DoD's $18.6M IT contract to Lockheed Martin for custom programming services shows fair value, but limited competition
Contract Overview
Contract Amount: $18,592,676 ($18.6M)
Contractor: Lockheed Martin Integrated Systems, LLC
Awarding Agency: Department of Defense
Start Date: 2005-07-28
End Date: 2009-09-30
Contract Duration: 1,525 days
Daily Burn Rate: $12.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: TIME AND MATERIALS
Sector: IT
Official Description: 200512!503869!2100!W91RUS!ACA, FORT HUACHUCA !W91QUZ04D0004 !A!N! !N!E101 !03 !20050728!20050930!836196972!805258373!834951691!N!LOCKHEED MARTIN INTEGRATED SYS!6801 ROCKLEDGE DRIVE !BETHESDA !MD!20817!24670!003!04!FORT HUACHUCA !COCHISE !ARIZONA !+000004218062!N!N!000000000000!D399!OTHER ADP&TELECOMMUNICATION SERVICES !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !541519!E! !5!B!S!H! ! !20200930!B!E!N!A! !A!U!Y!1!001!B! !Z!N!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!B!N! ! ! ! ! ! !0001! !
Place of Performance
Location: BETHESDA, MONTGOMERY County, MARYLAND, 20817
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $18.6 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC for work described as: 200512!503869!2100!W91RUS!ACA, FORT HUACHUCA !W91QUZ04D0004 !A!N! !N!E101 !03 !20050728!20050930!836196972!805258373!834951691!N!LOCKHEED MARTIN INTEGRATED SYS!6801 ROCKLEDGE DRIVE !BETHESDA !MD!20817!24670!003!04!FORT HUACHUCA !COCH… Key points: 1. The contract's value appears reasonable when benchmarked against similar IT services procurements. 2. Competition was limited, potentially impacting price discovery and taxpayer value. 3. The contractor, Lockheed Martin, has a substantial track record with government contracts. 4. Performance period spans over 4 years, indicating a significant, long-term IT support requirement. 5. This contract falls within the broader IT services sector, a critical area for defense operations. 6. The contract type (Time and Materials) can sometimes lead to cost overruns if not closely managed.
Value Assessment
Rating: good
The contract value of approximately $18.6 million for custom computer programming services appears to be within a reasonable range when compared to similar IT service contracts awarded by the Department of Defense. While specific per-unit cost data is not available, the overall price seems competitive given the duration and scope of services. The Time and Materials (T&M) contract type, however, warrants careful monitoring to ensure costs remain controlled and aligned with the expected value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. However, the data suggests only one bid was received, which is a low number for a full and open competition. This limited number of bidders may suggest potential barriers to entry for other firms or a lack of active interest from the market, which could affect the government's ability to secure the most competitive pricing.
Taxpayer Impact: While full and open competition is ideal, a single bid means taxpayers may not have benefited from the full spectrum of potential price reductions that a more robust bidding process could have yielded.
Public Impact
The primary beneficiary is the Department of the Army, receiving custom computer programming services. These services are crucial for supporting IT infrastructure and operations at Fort Huachuca. The contract supports IT modernization and operational efficiency within the Army. Workforce implications include potential support roles for IT professionals and contractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition (one bid) raises concerns about optimal price discovery.
- Time and Materials contract type can pose cost control risks if not managed diligently.
- The long performance period requires sustained oversight to ensure continued value.
Positive Signals
- Awarded under full and open competition, adhering to procurement best practices.
- Contractor (Lockheed Martin) is a well-established entity with extensive government contracting experience.
- The contract addresses a clear need for specialized IT services within the Department of Defense.
Sector Analysis
This contract falls within the Information Technology (IT) sector, specifically custom computer programming services. The IT services market for the federal government is substantial, with significant spending allocated to software development, system integration, and IT support. This contract represents a portion of the DoD's investment in maintaining and enhancing its technological capabilities, aligning with broader trends of digital transformation within government agencies.
Small Business Impact
The data indicates this contract was not set aside for small businesses and that the primary awardee is a large corporation. There is no explicit information regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem appears minimal, though large prime contractors are often encouraged or required to utilize small business subcontractors on such awards.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. The Time and Materials nature of the contract necessitates rigorous oversight of labor hours and material costs to prevent overspending. Transparency is generally maintained through contract reporting systems, and the Inspector General's office would have jurisdiction to investigate any potential fraud, waste, or abuse.
Related Government Programs
- Department of Defense IT Services
- Custom Software Development Contracts
- Army IT Modernization Programs
- Lockheed Martin Government Contracts
Risk Flags
- Limited competition despite full and open solicitation.
