DOE's $48B Facilities Support Services contract to Lockheed Martin spans 24 years, ending in 2017
Contract Overview
Contract Amount: $48,066,473,049 ($48.1B)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Energy
Start Date: 1993-10-15
End Date: 2017-04-30
Contract Duration: 8,598 days
Daily Burn Rate: $5.6M/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Place of Performance
Location: ALBUQUERQUE, BERNALILLO County, NEW MEXICO, 87185
Plain-Language Summary
Department of Energy obligated $48.07 billion to LOCKHEED MARTIN CORP for work described as: Key points: 1. The contract's extensive duration suggests a long-term need for facilities support services. 2. A single award over such a long period may indicate limited competition or specialized capabilities. 3. The Cost Plus Award Fee (CPA) structure incentivizes performance but requires careful oversight to manage costs. 4. The contract's significant value raises questions about cost-effectiveness over its multi-decade lifespan. 5. The absence of small business set-asides warrants examination of subcontracting opportunities. 6. The geographic focus on New Mexico is a key characteristic of this large federal expenditure.
Value Assessment
Rating: questionable
Benchmarking the value of this contract is challenging due to its historical nature and long duration. The total obligated amount of $48 billion over 24 years averages approximately $2 billion per year. Without comparable contracts from the same period for similar services, assessing value for money is difficult. The Cost Plus Award Fee (CPA) structure, while common, can lead to cost overruns if not managed rigorously. The sheer scale and longevity suggest potential inefficiencies may have accumulated over time.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. However, the fact that it resulted in a single award to Lockheed Martin for such an extended period (24 years) raises questions about the sustained competitive landscape for these specific facilities support services. It's possible that initial competition was robust, but the nature of the services or contractor performance led to subsequent renewals or modifications that maintained a single provider.
Taxpayer Impact: While awarded competitively, the long-term single-award nature may have limited price discovery and potential savings for taxpayers over the contract's extensive life.
Public Impact
The Department of Energy benefits from comprehensive facilities support services, ensuring operational continuity at its sites. This contract supports critical infrastructure management, including maintenance, operations, and potentially security for DOE facilities. The primary geographic impact is in New Mexico, where DOE has significant operations. The contract likely supports a substantial workforce, both directly employed by Lockheed Martin and its subcontractors, contributing to the local economy in New Mexico.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- The extremely long duration (24 years) raises concerns about potential cost creep and lack of re-competition, which could lead to reduced value for money over time.
- The Cost Plus Award Fee (CPA) structure, while performance-incentivized, requires robust oversight to prevent uncontrolled cost growth.
- The absence of explicit small business set-aside information suggests a potential missed opportunity to foster small business participation in a large federal contract.
Positive Signals
- The contract was awarded through full and open competition, indicating an initial effort to secure competitive pricing and best value.
- The long duration suggests a high level of contractor performance and reliability, meeting the sustained needs of the Department of Energy.
- The significant value of the contract implies the provision of critical and extensive services essential to the agency's mission.
Sector Analysis
This contract falls within the Facilities Support Services sector, a broad category encompassing a wide range of services necessary for the operation and maintenance of government facilities. This sector is characterized by large, long-term contracts, often awarded to major defense and aerospace contractors due to the scale and complexity of requirements. The Department of Energy's need for such services is critical for managing its extensive and often unique operational sites. Comparable spending benchmarks are difficult to establish due to the unique nature of DOE facilities and the historical context of this specific award.
Small Business Impact
The contract details indicate that small business participation was not a primary set-aside objective (ss: false, sb: false). This suggests that the primary award was likely made to a large business, and any small business involvement would be through subcontracting. Analysis of subcontracting plans and performance would be necessary to determine the extent to which small businesses benefited from this significant federal expenditure. The lack of a specific set-aside may limit direct opportunities for small businesses to compete for the prime contract.
Oversight & Accountability
Oversight for this contract would have been managed by the Department of Energy. Given its long duration and Cost Plus Award Fee structure, rigorous oversight mechanisms, including regular performance reviews, cost audits, and award fee evaluations, would have been essential. Transparency would be facilitated through contract reporting requirements. Inspector General jurisdiction would apply to investigations of fraud, waste, and abuse related to the contract.
