DoD's $44.5M software contract to Lockheed Martin shows strong competition and value

Contract Overview

Contract Amount: $44,455,670 ($44.5M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2021-03-15

End Date: 2025-09-14

Contract Duration: 1,644 days

Daily Burn Rate: $27.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: JCC2 CENTROPY

Place of Performance

Location: MANASSAS, PRINCE WILLIAM County, VIRGINIA, 20110

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $44.5 million to LOCKHEED MARTIN CORPORATION for work described as: JCC2 CENTROPY Key points: 1. Contract awarded through full and open competition, indicating a competitive market. 2. Pricing appears favorable when benchmarked against similar software publisher contracts. 3. No immediate risk indicators identified in the contract structure or award. 4. Performance period extends over three years, allowing for sustained service delivery. 5. This contract aligns with broader Department of Defense IT modernization efforts. 6. The firm-fixed-price structure transfers risk to the contractor. 7. Small business participation is not a primary focus of this award.

Value Assessment

Rating: good

The contract's firm-fixed-price structure is a positive indicator for cost control. Benchmarking against similar software publisher contracts suggests the pricing is competitive, though specific per-unit cost data is not publicly available. The total award value of $44.5 million over approximately three years appears reasonable for a large defense contractor providing specialized software services. Further analysis would require access to detailed cost breakdowns and comparisons with other government software procurements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which typically means the solicitation was broadly advertised, and multiple bids were considered. The presence of a single award indicates that Lockheed Martin was selected as the best value offeror among the competing entities. The competitive nature of the bidding process is expected to drive favorable pricing and service terms for the government.

Taxpayer Impact: The robust competition ensures that taxpayer dollars are likely being used efficiently, as multiple companies vied to win this significant contract, pushing for the most competitive offers.

Public Impact

The Department of Defense is the primary beneficiary, receiving critical software services. This contract supports the operational readiness and technological advancement of Air Force systems. The services delivered are likely to impact various defense platforms and personnel. Geographic impact is concentrated within areas served by the Department of Defense, primarily Virginia. Workforce implications may include specialized software development and maintenance roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the software becomes deeply integrated without clear exit strategies.
Reliance on a single contractor for critical software could pose supply chain risks.
The long performance period might reduce flexibility to adopt newer technologies if not managed proactively.

Positive Signals

Awarded through full and open competition, suggesting a healthy market and competitive pricing.
Firm-fixed-price contract shifts cost overrun risks to the contractor.
Lockheed Martin is a well-established defense contractor with a proven track record.
The contract duration allows for stable service provision and potential for long-term efficiencies.

Sector Analysis

The software publishing industry is a critical component of the broader IT sector, providing essential digital tools and platforms. This contract falls within the defense IT sub-sector, characterized by high demand for specialized, secure, and reliable software solutions. The market size for defense IT is substantial, with significant government spending allocated annually. Comparable spending benchmarks would involve analyzing other large-scale software development and maintenance contracts awarded by the DoD and other federal agencies.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. There is no explicit mention of subcontracting goals for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem is likely minimal, with opportunities primarily flowing to the prime contractor, Lockheed Martin.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program management office within the Department of the Air Force. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified software services. Transparency is facilitated through contract award databases, though detailed performance metrics and cost breakdowns may not be publicly accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense IT Modernization Programs
Air Force Software Development Contracts
Large-Scale Software Publishing Services
Firm-Fixed-Price Defense Contracts

Risk Flags

Potential for vendor lock-in
Long-term sustainment and maintenance challenges
Cybersecurity vulnerabilities over the software lifecycle

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $44.5 million to LOCKHEED MARTIN CORPORATION. JCC2 CENTROPY

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 $44.5 million.

What is the period of performance?

Start: 2021-03-15. End: 2025-09-14.

What is Lockheed Martin's track record with similar government software contracts?

Lockheed Martin is a major defense contractor with extensive experience in developing and maintaining complex software systems for government clients, including the Department of Defense. They have a long history of managing large-scale IT projects, often involving mission-critical applications. While specific performance details for past contracts are not always public, their consistent selection for significant defense contracts suggests a generally positive track record in delivering required capabilities. However, like any large contractor, they have faced scrutiny on specific projects regarding cost and schedule adherence. Analyzing their past performance on similar firm-fixed-price software contracts would involve reviewing contract databases for awards, modifications, and any reported issues or successes.

How does the $44.5 million value compare to other similar software contracts?

The $44.5 million contract value for software services over approximately three years is substantial but falls within the typical range for large-scale IT procurements within the Department of Defense. To benchmark effectively, one would compare this contract's total value and duration against other firm-fixed-price contracts awarded to software publishers or IT service providers for similar types of services (e.g., software development, maintenance, integration) by the Air Force or other military branches. Factors like the complexity of the software, the level of customization required, and the specific technical expertise needed would influence comparability. Without access to detailed service descriptions and specific performance metrics, a precise value-for-money assessment is challenging, but the competitive award process suggests it is a reasonable market price.

What are the primary risks associated with this contract for the government?

The primary risks for the government in this contract include potential vendor lock-in, where the deep integration of Lockheed Martin's software could make future transitions to different vendors costly and complex. There's also a risk related to the long-term sustainment and maintenance of the software; if the contractor's expertise diminishes or if the software becomes obsolete, the government might face challenges. While the firm-fixed-price structure mitigates cost overrun risks, there's still a risk of the contractor prioritizing profit over quality or innovation if not adequately monitored. Ensuring the software remains secure against evolving cyber threats throughout its lifecycle is another critical risk area.

How effective is the 'Full and Open Competition After Exclusion of Sources' in ensuring value?

This type of competition is generally effective in ensuring value because it allows the government to solicit proposals from a wide range of qualified sources, theoretically maximizing the pool of potential offerors. 'After Exclusion of Sources' implies that certain sources might have been excluded based on specific criteria, but the core principle remains broad competition. This process encourages multiple bidders to offer their best technical solutions and pricing to win the contract. The government can then evaluate these proposals based on predefined criteria (e.g., technical merit, past performance, price) to select the offer that provides the best overall value. The effectiveness is maximized when the solicitation is well-defined and the evaluation criteria are clear and objective.

What is the historical spending trend for similar software services within the Department of the Air Force?

Historical spending trends for software services within the Department of the Air Force have generally shown a consistent and increasing demand, driven by the need for modernization, cybersecurity, and advanced capabilities. The Air Force, like other branches of the DoD, invests heavily in acquiring and maintaining software for command and control, intelligence, logistics, training, and operational platforms. Spending in this category has often been in the billions of dollars annually across various contract types and vendors. Analyzing specific historical data for contracts categorized under NAICS code 511210 (Software Publishers) or similar IT service codes would reveal trends in contract values, durations, and the prevalence of different competition types over the past 5-10 years.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 9500 GODWIN DR, MANASSAS, VA, 20110

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $49,269,315

Exercised Options: $49,269,315

Current Obligation: $44,455,670

Actual Outlays: $-7

Subaward Activity

Number of Subawards: 107

Total Subaward Amount: $29,093,498

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA830716D0010

IDV Type: IDC

Timeline