DoD Awards $34.8M Engineering Services Contract to Lockheed Martin, Not Competed
Contract Overview
Contract Amount: $34,861,827 ($34.9M)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2025-09-15
End Date: 2026-09-14
Contract Duration: 364 days
Daily Burn Rate: $95.8K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: TECHNICAL ENGINEERING SERVICES (TES)
Place of Performance
Location: MARIETTA, COBB County, GEORGIA, 30063
State: Georgia Government Spending
Plain-Language Summary
Department of Defense obligated $34.9 million to LOCKHEED MARTIN CORP for work described as: TECHNICAL ENGINEERING SERVICES (TES) Key points: 1. Significant award to a major defense contractor. 2. Lack of competition raises concerns about price discovery. 3. Contract type (Cost Plus Fixed Fee) can incentivize cost overruns. 4. Focus on engineering services within the Air Force. 5. Potential for higher costs due to sole-source award.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee contract type, combined with a lack of competition, suggests potential for higher-than-necessary costs. Benchmarking against similar sole-source engineering services contracts would be necessary for a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed. This significantly limits price discovery and may lead to a higher price than if multiple vendors had submitted bids.
Taxpayer Impact: The lack of competition for this $34.8 million contract means taxpayers may not be receiving the best possible value, as competitive pressures that drive down costs were absent.
Public Impact
Taxpayers may be overpaying for essential engineering services due to the absence of competition. The Department of Defense relies on Lockheed Martin for critical engineering support, highlighting potential vendor lock-in. Future solicitations for similar services should prioritize competitive bidding to ensure cost-effectiveness.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Lack of transparency in pricing
Positive Signals
- Award to a known, capable contractor
- Clear period of performance
Sector Analysis
This contract falls under Engineering Services (NAICS 541330), a sector critical for defense and aerospace. Spending in this area is substantial, and competitive bidding is crucial for managing costs effectively.
Small Business Impact
This award went to Lockheed Martin Corporation, a large prime contractor. There is no indication that small businesses were involved in this specific sole-source award, limiting their opportunities.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny to ensure the price is fair and reasonable. Robust oversight is needed to monitor costs and performance throughout the contract duration.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competition
- Cost Plus Fixed Fee contract type
- Potential for cost overruns
- Limited small business participation
- Absence of price benchmarks
Tags
engineering-services, department-of-defense, ga, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $34.9 million to LOCKHEED MARTIN CORP. TECHNICAL ENGINEERING SERVICES (TES)
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORP.
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 $34.9 million.
What is the period of performance?
Start: 2025-09-15. End: 2026-09-14.
What is the justification for the sole-source award, and how was the fixed fee determined to ensure fairness?
The justification for a sole-source award typically involves unique capabilities or urgent needs. The fixed fee in a Cost Plus Fixed Fee contract is negotiated based on estimated costs and a reasonable profit margin. Without the specific justification documentation, it's difficult to assess the fairness of the fee, but the lack of competition inherently reduces the pressure to minimize costs.
What are the potential risks associated with a Cost Plus Fixed Fee contract for engineering services?
Cost Plus Fixed Fee contracts carry risks of cost escalation, as the contractor is reimbursed for allowable costs plus a fixed fee. This structure can disincentivize cost control if not properly monitored. For engineering services, scope creep or unforeseen technical challenges can significantly increase costs, with the government bearing the brunt of these increases while the contractor's profit remains fixed.
How does this sole-source award impact the Air Force's ability to leverage innovation from a broader market?
Sole-source awards limit the Air Force's exposure to innovations from the wider market. By not competing the contract, the agency misses out on potentially novel approaches, technologies, or efficiencies that other firms might offer. This can lead to reliance on a single vendor's existing solutions, potentially hindering technological advancement and access to best-of-breed services.
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
Solicitation ID: FA852524R0001
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 86 S COBB DR SE, MARIETTA, GA, 30063
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: $34,861,827
Exercised Options: $34,861,827
Current Obligation: $34,861,827
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA852525DB002
IDV Type: IDC
Timeline
Start Date: 2025-09-15
Current End Date: 2026-09-14
Potential End Date: 2026-09-14 00:00:00
Last Modified: 2026-01-14
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