Navy Awards $1.13 Billion for Guided Missile Launchers to Lockheed Martin
Contract Overview
Contract Amount: $1,126,760,430 ($1.1B)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 1998-01-23
End Date: 2010-06-30
Contract Duration: 4,541 days
Daily Burn Rate: $248.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 199808!1700!1087!BZ005!NAVAL SEA SYSTEMS COMMAND !N0002498C5363 !A!*!* !19980123!20060930!003419090!834951691!834951691!N!38597!LOCKHEED MARTIN CORPORATION !103 CHESAPEAKE PARK PLZ !BALTIMORE !MD!21220!04000!510!24!BALTIMORE !BALTIMORE (CITY) !MARYLAND !0001!+000177109491!N!N!000000000000!1440!LAUNCHERS, GUIDED MISSILE !A5 !WEAPONS !2CLB!GUIDED MSL LAUNCH MK-41 !3489!3!*!*!*!B!A!*!D !U!J!1!001!N!1G!A!Y!A!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!D!N!*!*!*!*!*!
Place of Performance
Location: MIDDLE RIVER, BALTIMORE County, MARYLAND, 21220
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $1.13 billion to LOCKHEED MARTIN CORPORATION for work described as: 199808!1700!1087!BZ005!NAVAL SEA SYSTEMS COMMAND !N0002498C5363 !A!*!* !19980123!20060930!003419090!834951691!834951691!N!38597!LOCKHEED MARTIN CORPORATION !103 CHESAPEAKE PARK PLZ !BALTIMORE !MD!21220!04000!510!24!BALTIMORE !BALTIM… Key points: 1. The contract for MK-41 Guided Missile Launchers was awarded to Lockheed Martin Corporation. 2. This represents a significant investment in naval weapon systems. 3. The contract was not competed, raising potential concerns about price discovery. 4. The sector is Defense, specifically naval weaponry.
Value Assessment
Rating: fair
The total contract value is $1.13 billion. Without comparable contracts or detailed cost breakdowns, it's difficult to definitively assess value for money. However, the scale suggests a substantial procurement.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award. This limits price discovery and may result in higher costs for taxpayers compared to a competitive process.
Taxpayer Impact: The lack of competition for a contract of this magnitude could lead to suboptimal pricing, impacting taxpayer funds.
Public Impact
Enhances U.S. Navy's missile defense capabilities. Supports a major defense contractor, Lockheed Martin. Potential for long-term sustainment and upgrade contracts. Impacts the defense industrial base in Maryland.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition.
- Long contract duration (over 12 years).
- High dollar value.
Positive Signals
- Supports critical naval defense systems.
- Awarded to a major defense prime contractor.
- Long-term commitment provides stability.
Sector Analysis
This contract falls within the Defense sector, specifically focusing on naval weapon systems. Spending benchmarks for such complex systems are highly variable, but $1.13 billion is a substantial amount for a single platform procurement.
Small Business Impact
No specific information is provided regarding small business participation in this contract. Prime contractors like Lockheed Martin often subcontract portions of their work, but the direct award is to a large business.
Oversight & Accountability
The contract was awarded by the Naval Sea Systems Command. Oversight would typically involve program management, quality assurance, and financial tracking by the Department of the Navy to ensure contract compliance and delivery.
Related Government Programs
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award raises concerns about price fairness.
- Long contract duration may lead to cost overruns.
- Lack of transparency in the procurement process.
- Potential for vendor lock-in.
Tags
department-of-defense, md, dca, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.13 billion to LOCKHEED MARTIN CORPORATION. 199808!1700!1087!BZ005!NAVAL SEA SYSTEMS COMMAND !N0002498C5363 !A!*!* !19980123!20060930!003419090!834951691!834951691!N!38597!LOCKHEED MARTIN CORPORATION !103 CHESAPEAKE PARK PLZ !BALTIMORE !MD!21220!04000!510!24!BALTIMORE !BALTIMORE (CITY) !MARYLAND !0001!+000177109491!N!N!000000000000!1440!LAUNCHERS, GUIDED MISSILE !A5 !WEAPONS !2CLB!GUIDED MSL LAUNCH MK-41 !3489!3!*!*!*!B!A!*!D !U!J!1!0
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $1.13 billion.
What is the period of performance?
Start: 1998-01-23. End: 2010-06-30.
What was the justification for the sole-source award of this critical missile launcher system?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or a lack of viable alternative suppliers. For complex defense systems like the MK-41 launcher, specific technical requirements or existing integration with other platforms might necessitate awarding to the incumbent or a single qualified provider to avoid significant delays and costs associated with developing or qualifying a new system.
How does the $1.13 billion price compare to the expected cost for similar missile launcher systems, considering the lack of competition?
Without competitive bidding, a direct cost comparison is challenging. The $1.13 billion price tag for the MK-41 Guided Missile Launchers represents a significant investment. The absence of competition means there's no market-driven price discovery, potentially leading to a higher cost than if multiple vendors had vied for the contract. Benchmarking against historical data or similar systems procured competitively would be necessary for a thorough value assessment.
What are the long-term implications for the Navy's technological advantage and budget given this sole-source, high-value contract?
A sole-source award for a critical system like the MK-41 launcher ensures the Navy receives the necessary technology, albeit potentially at a premium. The long-term implications include maintaining a specific technological capability but also the risk of escalating costs over the system's lifecycle if future modifications or sustainment are also sole-sourced. This necessitates careful budget planning and potentially exploring future competitive opportunities for upgrades or replacements.
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: 103 CHESAPEAKE PARK PLZ, BALTIMORE, MD, 90
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 1998-01-23
Current End Date: 2010-06-30
Potential End Date: 2010-06-30 00:00:00
Last Modified: 2010-01-14
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