DOJ's $31.3M contract for IT services awarded to Lockheed Martin, highlighting IT system design needs

Contract Overview

Contract Amount: $31,258,830 ($31.3M)

Contractor: Lockheed Martin Services, LLC

Awarding Agency: Department of Justice

Start Date: 2011-12-02

End Date: 2012-05-06

Contract Duration: 156 days

Daily Burn Rate: $200.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS AWARD FEE

Sector: IT

Official Description: CHANGE PROPOSAL FOR INTERSTATE PHOTO

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Justice obligated $31.3 million to LOCKHEED MARTIN SERVICES, LLC for work described as: CHANGE PROPOSAL FOR INTERSTATE PHOTO Key points: 1. The contract's value of $31.3 million for IT system design services suggests a significant investment in federal IT infrastructure. 2. Awarded to Lockheed Martin, a major defense and IT contractor, this contract indicates a reliance on established players for complex IT solutions. 3. The relatively short duration of 156 days for a project of this scale may indicate a focused scope or a phased approach to a larger initiative. 4. The 'Computer Systems Design Services' NAICS code points to a need for specialized expertise in developing and managing IT systems. 5. The 'Cost Plus Award Fee' contract type suggests that performance incentives are tied to achieving specific award criteria, aiming for quality outcomes. 6. The absence of small business set-aside flags indicates that this contract was not specifically targeted to boost small business participation.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific deliverables or performance metrics. However, $31.3 million for 156 days of computer systems design services represents a substantial daily expenditure. Comparing this to similar, large-scale IT system design projects would be necessary to determine if the pricing is competitive. The 'Cost Plus Award Fee' structure implies that the final cost could fluctuate based on performance, making a direct price comparison difficult without understanding the award fee structure and achieved performance levels.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition,' indicating that all responsible sources were permitted to submit bids. This approach is generally favored for maximizing competition and potentially achieving better pricing and quality. The number of bidders (3) is on the lower side for a full and open competition of this value, which could suggest a specialized requirement or a market with limited qualified vendors. A low number of bidders might reduce price pressure.

Taxpayer Impact: A full and open competition, even with a limited number of bidders, is generally beneficial for taxpayers as it aims to secure the best value through a structured bidding process. However, with only three bidders, the potential for significant cost savings through intense competition may have been constrained.

Public Impact

Federal agencies, specifically the FBI within the Department of Justice, benefit from enhanced IT systems and design services. The services delivered likely involve the design, development, or enhancement of critical computer systems supporting law enforcement and administrative functions. The geographic impact is primarily within the operational areas of the FBI, potentially nationwide, depending on the systems being designed. The contract supports a workforce of IT professionals and system designers, likely including both government personnel and contractor employees.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Cost Plus Award Fee' contract type can lead to cost overruns if not managed tightly, as contractor profit is tied to performance incentives.
A limited number of bidders (3) in a full and open competition might indicate a lack of robust market competition, potentially leading to higher prices than if more vendors had participated.
The short contract duration (156 days) for a project valued at $31.3 million could imply aggressive timelines or potential scope creep if not clearly defined.
The specific nature of 'Computer Systems Design Services' can be complex, increasing the risk of technical challenges and delays if not expertly managed.

Positive Signals

Awarded through 'Full and Open Competition,' suggesting an effort to leverage market capabilities and achieve best value.
The selection of Lockheed Martin, a large and experienced contractor, implies a focus on reliability and proven performance for critical IT systems.
The 'Award Fee' component incentivizes the contractor to meet or exceed performance expectations, potentially leading to higher quality outcomes.
The contract addresses a specific NAICS code (541512), indicating a targeted approach to acquiring specialized IT design expertise.

Sector Analysis

The IT services sector is a vast and critical component of federal spending. This contract falls under Computer Systems Design Services, a sub-sector focused on planning and designing computer systems that integrate hardware, software, and communication technologies. The federal government is a major consumer of these services, constantly seeking to modernize aging infrastructure and implement new technological solutions to improve efficiency and effectiveness. Comparable spending benchmarks would involve looking at other large-scale IT system design contracts awarded by agencies like the Department of Defense or other civilian agencies for similar scope and complexity.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Consequently, there are no direct subcontracting requirements mandated for small businesses within this specific award. The absence of a set-aside means that large businesses were the primary focus for bidding. This contract's value and nature are likely beyond the typical scope for many small businesses unless they are part of a larger subcontracting team, which is not explicitly indicated here.

Oversight & Accountability

Oversight for this contract would primarily fall under the contracting officer and the relevant program managers within the Federal Bureau of Investigation (FBI). The 'Cost Plus Award Fee' structure necessitates close monitoring of performance against defined award criteria to ensure fair and appropriate fee determination. Transparency would be facilitated through contract reporting mechanisms, though specific details on public accessibility of performance reports are not provided. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise concerning the contract's execution.