- Potential for cost overruns due to Time and Materials contract type.
- Need for robust oversight to manage contractor performance and costs over a long duration.
Tags
it-services, custom-computer-programming, department-of-defense, department-of-the-army, lockheed-martin, time-and-materials, full-and-open-competition, maryland, fort-huachuca, large-contract, it-modernization
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $18.6 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC. 200512!503869!2100!W91RUS!ACA, FORT HUACHUCA !W91QUZ04D0004 !A!N! !N!E101 !03 !20050728!20050930!836196972!805258373!834951691!N!LOCKHEED MARTIN INTEGRATED SYS!6801 ROCKLEDGE DRIVE !BETHESDA !MD!20817!24670!003!04!FORT HUACHUCA !COCHISE !ARIZONA !+000004218062!N!N!000000000000!D399!OTHER ADP&TELECOMMUNICATION SERVICES !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !541519!E! !5!B!S!H! ! !20200
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 $18.6 million.
What is the period of performance?
Start: 2005-07-28. End: 2009-09-30.
What is the track record of Lockheed Martin Integrated Systems, LLC with federal contracts, particularly in IT services?
Lockheed Martin Integrated Systems, LLC, the contractor for this $18.6 million IT services contract, is a major defense contractor with a vast history of performing work for the U.S. federal government. Their portfolio includes a wide range of services, from IT and cybersecurity to aerospace and defense systems. Historically, Lockheed Martin has been a significant recipient of federal funds, consistently ranking among the top government contractors. Their experience in complex IT projects, including custom programming, is extensive, suggesting a strong capability to fulfill the requirements of this contract. However, like any large contractor, they have also faced scrutiny regarding contract performance and pricing on various projects over the years.
How does the awarded price of $18.6 million compare to similar custom computer programming services contracts?
Benchmarking the $18.6 million award requires comparing it against contracts with similar scope, duration, and complexity within the custom computer programming services domain. Given the contract's duration of over four years (from July 2005 to September 2009), the average annual value is approximately $4.65 million. This figure appears reasonable for specialized IT services supporting a major military installation like Fort Huachuca. Without access to a detailed breakdown of labor categories, hours, and specific deliverables, a precise comparison is difficult. However, considering the contractor's size and the nature of defense IT needs, the overall value seems aligned with market rates for large-scale, long-term IT support contracts.
What are the primary risks associated with a Time and Materials (T&M) contract of this magnitude?
The primary risk associated with a Time and Materials (T&M) contract, such as this $18.6 million award, 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. This structure can incentivize longer task durations or less efficient work if not meticulously monitored. For the government, the risk lies in the contractor potentially accumulating costs without a clear ceiling, especially if the scope is not well-defined or if oversight is insufficient. Effective management requires stringent tracking of hours, validation of effort, and clear communication to ensure the contractor remains focused on efficient delivery within the overall budget.
What does the limited competition (one bid) for this contract imply for the Department of the Army and taxpayers?
The fact that this $18.6 million contract received only one bid, despite being awarded under 'full and open competition,' raises concerns. It suggests that either the market for these specific custom programming services was limited, or potential competitors chose not to bid due to various factors like perceived difficulty, unclear requirements, or the dominance of the incumbent/awarded contractor. For the Department of the Army, this limited competition might mean they did not receive the benefit of a wider range of technical solutions or the most competitive pricing achievable through robust bidding. For taxpayers, it implies a potential missed opportunity for cost savings, as a single bidder has less incentive to offer aggressive pricing compared to a situation with multiple competing offers.
How does this contract fit into the broader spending patterns for IT services within the Department of Defense?
This $18.6 million contract for custom computer programming services represents a component of the Department of Defense's (DoD) substantial and ongoing investment in Information Technology. The DoD is one of the largest federal purchasers of IT goods and services, requiring robust systems for command, control, communications, intelligence, and logistics. Contracts like this one, focused on specialized programming, are essential for maintaining, upgrading, and developing the software that underpins military operations. While $18.6 million is significant for a single contract, it is a relatively small fraction of the DoD's overall annual IT budget, which often runs into the tens of billions of dollars. This contract aligns with the general trend of the DoD outsourcing complex IT functions to specialized contractors.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming 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: 6801 ROCKLEDGE DR, BETHESDA, MD, 08
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W91QUZ04D0004
IDV Type: IDC
Timeline
Start Date: 2005-07-28
Current End Date: 2009-09-30
Potential End Date: 2009-09-30 00:00:00
Last Modified: 2013-06-04
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