DoD awards $68.6M to Lockheed Martin for Falcon Core engineering, raising concerns about competition

Contract Overview

Contract Amount: $68,600,307 ($68.6M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2018-03-01

End Date: 2020-02-29

Contract Duration: 730 days

Daily Burn Rate: $94.0K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ENGINEERING SERVICES IN SUPPORT OF THE FALCON CORE PROGRAM

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76108

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $68.6 million to LOCKHEED MARTIN CORPORATION for work described as: ENGINEERING SERVICES IN SUPPORT OF THE FALCON CORE PROGRAM Key points: 1. Significant contract value awarded to a single large corporation. 2. Lack of competition may lead to inflated costs. 3. Potential for taxpayer funds to be used inefficiently. 4. Engineering services are critical for defense programs.

Value Assessment

Rating: questionable

The contract value of $68.6M for engineering services is substantial. Without competitive bidding, it's difficult to assess if this price is reasonable compared to market rates for similar specialized engineering support.

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 allows the contractor to set terms without market pressure, impacting overall value for money.

Taxpayer Impact: The lack of competition means taxpayers may not be receiving the best possible price for these essential engineering services.

Public Impact

Taxpayers may be overpaying due to the absence of competitive bidding. The Falcon Core Program's success could be impacted by non-optimal resource allocation. Lack of transparency in the procurement process erodes public trust.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for cost overruns

Positive Signals

Critical engineering support for a defense program

Sector Analysis

This contract falls under engineering services, a sector vital for complex government programs like defense. Benchmarks for such specialized services can vary widely, but competitive processes are key to ensuring fair pricing.

Small Business Impact

The contract was awarded to Lockheed Martin Corporation, a large business. There is no indication that small businesses were involved or considered in this procurement, missing an opportunity for their participation.

Oversight & Accountability

The sole-source nature of this award warrants closer oversight to ensure the contractor is delivering services efficiently and that costs are justified, despite the lack of a competitive baseline.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Lack of competitive bidding
Potential for price gouging
Limited transparency
No small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $68.6 million to LOCKHEED MARTIN CORPORATION. ENGINEERING SERVICES IN SUPPORT OF THE FALCON CORE PROGRAM

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 $68.6 million.

What is the period of performance?

Start: 2018-03-01. End: 2020-02-29.

What is the justification for awarding this contract on a sole-source basis?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Without further details, it's presumed the Department of the Air Force determined Lockheed Martin was the only viable option for the Falcon Core Program's specific engineering needs at the time of award.

How can the Department of Defense ensure fair pricing without competition?

Ensuring fair pricing without competition often involves rigorous cost analysis, benchmarking against similar historical contracts (if available), and detailed negotiation of profit margins. The agency may also require detailed cost breakdowns from the contractor and engage independent cost estimators to validate the proposed pricing.

What is the potential impact on the Falcon Core Program's effectiveness due to this procurement method?

While a sole-source award can ensure specialized expertise is secured, it carries the risk of reduced innovation and potentially higher costs if not managed strictly. The program's effectiveness could be impacted if the lack of competitive pressure leads to complacency or if funds are diverted from other critical areas due to inflated service costs.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 1 LOCKHEED BLVD, FORT WORTH, TX, 76108

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $68,600,307

Exercised Options: $68,600,307

Current Obligation: $68,600,307

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: F4262001D0058

IDV Type: IDC

Timeline