DoD's $38.3M Lockheed Martin Contract for Stores Management System Redesign Lacks Competition
Contract Overview
Contract Amount: $38,280,250 ($38.3M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2022-09-30
End Date: 2027-08-27
Contract Duration: 1,792 days
Daily Burn Rate: $21.4K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: STORES MANAGEMENT SYSTEM (SMS) REDESIGN
Place of Performance
Location: FORT WORTH, TARRANT County, TEXAS, 76108
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $38.3 million to LOCKHEED MARTIN CORPORATION for work described as: STORES MANAGEMENT SYSTEM (SMS) REDESIGN Key points: 1. Significant contract awarded to a single vendor, raising questions about cost-effectiveness. 2. The Department of the Air Force is the primary agency involved. 3. Aircraft manufacturing sector context suggests potential for specialized needs, but competition is still key. 4. Lack of competition is a major risk factor for taxpayer value.
Value Assessment
Rating: questionable
The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed tightly. Without competitive bidding, it's difficult to benchmark pricing against similar systems.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for the government compared to a competitive process.
Taxpayer Impact: The lack of competition means taxpayers may be paying a premium for the Stores Management System redesign.
Public Impact
Military logistics and inventory management systems are critical for operational readiness. Redesigning such a system could impact aircraft maintenance and supply chain efficiency. The long duration of the contract (nearly 5 years) suggests a substantial undertaking.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of transparency in pricing
Positive Signals
- Potential for improved logistics efficiency
- Long-term system development
Sector Analysis
The Department of Defense's IT spending is substantial, with a significant portion allocated to modernization and system upgrades. Benchmarks for similar system redesigns in the defense sector are difficult to ascertain without competitive data.
Small Business Impact
There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. This represents a missed opportunity for small business participation.
Oversight & Accountability
Oversight will be crucial to ensure Lockheed Martin delivers the SMS redesign within budget and meets performance requirements, especially given the sole-source nature of the award.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award limits competition and potentially increases costs.
- Cost-plus contract type carries inherent risk of cost overruns.
- Lack of transparency in pricing due to non-competitive nature.
- Potential for vendor lock-in.
- Dependency on a single contractor for a critical system.
Tags
aircraft-manufacturing, department-of-defense, tx, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $38.3 million to LOCKHEED MARTIN CORPORATION. STORES MANAGEMENT SYSTEM (SMS) REDESIGN
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $38.3 million.
What is the period of performance?
Start: 2022-09-30. End: 2027-08-27.
What is the justification for awarding this contract on a sole-source basis?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of viable alternatives. Without further details, it's difficult to assess if these criteria were met. A thorough review of the justification document is necessary to understand the rationale and ensure it aligns with federal procurement regulations.
How will the government ensure cost control and value for money with a Cost Plus Fixed Fee contract awarded non-competitively?
Effective cost control will rely heavily on robust government oversight, detailed performance metrics, and stringent auditing of expenditures. The fixed fee component provides some incentive for the contractor to manage costs, but the government must actively monitor all direct costs to prevent overruns and ensure the final price reflects fair market value.
What are the potential risks to operational effectiveness if the SMS redesign is delayed or fails to meet requirements?
Delays or failures in the SMS redesign could significantly disrupt aircraft maintenance schedules, inventory management, and overall supply chain operations, potentially impacting military readiness. This could lead to increased operational costs, reduced efficiency, and a diminished ability to support critical missions.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 1 LOCKHEED BLVD BLDG 10, FORT WORTH, TX, 76108
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: $38,280,250
Exercised Options: $38,280,250
Current Obligation: $38,280,250
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA820518D0001
IDV Type: IDC
Timeline
Start Date: 2022-09-30
Current End Date: 2027-08-27
Potential End Date: 2027-12-31 00:00:00
Last Modified: 2023-11-16
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