Lockheed Martin awarded $64.1M contract for critical IT functions by Social Security Administration

Contract Overview

Contract Amount: $64,138,857 ($64.1M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Social Security Administration

Start Date: 2012-09-29

End Date: 2013-09-28

Contract Duration: 364 days

Daily Burn Rate: $176.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: IGF::CT::IGF LM ITSSC LM REQUIREMENTS "CRITICAL FUNCTIONS" THE AMOUNT OF FUNDS COMMITTED ON THIS AWARD EXCEEDS THE AMOUNT ON THE OBLIGATING AR (3306-12-0560) BY $1.23, AS ALLOWED IN H2332.702(A)(3).

Place of Performance

Location: BALTIMORE, BALTIMORE (CITY) County, MARYLAND, 21235

State: Maryland Government Spending

Plain-Language Summary

Social Security Administration obligated $64.1 million to LOCKHEED MARTIN CORPORATION for work described as: IGF::CT::IGF LM ITSSC LM REQUIREMENTS "CRITICAL FUNCTIONS" THE AMOUNT OF FUNDS COMMITTED ON THIS AWARD EXCEEDS THE AMOUNT ON THE OBLIGATING AR (3306-12-0560) BY $1.23, AS ALLOWED IN H2332.702(A)(3). Key points: 1. Contract value significantly exceeds prior related obligations, indicating potential scope expansion or increased service costs. 2. Awarded under full and open competition, suggesting a robust market response and potential for competitive pricing. 3. The contract's Time and Materials (T&M) pricing structure may present cost control challenges if not closely managed. 4. Performance is concentrated in Maryland, potentially impacting local IT workforce dynamics. 5. The 'Other Computer Related Services' NAICS code suggests a broad range of IT support activities. 6. No small business set-aside was utilized, indicating the primary awardee is a large corporation.

Value Assessment

Rating: fair

The contract's total value of $64.1 million for a one-year duration is substantial. Benchmarking against similar IT support contracts for federal agencies is difficult without more granular service details. However, the Time and Materials (T&M) pricing model, while common for evolving IT needs, can lead to higher costs if not meticulously managed and monitored for efficiency. The significant increase in committed funds compared to a prior obligating action warrants scrutiny to ensure value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The presence of a single award suggests that Lockheed Martin Corporation was selected as the most advantageous offer. The level of competition, while broad in initial opportunity, resulted in a single prime contractor, which is typical for complex IT service requirements.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation. However, the ultimate impact on price discovery depends on the number and quality of bids received and the negotiation process.

Public Impact

The Social Security Administration (SSA) benefits through the continued provision of critical IT functions essential for its operations. Services delivered likely encompass a wide range of IT support, maintenance, and potentially development, ensuring the stability of SSA's systems. The geographic impact is primarily concentrated in Maryland, where the contractor's performance is likely based. Workforce implications may include employment opportunities for IT professionals within Lockheed Martin and its potential subcontractors in the Maryland region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Time and Materials (T&M) contract type can lead to cost overruns if not managed with strict oversight and performance metrics.
The significant increase in committed funds compared to a prior obligating action requires detailed justification to ensure fiscal responsibility.
Lack of specific performance metrics or service level agreements (SLAs) in the provided data makes it difficult to assess performance quality.
Concentration of a large federal IT contract in a single geographic area (Maryland) could limit broader economic benefits.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that likely yielded a qualified and potentially cost-effective solution.
Lockheed Martin Corporation is a large, established defense and technology contractor with significant experience in complex IT systems.
The contract addresses 'critical functions,' implying essential services that are vital to the agency's mission.
The contract duration of 364 days provides a defined period for service delivery and performance evaluation.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on IT services and support. The market for federal IT services is substantial, with agencies increasingly relying on contractors for specialized expertise and system maintenance. Comparable spending benchmarks would typically involve analyzing other large IT support contracts awarded by agencies like the SSA, Department of Defense, or other civilian agencies, considering factors like contract type, duration, and scope of services.

Small Business Impact

This contract was not awarded as a small business set-aside, as indicated by 'ss: false' and 'sb: false'. This means the primary contract was competed broadly, and the prime contractor, Lockheed Martin Corporation, is a large business. There is no direct indication of subcontracting plans for small businesses from the provided data, though large prime contractors often utilize small businesses for specific components or services. The absence of a set-aside means direct opportunities for small businesses to prime this specific contract were limited.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the contracting officer's representative (COR) at the Social Security Administration, who is responsible for monitoring performance, approving invoices, and ensuring compliance with contract terms. The contract's Time and Materials (T&M) nature necessitates rigorous oversight to control costs and ensure efficient resource utilization. Transparency is generally facilitated through contract databases like FPDS, where award details are published. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract is suspected.

