DoD's $52.3M SOSITE Phase 2 contract to Lockheed Martin faces scrutiny over R&D value and competition
Contract Overview
Contract Amount: $52,337,677 ($52.3M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2016-08-24
End Date: 2023-03-01
Contract Duration: 2,380 days
Daily Burn Rate: $22.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: IGF::OT::IGF SYSTEM OF SYSTEMS INTEGR TECHNOLOGY AND EXPER (SOSITE) PHASE 2
Place of Performance
Location: FORT WORTH, TARRANT County, TEXAS, 76108
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $52.3 million to LOCKHEED MARTIN CORPORATION for work described as: IGF::OT::IGF SYSTEM OF SYSTEMS INTEGR TECHNOLOGY AND EXPER (SOSITE) PHASE 2 Key points: 1. The contract awarded to Lockheed Martin for SOSITE Phase 2 represents a significant investment in R&D. 2. Competition was full and open, but the definitive contract award type warrants further examination. 3. Potential risks include cost overruns and the effectiveness of the technology developed. 4. The R&D sector is crucial for defense innovation, but requires careful oversight.
Value Assessment
Rating: questionable
The contract's value of $52.3M for R&D is substantial. Benchmarking against similar 'Research and Development in the Physical, Engineering, and Life Sciences' contracts is difficult without more specific project details. The Cost Plus Fixed Fee structure can lead to cost increases if not managed tightly.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is a positive sign for price discovery. However, the definitive contract award type and the Cost Plus Fixed Fee pricing structure may limit the government's ability to control costs effectively over the contract's duration.
Taxpayer Impact: Taxpayer funds are being invested in advanced R&D. The ultimate value and return on investment will depend on the successful development and deployment of the SOSITE technology.
Public Impact
Investment in advanced defense technology could enhance national security capabilities. The long duration of the contract (2380 days) suggests a complex and potentially evolving project. Lack of small business involvement means benefits may not be distributed broadly.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee pricing can incentivize contractor overspending.
- Long contract duration increases risk of scope creep and cost escalation.
- Lack of small business participation limits economic impact.
- Specific R&D outcomes and their tangible benefits are not clearly defined.
Positive Signals
- Awarded under full and open competition.
- Focus on critical R&D for defense modernization.
Sector Analysis
This contract falls under the Research and Development in the Physical, Engineering, and Life Sciences sector, excluding biotechnology. Spending in this area is vital for maintaining a technological edge, but often involves high uncertainty and long development cycles. Benchmarks are difficult due to the specialized nature of R&D.
Small Business Impact
The contract data indicates no small business participation (ss: false, sb: false). This suggests that the prime contractor, Lockheed Martin, is handling the entire scope of work, potentially limiting opportunities for smaller innovative firms in this R&D initiative.
Oversight & Accountability
The contract's long duration and Cost Plus Fixed Fee structure necessitate robust oversight from the Department of Defense to ensure cost control, adherence to scope, and achievement of R&D objectives. Regular performance reviews and audits are crucial.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Cost Plus Fixed Fee pricing structure.
- Long contract duration (2380 days).
- No stated small business participation.
- R&D contracts inherently carry high uncertainty.
- Lack of detailed public information on specific deliverables.
Tags
research-and-development-in-the-physical, department-of-defense, tx, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $52.3 million to LOCKHEED MARTIN CORPORATION. IGF::OT::IGF SYSTEM OF SYSTEMS INTEGR TECHNOLOGY AND EXPER (SOSITE) PHASE 2
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 $52.3 million.
What is the period of performance?
Start: 2016-08-24. End: 2023-03-01.
What specific technological advancements are expected from SOSITE Phase 2, and how do they align with current and future defense needs?
SOSITE Phase 2 likely aims to integrate complex systems and technologies for enhanced situational awareness and operational effectiveness. The specific advancements would detail improvements in data fusion, command and control, or network-centric warfare capabilities. Alignment with defense needs would be demonstrated through documented requirements, threat assessments, and strategic modernization plans that necessitate such integrated technological solutions.
Given the Cost Plus Fixed Fee structure, what mechanisms are in place to mitigate the risk of cost overruns and ensure efficient use of taxpayer funds?
Mitigation strategies for Cost Plus Fixed Fee contracts typically include stringent baseline cost estimates, detailed work breakdown structures, and performance metrics. The government's oversight team must actively monitor expenditures, review contractor cost reports, and enforce contract clauses that allow for adjustments or penalties if costs exceed projections without justification. Regular progress reviews and audits are essential to ensure efficiency.
How will the effectiveness and ultimate value of the SOSITE Phase 2 R&D be measured and validated post-contract completion?
Effectiveness will be measured through a combination of technical performance metrics (TPMs) defined in the contract, operational testing and evaluation (OT&E) exercises, and user feedback from relevant military units. Validation of value involves assessing whether the developed technology meets the initial requirements, provides a demonstrable improvement in mission capabilities, offers a favorable return on investment compared to alternatives, and is successfully integrated into the operational force structure.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: BASIC RESEARCH
Offers Received: 2
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp
Address: 1 LOCKHEED BLVD, 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: $54,629,892
Exercised Options: $54,629,892
Current Obligation: $52,337,677
Actual Outlays: $2,342,386
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2016-08-24
Current End Date: 2023-03-01
Potential End Date: 2023-03-01 00:00:00
Last Modified: 2022-10-17
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