FAA Awards $488M for NextGen Trajectory Management to Lockheed Martin

Contract Overview

Contract Amount: $488,446,880 ($488.4M)

Contractor: Lockheed Martin Services, LLC

Awarding Agency: Department of Transportation

Start Date: 2010-05-03

End Date: 2025-11-01

Contract Duration: 5,661 days

Daily Burn Rate: $86.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Transportation

Official Description: WA-10-03770-- INCREMENTAL FUNDING - NEXTGEN HD TRAJECTORY MGMT-ARRIVAL TACTICAL FLOW_TBFM_ PROGRAM 'NEW CONTRACT'. TO PROVIDE PROGRAM MANAGEMENT, SYSTEMS ENGINEERING, SYSTEM DESIGN, SYSTEM TEST AND EVALUATION, TRAINING, IMPLEMENTATION, INTEGRATED LOGISTICS SUPPORT & ENGINEERING SUPPORT. TENTATIVE CONTRACT DTFAWA-10-C-00052. PERIOD OF PERFORMANCE --TBD (BASE PERIOD (5 YEARS) WITH 5 OPTION YEARS A TOTAL OF 10 YEARS) 10-AJR4500-6000 TAS::69 8107::TAS

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Transportation obligated $488.4 million to LOCKHEED MARTIN SERVICES, LLC for work described as: WA-10-03770-- INCREMENTAL FUNDING - NEXTGEN HD TRAJECTORY MGMT-ARRIVAL TACTICAL FLOW_TBFM_ PROGRAM 'NEW CONTRACT'. TO PROVIDE PROGRAM MANAGEMENT, SYSTEMS ENGINEERING, SYSTEM DESIGN, SYSTEM TEST AND EVALUATION, TRAINING, IMPLEMENTATION, INTEGRATED LOGISTICS SUPPORT & ENGINEERING… Key points: 1. Significant investment in critical aviation infrastructure modernization. 2. Lockheed Martin is a major defense contractor, indicating established capabilities. 3. Long contract duration (10 years) presents long-term cost and performance risks. 4. Engineering services sector is competitive, but specific expertise may limit options.

Value Assessment

Rating: questionable

The total contract value of $488M over 10 years is substantial. Without specific per-unit cost data or benchmarks for similar program management and engineering support contracts, it's difficult to definitively assess its value. The Cost Plus Fixed Fee (CPFF) structure can lead to cost overruns if not managed tightly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is positive for price discovery. However, the specific nature of NextGen program management and engineering support may favor contractors with deep, specialized experience, potentially limiting the pool of truly competitive bidders.

Taxpayer Impact: Taxpayer funds are being used for a critical national infrastructure upgrade. While competition is intended to ensure fair pricing, the long-term nature and complexity of the project warrant close monitoring to prevent excessive costs.

Public Impact

Enhances air traffic safety and efficiency through advanced trajectory management. Supports the broader NextGen aviation system modernization initiative. Potential for job creation within Lockheed Martin and its subcontractors. Impacts airlines and passengers through improved flight predictability and reduced delays.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long-term contract (10 years) increases risk of cost escalation.
CPFF contract type can incentivize cost overruns.
Lack of specific performance metrics makes value assessment difficult.
Potential for vendor lock-in due to specialized knowledge.

Positive Signals

Awarded under full and open competition.
Addresses a critical need for aviation modernization.
Experienced contractor with a track record in complex systems.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting advanced technology development for transportation infrastructure. Spending benchmarks for similar large-scale, long-duration government engineering support contracts are highly variable and depend on the specific technological scope and complexity.

Small Business Impact

The data indicates this contract was awarded to Lockheed Martin Services, LLC, a large business. There is no explicit mention of small business participation or subcontracting goals within the provided data, suggesting limited direct impact on small businesses for this prime contract.

Oversight & Accountability

The long duration and significant value of this contract necessitate robust oversight from the FAA to ensure performance, manage costs, and hold Lockheed Martin accountable. Regular reviews and audits will be crucial to mitigate risks associated with the CPFF structure and potential scope creep.

Related Government Programs

Engineering Services
Department of Transportation Contracting
Federal Aviation Administration Programs

Risk Flags

Long contract duration increases risk of cost escalation and obsolescence.
CPFF contract type can incentivize higher costs if not tightly managed.
Lack of specific performance metrics in provided data.
Potential for vendor lock-in due to specialized knowledge required.
Dependence on a single large contractor for critical infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $488.4 million to LOCKHEED MARTIN SERVICES, LLC. WA-10-03770-- INCREMENTAL FUNDING - NEXTGEN HD TRAJECTORY MGMT-ARRIVAL TACTICAL FLOW_TBFM_ PROGRAM 'NEW CONTRACT'. TO PROVIDE PROGRAM MANAGEMENT, SYSTEMS ENGINEERING, SYSTEM DESIGN, SYSTEM TEST AND EVALUATION, TRAINING, IMPLEMENTATION, INTEGRATED LOGISTICS SUPPORT & ENGINEERING SUPPORT. TENTATIVE CONTRACT DTFAWA-10-C-00052. PERIOD OF PERFORMANCE --TBD (BASE PERIOD (5 YEARS) WITH 5 OPTION YEARS A TOTAL OF 10 YEARS) 10-AJR4500-6000 TAS::69 8107::TAS

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN SERVICES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $488.4 million.

What is the period of performance?

Start: 2010-05-03. End: 2025-11-01.

How does the cost of this contract compare to similar large-scale aviation system engineering and program management contracts awarded in the last five years?

Benchmarking this $488 million, 10-year contract requires detailed comparison with similar government contracts for complex aviation system development and program management. Factors like scope, technological innovation, and contractor overhead must be considered. Without access to a comprehensive database of comparable contracts, a precise benchmark is challenging. However, given the long duration and CPFF structure, close scrutiny of cost performance against initial estimates and industry norms is warranted to ensure value.

What are the specific performance metrics and key performance indicators (KPIs) used to evaluate Lockheed Martin's success under this contract?

The provided data does not specify the performance metrics or KPIs for this contract. For a contract of this magnitude and duration, it is crucial that the FAA has established clear, measurable objectives related to system performance, reliability, cost control, and schedule adherence. The absence of this information raises concerns about the ability to objectively assess contractor performance and ensure accountability throughout the 10-year period.

What is the FAA's strategy for managing potential cost overruns inherent in a Cost Plus Fixed Fee (CPFF) contract over a 10-year period?

Managing cost overruns in a CPFF contract, especially over a decade, requires proactive and rigorous oversight. The FAA's strategy should involve detailed baseline cost estimates, regular financial reviews, strict change control processes, and performance incentives tied to cost efficiency. Continuous monitoring of labor rates, material costs, and indirect expenses is essential. Furthermore, clear communication channels and defined escalation procedures for cost issues are vital to address deviations promptly.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: RESEARCH AND DEVELOPMENT › Transportation R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 9211 CORPORATE BLVD, ROCKVILLE, MD, 20850

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: $2,325,087,614

Exercised Options: $488,446,880

Current Obligation: $488,446,880

Actual Outlays: $145,713,585

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Timeline