Related Government Programs
- Department of Energy Operations and Maintenance Contracts
- Federal Facilities Management Services
- Large-Scale Government Support Services
- Cost-Plus Award Fee Contracts
- Long-Term Government Contracts
Risk Flags
- Long Contract Duration
- Cost Plus Award Fee Structure
- Potential for Cost Overruns
- Limited Visibility into Performance Metrics
- Lack of Recent Competition Data
Tags
facilities-support-services, department-of-energy, lockheed-martin-corp, definitive-contract, full-and-open-competition, cost-plus-award-fee, new-mexico, large-contract, long-term-contract, historical-spending, facilities-management
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $48.07 billion to LOCKHEED MARTIN CORP. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORP.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $48.07 billion.
What is the period of performance?
Start: 1993-10-15. End: 2017-04-30.
What was the specific scope of facilities support services provided under this contract?
The contract, NAICS code 561210 (Facilities Support Services), likely encompassed a broad range of services essential for the operation and maintenance of Department of Energy (DOE) facilities. This typically includes services such as facility maintenance and repair, custodial services, groundskeeping, security, transportation, mail services, and potentially specialized support related to DOE's unique mission requirements, such as environmental services or infrastructure management. The definitive contract award type suggests a broad scope that could evolve over its long duration. Specific details would be found in the contract's Statement of Work (SOW) and subsequent modifications, which are not provided in the summary data.
How did the Cost Plus Award Fee (CPA) structure influence contractor performance and costs over the contract's lifespan?
The Cost Plus Award Fee (CPA) structure is designed to reimburse the contractor for allowable costs incurred while also providing an incentive for superior performance through an award fee. Under this structure, the contractor receives a base fee (often a percentage of costs) and an additional award fee based on performance metrics defined in the contract. For this $48 billion contract spanning 24 years, the CPA likely encouraged Lockheed Martin to meet or exceed performance targets related to facilities operations, maintenance, and potentially safety or efficiency. However, it also necessitates robust government oversight to ensure that costs remain reasonable and that the award fee criteria are objective and consistently applied. Without detailed performance reviews and cost audits, it's difficult to definitively assess whether the award fee effectively controlled costs or led to significant overspending compared to other contract types.
What were the key performance indicators (KPIs) used to determine the award fee for Lockheed Martin?
The specific Key Performance Indicators (KPIs) used to determine the award fee for this contract are not detailed in the provided summary data. Typically, for Facilities Support Services contracts of this magnitude, KPIs would focus on areas such as facility uptime and reliability, response times for maintenance requests, energy efficiency targets, safety incident rates, customer satisfaction (e.g., from DOE facility users), compliance with environmental regulations, and successful completion of special projects. The government contracting officer and their team would periodically evaluate the contractor's performance against these pre-defined metrics to determine the amount of award fee earned. The effectiveness of the award fee mechanism hinges on the clarity, measurability, and relevance of these KPIs to the overall mission objectives.
Given the contract's end date of April 30, 2017, what subsequent arrangements has the Department of Energy made for these facilities support services?
The contract's expiration on April 30, 2017, indicates that the Department of Energy (DOE) would have needed to establish new arrangements for facilities support services at the affected sites. This could have involved re-competing the requirement through a new solicitation, potentially with updated scopes of work or different contract structures. Alternatively, the DOE might have awarded bridge contracts to ensure continuity of services while a new competition was underway, or they may have transitioned services to other existing contracts or internal resources. Without further information on subsequent contract awards or procurements by the DOE for facilities support in New Mexico post-2017, the exact nature of the follow-on arrangements remains unknown.
How does the $48 billion total obligation compare to annual federal spending on facilities support services across government agencies?
The total obligation of approximately $48 billion over 24 years for this single Department of Energy (DOE) contract represents an average annual spending of roughly $2 billion. This figure, while substantial, needs to be contextualized within the broader landscape of federal facilities support spending. Government-wide, federal agencies spend hundreds of billions of dollars annually on operations, maintenance, and support services for their vast real estate portfolios. This DOE contract, focused on a specific agency and geographic region, would represent a significant portion of DOE's own facilities budget but likely a smaller fraction of the total federal expenditure on such services. Benchmarking requires comparing it to similar large-scale, long-term contracts across agencies like the Department of Defense or General Services Administration.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services
Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Offers Received: 2
Pricing Type: COST PLUS AWARD FEE (R)
Contractor Details
Address: 12257 S WADSWORTH BLVD, LITTLETON, CO, 80125
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $48,207,126,519
Exercised Options: $48,207,126,519
Current Obligation: $48,066,473,049
Actual Outlays: $-4,239,283
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Timeline
Start Date: 1993-10-15
Current End Date: 2017-04-30
Potential End Date: 2017-04-30 00:00:00
Last Modified: 2024-08-29
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