DoD's $68.6M Falcon Enterprise Core Engineering Services contract awarded to Lockheed Martin raises cost concerns
Contract Overview
Contract Amount: $68,600,000 ($68.6M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2022-03-30
End Date: 2024-02-29
Contract Duration: 701 days
Daily Burn Rate: $97.9K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: FY22/FY23 FALCON ENTERPRISE CORE ENGINEERING SERVICES
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: FY22/FY23 FALCON ENTERPRISE CORE ENGINEERING SERVICES Key points: 1. Significant spending on core engineering services for the Falcon Enterprise. 2. Sole-source award to Lockheed Martin limits competitive pricing. 3. Potential for overspending due to lack of competition. 4. Focus on electronic and precision equipment maintenance.
Value Assessment
Rating: questionable
The contract value of $68.6 million for core engineering services appears high given the 'Other Electronic and Precision Equipment Repair and Maintenance' NAICS code. Without competitive benchmarks, it's difficult to assess if this pricing is reasonable compared to similar services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Lockheed Martin. This lack of competition likely prevented price discovery and may have led to a higher overall cost for the government.
Taxpayer Impact: The absence of competition on this $68.6 million contract means taxpayers may have paid a premium for these engineering services.
Public Impact
Taxpayers may be overpaying for essential engineering services due to a lack of competitive bidding. The long duration (701 days) of the contract raises questions about the ongoing need and potential for future cost increases. Lack of transparency in the sole-source award process hinders public scrutiny of defense spending.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- High contract value
- Lack of competition
- Potential for overpricing
Positive Signals
- Essential engineering services for defense systems
Sector Analysis
The Department of Defense consistently represents a significant portion of federal spending, particularly in areas like IT and specialized engineering services. Benchmarks for similar core engineering contracts are often difficult to ascertain due to the specialized nature and proprietary information involved.
Small Business Impact
This contract was awarded to Lockheed Martin Corporation, a large prime contractor. There is no indication that small businesses were involved as subcontractors or partners in this specific award, which is common for large sole-source defense contracts.
Oversight & Accountability
The sole-source nature of this award warrants closer oversight to ensure the price paid is fair and reasonable. The Department of the Air Force should provide justification for the lack of competition and demonstrate efforts to obtain best value.
Related Government Programs
- Other Electronic and Precision Equipment Repair and Maintenance
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award limits competition and price discovery.
- High contract value without clear competitive justification.
- Potential for cost overruns due to lack of market pressure.
- Limited transparency in the procurement process.
Tags
other-electronic-and-precision-equipment, department-of-defense, tx, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $68.6 million to LOCKHEED MARTIN CORPORATION. FY22/FY23 FALCON ENTERPRISE CORE ENGINEERING SERVICES
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: 2022-03-30. End: 2024-02-29.
What specific engineering services are included under 'FALCON ENTERPRISE CORE ENGINEERING SERVICES' and how do they justify the $68.6 million price tag without competition?
The provided data categorizes the contract under NAICS 811219 (Other Electronic and Precision Equipment Repair and Maintenance), suggesting services related to the upkeep and enhancement of electronic systems. However, the specific scope of 'core engineering' for the 'Falcon Enterprise' is not detailed. Without this, it's impossible to definitively justify the $68.6 million cost, especially given the sole-source award, which bypasses competitive validation of pricing.
What are the primary risks associated with awarding a $68.6 million contract on a sole-source basis for engineering services?
The primary risks include inflated costs due to the absence of competitive pressure, potential for reduced innovation as the contractor faces no market alternatives, and a lack of transparency in the procurement process. This can lead to taxpayers overpaying for services and the government not receiving the best possible value or technological advancements.
How effective is the Department of Defense in ensuring fair pricing and value for money when awarding sole-source contracts for specialized engineering services?
Effectiveness varies. While agencies have mechanisms for sole-source justifications, the inherent lack of competition makes it challenging to guarantee fair pricing and optimal value. Robust internal review, independent cost analysis, and strong negotiation tactics are crucial. However, the potential for cost overruns and missed opportunities for innovation remains a persistent concern with sole-source awards.
Industry Classification
NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Other Electronic and Precision Equipment Repair and Maintenance
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
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: $80,385,401
Exercised Options: $80,385,401
Current Obligation: $68,600,000
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA823222D0004
IDV Type: IDC
Timeline
Start Date: 2022-03-30
Current End Date: 2024-02-29
Potential End Date: 2024-05-29 00:00:00
Last Modified: 2025-08-27
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