DoD awards $15.9M to Lockheed Martin for DRACO software image quality improvement

Contract Overview

Contract Amount: $15,936,808 ($15.9M)

Contractor: Lockheed Martin Corp

Awarding Agency: Department of Defense

Start Date: 2023-12-15

End Date: 2026-06-30

Contract Duration: 928 days

Daily Burn Rate: $17.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: DRACO 7.0 CONTINUED MATURATION OF THE DRACO SOFTWARE SUITE TO PROVIDE IMAGE QUALITY IMPROVEMENT FOR INTELLIGENCE PRODUCTS.

Place of Performance

Location: KING OF PRUSSIA, MONTGOMERY County, PENNSYLVANIA, 19406

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $15.9 million to LOCKHEED MARTIN CORP for work described as: DRACO 7.0 CONTINUED MATURATION OF THE DRACO SOFTWARE SUITE TO PROVIDE IMAGE QUALITY IMPROVEMENT FOR INTELLIGENCE PRODUCTS. Key points: 1. Contract focuses on enhancing intelligence product image quality through software maturation. 2. Sole-source award to Lockheed Martin raises questions about competition and potential cost savings. 3. Long contract duration (928 days) suggests a complex and ongoing development effort. 4. The contract type (Cost Plus Fixed Fee) can lead to cost overruns if not managed carefully. 5. This award falls under the Guided Missile and Space Vehicle Manufacturing sector. 6. The contract is managed by the Department of the Air Force, indicating a focus on aerospace and defense intelligence needs.

Value Assessment

Rating: fair

The contract value of $15.9 million for software maturation appears moderate for a large defense contractor like Lockheed Martin. However, without specific benchmarks for DRACO software development or comparable image quality improvement projects, a precise value-for-money assessment is difficult. The Cost Plus Fixed Fee structure introduces risk, as actual costs could exceed initial estimates, potentially impacting the overall value. Further analysis of the fixed fee component and the contractor's historical performance on similar projects would be beneficial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Lockheed Martin, was considered. This lack of competition limits the government's ability to explore alternative solutions or secure the most favorable pricing. While sole-source awards can be justified for unique capabilities or existing systems, they necessitate rigorous justification to ensure taxpayer funds are used efficiently.

Taxpayer Impact: The absence of competition means taxpayers may not benefit from the price discovery that typically occurs in a competitive bidding process, potentially leading to higher costs than if multiple vendors had vied for the contract.

Public Impact

Intelligence agencies and military branches will benefit from improved image quality in their intelligence products. The services delivered include the continued maturation of the DRACO software suite. The geographic impact is primarily within the Department of Defense's operational areas, with potential benefits extending to national security. Workforce implications may include specialized software engineers and developers at Lockheed Martin.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Cost Plus Fixed Fee contract type carries inherent risk of cost overruns.
Lack of transparency in the justification for a sole-source award.
Long contract duration could indicate potential for scope creep or unforeseen development challenges.

Positive Signals

Focus on improving critical intelligence product quality, enhancing national security capabilities.
Award to a known, experienced contractor (Lockheed Martin) suggests a degree of reliability in execution.
Specific focus on image quality improvement addresses a defined need within intelligence operations.

Sector Analysis

The defense sector, particularly within intelligence and aerospace, heavily relies on advanced software solutions for data processing and analysis. The market for intelligence software and image enhancement technologies is competitive, with significant investment from both government and private entities. This contract fits within the broader category of defense IT and specialized software development, where companies like Lockheed Martin are major players. Comparable spending benchmarks would involve looking at other software development contracts for intelligence systems within the DoD.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Lockheed Martin is a large prime contractor, and there is no explicit information regarding subcontracting plans for small businesses within this award. The absence of a set-aside suggests that the primary focus is on the prime contractor's capabilities, and the impact on the small business ecosystem would depend on any voluntary subcontracting efforts by Lockheed Martin.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Air Force contracting and program management offices. Accountability measures would be tied to the achievement of milestones and deliverables outlined in the Cost Plus Fixed Fee contract. Transparency is generally limited for sole-source defense contracts, though contract awards are publicly reported. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Intelligence Software Development
Image Processing Systems
Defense IT Modernization
Aerospace Software Engineering
National Reconnaissance Office Programs

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Potential for cost overruns
Lack of competitive pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.9 million to LOCKHEED MARTIN CORP. DRACO 7.0 CONTINUED MATURATION OF THE DRACO SOFTWARE SUITE TO PROVIDE IMAGE QUALITY IMPROVEMENT FOR INTELLIGENCE PRODUCTS.

