awardee, what factors led to Lockheed Martin being the only selected bidder?
Several factors could explain this outcome. The requirement might have been highly specialized, necessitating unique capabilities possessed only by Lockheed Martin. Alternatively, the solicitation process itself might have inadvertently favored incumbent or specific expertise, or perhaps other potential bidders chose not to compete due to perceived barriers or lack of alignment with the solicitation's technical demands.
How does the cost-plus-fixed-fee structure for this long-term R&D contract ensure efficient use of taxpayer funds?
Cost-plus-fixed-fee contracts aim to provide a base profit margin for the contractor while covering costs. However, for long-term R&D, this structure can create less incentive for cost efficiency compared to fixed-price contracts. Robust government oversight, clear performance metrics, and defined ceilings are crucial to mitigate risks of cost overruns and ensure taxpayer funds are used effectively.
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 › DEFENSE (OTHER) R&D
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: BASIC RESEARCH
Offers Received: 2
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: 1210 MASSILLIN RD, AKRON, OH, 13
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: $11,280,932
Exercised Options: $1,490,466
Current Obligation: $11,606,903
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2001-12-19
Current End Date: 2008-10-10
Potential End Date: 2008-10-10 00:00:00
Last Modified: 2014-08-27
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