Related Government Programs

IT Services for Federal Agencies
Social Security Administration IT Modernization
Large-Scale IT Support Contracts
Time and Materials Contracts
Lockheed Martin Federal Contracts

Risk Flags

Potential for cost overruns due to T&M contract type.
Lack of specific performance metrics in provided data.
Significant contract value requires robust oversight.
Concentration of services in a single geographic location.

Frequently Asked Questions

What is this federal contract paying for?

Social Security Administration awarded $64.1 million to LOCKHEED MARTIN CORPORATION. IGF::CT::IGF LM ITSSC LM REQUIREMENTS "CRITICAL FUNCTIONS" THE AMOUNT OF FUNDS COMMITTED ON THIS AWARD EXCEEDS THE AMOUNT ON THE OBLIGATING AR (3306-12-0560) BY $1.23, AS ALLOWED IN H2332.702(A)(3).

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORPORATION.

Which agency awarded this contract?

Awarding agency: Social Security Administration (Social Security Administration).

What is the total obligated amount?

The obligated amount is $64.1 million.

What is the period of performance?

Start: 2012-09-29. End: 2013-09-28.

What specific 'critical functions' are covered under this contract?

The provided data snippet does not detail the specific 'critical functions' covered by the contract beyond the general category of 'Other Computer Related Services'. These functions likely encompass a broad spectrum of IT support essential for the Social Security Administration's operations, potentially including system maintenance, network management, help desk support, software updates, cybersecurity measures, and data management. A deeper dive into the contract's Statement of Work (SOW) would be necessary to identify the precise critical functions being performed by Lockheed Martin Corporation.

How does the $64.1 million award compare to historical spending on similar IT services by the SSA?

The provided data indicates that the amount of funds committed on this award exceeds a prior obligating action by $1.23 million. However, to compare this $64.1 million award to historical SSA spending on similar IT services, a broader analysis of past contracts awarded by the SSA for IT support would be required. This would involve examining contract databases for similar NAICS codes (like 541519) and service descriptions over several fiscal years. Without this broader context, it's difficult to ascertain if $64.1 million represents an increase, decrease, or stable level of investment for these critical functions.

What are the potential risks associated with the Time and Materials (T&M) contract type for this award?

The primary risk with a Time and Materials (T&M) contract, especially for a large award like this, is the potential for cost overruns. Unlike fixed-price contracts, T&M contracts reimburse the contractor for direct labor hours at specified rates and for the actual cost of materials. If work is inefficient, scope creep occurs without proper controls, or labor rates are high, the total cost can escalate significantly beyond initial estimates. Effective oversight, detailed tracking of hours and materials, and clear performance expectations are crucial to mitigate these risks and ensure value for taxpayers.

What is Lockheed Martin Corporation's track record with the Social Security Administration and similar federal IT contracts?

Lockheed Martin Corporation is a major aerospace, defense, security, and advanced technologies company with extensive experience in providing IT services to various government agencies, including the federal government. While this specific award is for $64.1 million, the company holds numerous large contracts across different sectors. Its track record with the SSA would need to be assessed by reviewing past awards, performance evaluations (if publicly available), and any reported issues or successes in fulfilling IT service requirements for the agency. Generally, large contractors like Lockheed Martin have established processes for managing complex government contracts.

Given the 'full and open competition,' how many bids were likely received, and what does this imply for price discovery?

The data indicates the contract was awarded under 'full and open competition,' but it does not specify the number of bids received. Typically, for large, complex IT service contracts, multiple bids are expected. The fact that a single award was made suggests that Lockheed Martin was selected as the most advantageous offer based on technical qualifications, past performance, and price. A robust competition with several strong bidders generally leads to better price discovery, as it forces contractors to offer competitive pricing to win the contract. However, the specific number of bidders is key to fully assessing the competitive pressure.

What are the implications of this contract for the IT workforce in Maryland?

This $64.1 million contract awarded to Lockheed Martin Corporation, with a performance location likely in Maryland ('st': 'MD'), suggests a significant investment in IT services within that state. This could translate into job creation or sustained employment for IT professionals, including software developers, system administrators, network engineers, and cybersecurity specialists, either directly by Lockheed Martin or through its subcontractors in the region. The concentration of such a large contract in one area can bolster the local IT ecosystem but may also indicate less geographic distribution of federal IT spending.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 700 N FREDERICK AVE LOC B, GAITHERSBURG, MD, 90

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Federally Funded Research and Development Corp, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $64,138,857

Exercised Options: $64,138,857

Current Obligation: $64,138,857

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $3,454,971

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SS001060108

IDV Type: IDC

Timeline