DoD Awards $117.8M to Lockheed Martin for Guided Missile Components, Lacking Competition
Contract Overview
Contract Amount: $117,781,116 ($117.8M)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2017-06-15
End Date: 2024-06-28
Contract Duration: 2,570 days
Daily Burn Rate: $45.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: LGTR (USN) BDU-59B/B
Place of Performance
Location: ARCHBALD, LACKAWANNA County, PENNSYLVANIA, 18403
Plain-Language Summary
Department of Defense obligated $117.8 million to LOCKHEED MARTIN CORP for work described as: LGTR (USN) BDU-59B/B Key points: 1. Significant contract value of $117.8 million awarded. 2. Sole-source award to Lockheed Martin suggests limited competition. 3. Potential risk associated with lack of competitive bidding. 4. Spending falls within the Guided Missile and Space Vehicle Manufacturing sector.
Value Assessment
Rating: questionable
The contract value of $117.8 million for BDU-59B/B components is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar contracts or alternative suppliers.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor, Lockheed Martin, was solicited. This significantly limits price discovery and may lead to higher costs for taxpayers.
Taxpayer Impact: The lack of competition in this sole-source award raises concerns about potential overspending and the efficient use of taxpayer funds.
Public Impact
Taxpayers may be paying a premium due to the absence of competitive pricing. The long contract duration (2570 days) means this pricing will be locked in for an extended period. Dependence on a single supplier for critical missile components could pose supply chain risks.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Long contract duration
Positive Signals
- Established contractor
- Firm Fixed Price contract type
Sector Analysis
This contract falls under the Guided Missile and Space Vehicle Manufacturing sector, a critical area for defense spending. Benchmarks for this sector are often high due to specialized requirements and R&D.
Small Business Impact
The contract was not awarded to a small business. There is no indication of subcontracting opportunities for small businesses within this sole-source award.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the government is receiving fair value. Accountability for the pricing and performance rests heavily on the contracting agency.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits competition and price discovery.
- Potential for inflated pricing due to lack of competitive pressure.
- Long contract duration (2570 days) locks in pricing for an extended period.
- No small business participation is evident.
- Dependence on a single supplier creates supply chain vulnerability.
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, pa, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $117.8 million to LOCKHEED MARTIN CORP. LGTR (USN) BDU-59B/B
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 Navy).
What is the total obligated amount?
The obligated amount is $117.8 million.
What is the period of performance?
Start: 2017-06-15. End: 2024-06-28.
What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure the price is fair and reasonable?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or a lack of viable alternatives. The contracting agency should have conducted a price analysis, potentially using historical data or independent cost estimates, to validate the reasonableness of the price. However, without competition, this analysis is inherently less robust.
What are the potential risks associated with relying on a single supplier for these critical missile components over a 7-year period?
Risks include supply chain disruptions if the sole supplier faces production issues, quality control problems, or geopolitical instability. Furthermore, the government loses leverage to negotiate better terms or pricing if alternative suppliers emerge or if the current supplier's costs increase significantly.
How does the firm fixed price (FFP) contract type impact the government's financial risk and the contractor's incentive for cost control?
An FFP contract shifts most of the cost risk to the contractor, providing the government with cost certainty. This incentivizes the contractor to manage costs effectively to maximize profit. However, for sole-source contracts, the initial price negotiation is crucial, as the government has less recourse if costs are higher than anticipated.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing
Product/Service Code: GUIDED MISSLES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0001916R4500
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 459 KENNEDY DR, ARCHBALD, PA, 18403
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $161,750,031
Exercised Options: $117,781,116
Current Obligation: $117,781,116
Actual Outlays: $12,581,468
Subaward Activity
Number of Subawards: 480
Total Subaward Amount: $94,837,824
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2017-06-15
Current End Date: 2024-06-28
Potential End Date: 2024-06-28 00:00:00
Last Modified: 2024-05-03
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