DoD Awards $110M Lockheed Martin Contract for GMS2 Follow-On Production, Raising Competition Concerns
Contract Overview
Contract Amount: $110,163,427 ($110.2M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2008-06-30
End Date: 2013-06-12
Contract Duration: 1,808 days
Daily Burn Rate: $60.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: GMS2 FOLLOW-ON PRODUCTION
Place of Performance
Location: ORLANDO, ORANGE County, FLORIDA, 32819, UNITED STATES OF AMERICA
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $110.2 million to LOCKHEED MARTIN CORPORATION for work described as: GMS2 FOLLOW-ON PRODUCTION Key points: 1. Significant contract value of $110 million awarded to a single vendor. 2. Lack of competition raises questions about price discovery and potential overspending. 3. The contract is for 'All Other Miscellaneous Electrical Equipment and Component Manufacturing', a broad category. 4. Awarded by the Department of Defense, highlighting defense sector spending patterns.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee (CPFF) structure, combined with a lack of competition, makes a direct pricing assessment difficult. Without competitive bids, it's hard to determine if the $110 million represents fair market value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source or limited competition award. This significantly limits price discovery and may lead to higher costs for taxpayers as there is no market pressure to offer the best price.
Taxpayer Impact: The lack of competition in this $110 million award means taxpayers may not be receiving the best possible value for their investment.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. The broad NAICS code (335999) makes it difficult to assess the specific technology or equipment procured. Long contract duration (1808 days) for a production contract warrants scrutiny. The contract's sole-source nature could stifle innovation in the relevant manufacturing sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- CPFF contract type
- Broad NAICS code
Positive Signals
- Awarded to a known defense contractor
- Contract supports Department of Defense needs
Sector Analysis
The defense sector, particularly for specialized electrical components, often involves complex procurements. Benchmarks for similar 'All Other Miscellaneous Electrical Equipment' contracts are hard to establish due to the broad NAICS code and the sole-source nature of this award.
Small Business Impact
The data indicates this contract was not awarded to a small business. Further analysis would be needed to determine if subcontracting opportunities were offered to small businesses.
Oversight & Accountability
The Department of Defense, through the Defense Contract Management Agency, is responsible for overseeing this contract. The lack of competition suggests that oversight should focus on cost reasonableness and performance verification.
Related Government Programs
- All Other Miscellaneous Electrical Equipment and Component Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award raises concerns about fair pricing.
- CPFF contract type can lead to cost overruns.
- Broad NAICS code obscures specific procurement details.
- Long contract duration requires robust oversight.
- Lack of small business participation indicated.
Tags
all-other-miscellaneous-electrical-equip, department-of-defense, fl, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $110.2 million to LOCKHEED MARTIN CORPORATION. GMS2 FOLLOW-ON PRODUCTION
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $110.2 million.
What is the period of performance?
Start: 2008-06-30. End: 2013-06-12.
What specific electrical components or systems are being produced under this contract, and why was competition deemed unnecessary?
The contract falls under a broad NAICS code (335999), making it difficult to ascertain the specific items. The 'NOT COMPETED' status indicates that a justification for other than full and open competition was likely accepted by the agency. This could be due to proprietary technology, urgent need, or lack of available sources, but without further details, the rationale remains unclear and warrants investigation.
How does the Cost Plus Fixed Fee (CPFF) structure impact the government's risk and the contractor's incentive for cost control in this sole-source award?
A CPFF contract allows the contractor to recover all allowable costs plus a fixed fee representing profit. In a sole-source scenario, this structure shifts significant cost risk to the government. The contractor has less incentive to control costs aggressively because their profit (the fixed fee) is predetermined, not tied to cost savings, potentially leading to higher overall expenditures.
What is the potential impact of this $110 million sole-source award on innovation and market competition within the electrical component manufacturing sector?
Sole-source awards, especially for substantial amounts, can stifle innovation by limiting opportunities for other companies to compete and develop alternative solutions. It may signal to the market that established contractors are favored, potentially discouraging new entrants or investment in research and development by smaller, more agile firms within this specific manufacturing niche.
Industry Classification
NAICS: Manufacturing › Other Electrical Equipment and Component Manufacturing › All Other Miscellaneous Electrical Equipment and Component Manufacturing
Product/Service Code: FIRE CONTROL EQPT.
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: 5600 W SAND LAKE RD MP125, ORLANDO, FL, 32819
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $111,216,731
Exercised Options: $111,216,731
Current Obligation: $110,163,427
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2008-06-30
Current End Date: 2013-06-12
Potential End Date: 2013-06-12 00:00:00
Last Modified: 2015-03-30
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