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 $15.9 million.

What is the period of performance?

Start: 2023-12-15. End: 2026-06-30.

What is the historical performance of Lockheed Martin on similar software development contracts for the Department of Defense, particularly those involving image processing or intelligence products?

Lockheed Martin has a long and extensive history of developing complex software systems for the Department of Defense, including those related to intelligence, surveillance, and reconnaissance (ISR). They have been involved in numerous projects requiring advanced image processing, data analysis, and software maturation. While specific performance metrics for past projects are often not publicly disclosed in detail, the company's continued selection for high-value defense contracts suggests a generally positive track record. However, like any large contractor, there may have been instances of cost overruns or schedule delays on specific programs. A deeper dive into publicly available contract award data and performance reviews, if accessible, would provide a more granular understanding of their performance on comparable projects.

How does the $15.9 million contract value compare to other government contracts for similar software maturation and image quality improvement services?

Benchmarking the $15.9 million contract value for DRACO software maturation is challenging without access to a comprehensive database of comparable projects. However, for large-scale software development and enhancement efforts within the defense sector, this value can be considered moderate. Projects involving foundational system development or extensive upgrades can range from tens of millions to billions of dollars. The 'image quality improvement' aspect suggests a specialized function. To provide a more precise comparison, one would need to identify contracts with similar scopes of work, contractor capabilities, and contract types (e.g., Cost Plus Fixed Fee) awarded by agencies like the Air Force or other intelligence community components.

What are the specific risks associated with the Cost Plus Fixed Fee (CPFF) contract type in this context, and what mitigation strategies are in place?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is that the contractor is reimbursed for all allowable costs incurred, plus a fixed fee representing profit. This structure can incentivize cost overruns, as the contractor may not have as strong a financial incentive to control costs compared to a fixed-price contract. If the actual costs exceed estimates, the government pays more. Mitigation strategies typically involve robust government oversight, detailed cost accounting standards, clear definition of allowable costs, and strong program management to monitor progress and expenditures closely. The fixed fee itself is negotiated and should reflect the level of risk and effort involved. Regular audits and reviews are crucial to ensure costs are reasonable and allocable.

Given this is a sole-source award, what was the justification provided by the Department of the Air Force for not competing this requirement?

Sole-source awards are typically justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required supply or service, or when there is a compelling urgency. For software development, justifications often cite unique capabilities, proprietary technology, or the need to maintain continuity with an existing system where only the incumbent contractor possesses the necessary knowledge and expertise. Without access to the specific justification document for this DRACO 7.0 contract, it's presumed the Department of the Air Force determined that Lockheed Martin was the only viable source, possibly due to the specialized nature of the DRACO software suite and the required enhancements. This justification would need to demonstrate why other potential sources could not meet the requirement.

What is the expected impact of the DRACO 7.0 software enhancement on the overall effectiveness and efficiency of intelligence product generation and analysis within the Department of Defense?

The enhancement of the DRACO software suite to provide image quality improvement is expected to directly impact the effectiveness and efficiency of intelligence product generation and analysis. Better image quality can lead to more accurate identification of targets, clearer understanding of complex scenes, and reduced ambiguity in intelligence assessments. This can improve decision-making speed and accuracy for military commanders and intelligence analysts. Efficiency gains may arise from reduced time spent on manual image enhancement or clarification, allowing analysts to focus on higher-level interpretation and reporting. Ultimately, improved intelligence products contribute to enhanced situational awareness and mission success.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing

Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS

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

Address: 230 MALL BLVD, KING OF PRUSSIA, PA, 19406

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: $17,061,126

Exercised Options: $17,061,126

Current Obligation: $15,936,808

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline