DoD awards $855M to Lockheed Martin for Trident II missile support, a sole-source contract
Contract Overview
Contract Amount: $854,971,244 ($855.0M)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2009-10-29
End Date: 2015-04-30
Contract Duration: 2,009 days
Daily Burn Rate: $425.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: UCA FOR FY10 PRODUCTION AND DEPLOYED SYSTEMS SUPPORT FOR TRIDENT II (D5) MISSILE SYSTEM
Place of Performance
Location: SUNNYVALE, SANTA CLARA County, CALIFORNIA, 94088
Plain-Language Summary
Department of Defense obligated $855.0 million to LOCKHEED MARTIN CORP for work described as: UCA FOR FY10 PRODUCTION AND DEPLOYED SYSTEMS SUPPORT FOR TRIDENT II (D5) MISSILE SYSTEM Key points: 1. Significant investment in a critical defense system. 2. Sole-source award raises questions about price discovery. 3. Long contract duration (6 years) suggests ongoing need. 4. High value contract for a specialized manufacturing sector.
Value Assessment
Rating: questionable
The contract value of $855M over 6 years is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential alternatives or market rates for similar complex systems support.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there is no market pressure to offer the best price.
Taxpayer Impact: The lack of competition for this significant defense contract may result in taxpayer funds being used less efficiently than if a competitive process had been employed.
Public Impact
Ensures continued operational readiness of the Trident II (D5) missile system. Supports advanced manufacturing and high-tech jobs within the defense sector. Contributes to national security through the maintenance of strategic deterrence capabilities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- High contract value
Positive Signals
- Critical defense system support
- Long-term contract stability
Sector Analysis
This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a highly specialized area of defense industrial base. Spending in this niche is driven by national security requirements and technological complexity.
Small Business Impact
The data indicates this contract was awarded to Lockheed Martin Corp, a large prime contractor. There is no explicit information on subcontracting opportunities for small businesses within this award, which is common for large, sole-source defense contracts.
Oversight & Accountability
As a sole-source award for a critical defense system, oversight would focus on ensuring performance standards are met and that costs are reasonable, despite the absence of competitive pressure. The Department of the Navy is responsible for this oversight.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits price competition.
- Potential for cost overruns without competitive pressure.
- Long-term duration may mask inefficiencies.
- Lack of transparency on small business participation.
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, ca, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $855.0 million to LOCKHEED MARTIN CORP. UCA FOR FY10 PRODUCTION AND DEPLOYED SYSTEMS SUPPORT FOR TRIDENT II (D5) MISSILE SYSTEM
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 $855.0 million.
What is the period of performance?
Start: 2009-10-29. End: 2015-04-30.
What is the justification for the sole-source award, and has it been reviewed for potential competition?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. A thorough review should confirm that no viable alternatives exist and that competition, even if limited, was not feasible. This ensures taxpayer funds are used appropriately when competitive options are unavailable.
How are cost efficiencies ensured in a sole-source contract of this magnitude?
Cost efficiencies in sole-source contracts are typically managed through robust contract clauses like incentive fees, target costs, and ceilings. Detailed cost audits, performance metrics, and regular negotiations are crucial. The government must actively monitor contractor performance and expenditures to ensure value for money, even without direct price competition.
What is the long-term strategy for ensuring competitive pricing for future support of the Trident II (D5) missile system?
The long-term strategy should involve exploring options to foster future competition, such as encouraging technology maturation, developing alternative sources, or breaking down the requirement into smaller, more competitive packages. Periodic market research and engagement with potential new entrants can help identify opportunities to introduce competition and drive down costs over the system's lifecycle.
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
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Address: 1111 LOCKHEED MARTIN WAY BLDG 157, SUNNYVALE, CA, 94089
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $1,724,856,553
Exercised Options: $1,724,623,392
Current Obligation: $854,971,244
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2009-10-29
Current End Date: 2015-04-30
Potential End Date: 2015-04-30 00:00:00
Last Modified: 2019-09-13
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