DoD's $26.7M Lockheed Martin Contract for Sales Financing Raises Questions on Competition and Value
Contract Overview
Contract Amount: $26,749,133 ($26.7M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2015-01-01
End Date: 2017-12-31
Contract Duration: 1,095 days
Daily Burn Rate: $24.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: DUMMY BASE DOCUMENT FOR TRANSACTION 6
Place of Performance
Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80921
State: Colorado Government Spending
Plain-Language Summary
Department of Defense obligated $26.7 million to LOCKHEED MARTIN CORPORATION for work described as: DUMMY BASE DOCUMENT FOR TRANSACTION 6 Key points: 1. Contract awarded to Lockheed Martin Corporation for sales financing. 2. Significant value of $26.7 million over three years. 3. Lack of competition raises concerns about potential overpricing. 4. Sector context for sales financing in defense is unclear. 5. Potential for taxpayer funds to be used inefficiently.
Value Assessment
Rating: questionable
The contract value of $26.7 million for sales financing over three years appears high without a competitive bidding process. Benchmarking against similar financing contracts is difficult due to the lack of transparency.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award. This limits price discovery and may lead to higher costs for taxpayers as there was no market pressure to offer competitive pricing.
Taxpayer Impact: Taxpayer funds may be at risk of being spent inefficiently due to the absence of competitive bidding, potentially inflating the cost of sales financing.
Public Impact
Citizens may be paying more than necessary for sales financing services. Lack of transparency in sole-source contracts erodes public trust. Defense spending on non-core services warrants scrutiny.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of clear justification for non-competition
- Potential for inflated pricing
Positive Signals
- Contract awarded to a known defense contractor
- Fixed price contract type can provide cost certainty if priced appropriately
Sector Analysis
Sales financing in the defense sector is an unusual category. Typically, defense contracts focus on procurement of goods and services directly related to military operations. The benchmarks for such financing arrangements within the DoD are not readily available, making value assessment challenging.
Small Business Impact
There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. The sole-source nature of the award further limits opportunities for small business participation.
Oversight & Accountability
The lack of competition for this significant contract raises concerns about oversight. Further investigation is needed to understand why this contract was not competed and if adequate justification exists for the sole-source award.
Related Government Programs
- Sales Financing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award lacks competitive justification.
- Potential for overpayment due to lack of price discovery.
- Unclear strategic necessity of sales financing for DoD.
- Limited transparency regarding contract specifics and performance.
Tags
sales-financing, department-of-defense, co, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $26.7 million to LOCKHEED MARTIN CORPORATION. DUMMY BASE DOCUMENT FOR TRANSACTION 6
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 $26.7 million.
What is the period of performance?
Start: 2015-01-01. End: 2017-12-31.
What is the specific nature of the sales financing provided under this contract, and how does it directly support Department of Defense missions?
The provided data does not specify the exact nature of the sales financing. It is unusual for the Department of Defense to engage in extensive sales financing activities. Clarification is needed on whether this relates to financing for defense sales to foreign governments, internal financing mechanisms, or another purpose entirely. Understanding this is crucial for assessing its necessity and value.
What risks are associated with awarding a $26.7 million contract on a sole-source basis for sales financing?
The primary risk is financial inefficiency, where the government may pay a premium due to the absence of competitive bidding. There's also a risk of reduced innovation and a lack of market-driven best practices. Furthermore, a sole-source award can create a perception of favoritism or a lack of due diligence in ensuring the best value for taxpayer dollars.
How effective is a sole-source contract for sales financing in achieving the Department of Defense's objectives compared to a competitive process?
A sole-source contract is generally less effective in achieving optimal value and efficiency compared to a competitive process. While it can ensure a specific provider is engaged quickly, it bypasses the benefits of market competition, such as lower prices, better terms, and innovative solutions. The effectiveness is highly dependent on the specific circumstances and the justification for avoiding competition.
Industry Classification
NAICS: Finance and Insurance › Nondepository Credit Intermediation › Sales Financing
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: 9970 FEDERAL DR, COLORADO SPRINGS, CO, 80921
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $26,749,133
Exercised Options: $26,749,133
Current Obligation: $26,749,133
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2015-01-01
Current End Date: 2017-12-31
Potential End Date: 2017-12-31 00:00:00
Last Modified: 2017-12-05
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