Related Government Programs

IT Modernization Programs
Federal Civilian Agency IT Contracts
Law Enforcement Technology Systems
Computer Systems Design and Integration Services

Risk Flags

Limited Competition
Cost Plus Contract Type
Short Contract Duration for Value

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $31.3 million to LOCKHEED MARTIN SERVICES, LLC. CHANGE PROPOSAL FOR INTERSTATE PHOTO

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN SERVICES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Justice (Federal Bureau of Investigation).

What is the total obligated amount?

The obligated amount is $31.3 million.

What is the period of performance?

Start: 2011-12-02. End: 2012-05-06.

What specific IT systems or projects was this $31.3 million contract intended to address for the FBI?

The provided data indicates the contract is for 'Computer Systems Design Services' (NAICS 541512) awarded to Lockheed Martin Services, LLC, with a value of $31,258,829.52. However, the specific IT systems or projects are not detailed. Typically, such contracts support the design, development, integration, or enhancement of complex IT infrastructures, software applications, or network architectures. For the FBI, this could range from case management systems, data analytics platforms, cybersecurity infrastructure, or internal operational support systems. The 'Cost Plus Award Fee' (CPAF) contract type suggests that the FBI sought to incentivize high performance in achieving specific design and implementation goals, implying a critical need for quality and effectiveness in the designed systems.

How does the 'Cost Plus Award Fee' (CPAF) structure influence contractor performance and cost control for this contract?

The CPAF structure is designed to incentivize contractor performance by linking a portion of their profit (the 'award fee') to the achievement of specific, pre-defined performance objectives. For this $31.3 million contract, the FBI would have established criteria related to the quality, timeliness, and effectiveness of Lockheed Martin's computer systems design services. The contractor earns a base fee plus an award fee, which can range from zero to a maximum amount, based on how well they meet these criteria. This structure encourages the contractor to go beyond minimum requirements to maximize their profit. From a cost control perspective, the government aims to achieve better value by motivating superior performance. However, CPAF contracts can be complex to administer, requiring robust government oversight to fairly assess performance and determine the award fee, and they can potentially lead to higher overall costs than fixed-price contracts if the award fee is consistently maximized.

What is the significance of Lockheed Martin Services, LLC being awarded this contract, given their profile?

Lockheed Martin Services, LLC is a subsidiary of Lockheed Martin Corporation, a major global security and aerospace company with extensive experience in information technology, systems integration, and complex program management. Awarding a $31.3 million contract for computer systems design services to such a large and established contractor suggests that the FBI required a high level of technical expertise, project management capability, and potentially security clearances that are readily available within large, experienced firms. This choice indicates a preference for a contractor with a proven track record in delivering complex IT solutions, possibly for mission-critical applications where reliability and security are paramount. It also implies that the scope of work was substantial enough to warrant the resources and capabilities of a prime contractor of this magnitude.

Considering the contract duration of 156 days (approx. 5 months), what does this imply about the scope and complexity of the design services?

A contract duration of 156 days for a $31.3 million project focused on 'Computer Systems Design Services' suggests a highly focused or potentially a specific phase of a larger initiative. It could imply that the scope was well-defined and achievable within this timeframe, perhaps involving the design of a particular module, a pilot system, or a specific upgrade. Alternatively, it might indicate an accelerated timeline for a critical need. The relatively high daily expenditure rate ($31.3M / 156 days ≈ $200,000 per day) underscores the intensity of resources and expertise expected during this period. Without further details on the deliverables, it's difficult to definitively assess if this duration is adequate or aggressive, but it points towards a concentrated effort rather than a long-term development cycle.

How does the 'Full and Open Competition' with only 3 bidders impact the perceived value for taxpayers?

A 'Full and Open Competition' is generally the preferred method for maximizing taxpayer value, as it theoretically allows any qualified vendor to compete, fostering price reductions and innovation. However, in this instance, only three bids were received. While competition still occurred, a lower number of bidders can sometimes indicate a niche market, high barriers to entry, or that the solicitation was not widely disseminated or appealing to a broader range of potential contractors. If the market truly has only a few capable providers, then three bidders might represent the maximum achievable competition. For taxpayers, this means that while a competitive process was followed, the potential for significant price reductions driven by intense bidding among numerous firms might have been limited compared to a scenario with, for example, five or more bidders.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 9211 CORPORATE BLVD, ROCKVILLE, MD, 08

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $31,258,830

Exercised Options: $31,258,830

Current Obligation: $31,258,830

Timeline