THAAD Contract

The Missile Defense Agency has awarded Lockheed Martin's Space Systems division a contract worth nearly $695 million to build and deliver 48 interceptors and ground-support equipment for batteries 3 and 4 of the Terminal High Altitude Area Defense system, according to a Federal Business Opportunities notice issued this morning. The contract -- a "fixed price incentive and cost-plus-fixed-fee modification" -- has a performance period through December 2013.

Last week, MDA announced via FedBizOpps that the agency would "negotiate on a sole source basis" with Lockheed "for the manufacturing of THAAD Production Lot 3." Specifically:

The contracting approach for this manufacturing effort will be to modify the existing Fire Unit Fielding (FUF) Contract HQ0147-07-C-0196. Contract HQ0147-07-C-0196 requires manufacturing, delivery and integration of the THAAD components for fire unit fielding and initial spares. The THAAD Fire Unit Fielding (FUF) components are comprised of the THAAD Launcher, THAAD Fire Control and Communications (TFCC), Interceptors, and Peculiar Support Equipment (PSE). Quantities for Production Lot 3 to be procured are a maximum of 18 launchers, 68 interceptors, 1 Fire Control Suite, and associated PSE. This action is expected to be awarded in 2nd quarter FY12.

The proposed acquisition is directed to LMSSC pursuant to the authority of 10 USC 2304(c)(1) as implemented by FAR 6.302-1(a)(2)(ii), (iii) and (b)(1)(ii). Only one responsible source and no other supplies or services will satisfy agency requirements. LMSSC is the only source that currently possesses the in-depth technical knowledge of the THAAD system requirements to satisfactorily perform the work contemplated herein within the needed timeframe. No other source has access to the required technical data and resident expertise to perform the described effort. This expertise cannot be attained by any other contractor within the anticipated period of performance without incurring an unacceptable delay and risk to the overall program in fulfilling these agency requirements and mission and without incurring a substantial duplication of costs. LMSSC is the system prime contractor for three other THAAD system developmental efforts: Contract DASG60-92-C-0101 ($1.4B), DASG60-00-C-0072 ($6B) and THAAD Field Support Contract HQ0197-10-D-0001 ($435M). Contract DASG60-00-C-0072 will continue through FY11 and the work under this proposed contract action must be completely compatible and fully integrated with the work under the other THAAD development contracts. Only LMSSC is capable of manufacturing the identified THAAD components, combining them into fire units, and successfully integrating these tasks with prior and on-going development work on the THAAD System.