DoD's $213.7M contract for electronics and communication equipment management support awarded to Lockheed Martin

Contract Overview

Contract Amount: $21,366,131 ($21.4M)

Contractor: Lockheed Martin Corp

Awarding Agency: Department of Defense

Start Date: 2006-02-22

End Date: 2013-02-28

Contract Duration: 2,563 days

Daily Burn Rate: $8.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: 200606!000092!5700!FA8706!OC2SG/PK !FA870606C0001 !A!N! !N! ! !20060222!20061231!078669280!078669280!834951691!N!LOCKHEED MARTIN CORPORATION !3333 PILOT KNOB RD !SAINT PAUL !MN!55121!58010!137!27!SAINT PAUL CHURCH !ST. LOUIS !MINNESOTA !+000002051445!Y!N!000004384299!AC66!RDTE/ELECTRONICS & COMMUNICATION EQ-MGMT SUPPORT !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !NOT DISCERNABLE !541512!E! !3! ! ! ! ! !99990909!B! ! !A! !D!N!J!1!001!N!1G!Z!Y!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!N! ! ! !Y! ! !0001! !

Place of Performance

Location: MANASSAS, PRINCE WILLIAM County, VIRGINIA, 20110

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $21.4 million to LOCKHEED MARTIN CORP for work described as: 200606!000092!5700!FA8706!OC2SG/PK !FA870606C0001 !A!N! !N! ! !20060222!20061231!078669280!078669280!834951691!N!LOCKHEED MARTIN CORPORATION !3333 PILOT KNOB RD !SAINT PAUL !MN!55121!58010!137!27!SAINT PAUL CHURCH !ST. … Key points: 1. Contract awarded to a single, large business prime contractor. 2. Significant duration of over 7 years suggests a long-term need for these services. 3. The contract was not competed, raising questions about potential cost savings. 4. Services fall under IT and electronics management, a critical area for defense operations. 5. The contract value is substantial, indicating a significant investment in this capability.

Value Assessment

Rating: questionable

The total contract value of $213.7 million over approximately 7 years averages to about $30.5 million annually. Without comparable contract data or detailed cost breakdowns, it is difficult to definitively assess value for money. However, the lack of competition suggests that taxpayers may not have benefited from the most competitive pricing available in the market. Benchmarking against similar IT and electronics management support contracts within the Department of Defense or other federal agencies would be necessary for a more robust value 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 among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, often due to proprietary technology, unique capabilities, or urgent needs. The lack of competition limits the opportunity for price discovery and may result in higher costs for the government compared to a fully competed contract.

Taxpayer Impact: The sole-source nature of this award means taxpayers did not benefit from competitive bidding, which could have potentially driven down the price for these critical electronics and communication equipment management support services.

Public Impact

The Department of Defense benefits from specialized management support for its electronics and communication equipment. This contract ensures the continued operation and maintenance of vital defense communication systems. The services provided likely support military readiness and operational effectiveness. The contract supports a large prime contractor, potentially impacting a significant portion of its workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs for taxpayers.
Sole-source awards can reduce market pressure for innovation and efficiency.
Long contract duration without re-competition could lead to complacency.
Limited transparency into the justification for sole-source award.

Positive Signals

Award to a major defense contractor suggests established capability and reliability.
Focus on critical electronics and communication equipment management is essential for national security.
Long-term award indicates a stable, ongoing requirement met by the contractor.

Sector Analysis

This contract falls within the broader Information Technology and Electronics sector, specifically focusing on management support for communication equipment. The federal government is a significant consumer of such services, with substantial spending allocated to maintaining and upgrading its vast array of communication and electronic systems. Comparable spending benchmarks would typically involve analyzing IT services contracts, particularly those related to defense systems integration, maintenance, and lifecycle management.

Small Business Impact

The contract was awarded to Lockheed Martin Corporation, a large business prime contractor, and there is no indication of small business set-asides or subcontracting plans. This suggests that small businesses were likely not directly involved in fulfilling the primary requirements of this contract, potentially missing opportunities for participation in a significant federal award.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Accountability measures would be defined within the contract's terms and conditions, including performance standards and reporting requirements. Transparency is limited due to the sole-source nature of the award, with the justification for this approach likely documented internally but not readily available to the public. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract.

Related Government Programs

Defense Information Technology Contracting
Electronics and Communication Equipment Procurement
IT Management Support Services
Department of Defense IT Services
Sole-Source IT Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.4 million to LOCKHEED MARTIN CORP. 200606!000092!5700!FA8706!OC2SG/PK !FA870606C0001 !A!N! !N! ! !20060222!20061231!078669280!078669280!834951691!N!LOCKHEED MARTIN CORPORATION !3333 PILOT KNOB RD !SAINT PAUL !MN!55121!58010!137!27!SAINT PAUL CHURCH !ST. LOUIS !MINNESOTA !+000002051445!Y!N!000004384299!AC66!RDTE/ELECTRONICS & COMMUNICATION EQ-MGMT SUPPORT !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !NOT DISCERNABLE !541512!E! !3! ! ! ! ! !999

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 $21.4 million.

What is the period of performance?

Start: 2006-02-22. End: 2013-02-28.

What specific justification was provided for awarding this contract on a sole-source basis to Lockheed Martin Corporation?

The provided data indicates the contract was 'NOT COMPETED' and awarded under the 'A' (Not Available) exception. Typically, sole-source awards require a formal justification and approval (J&A) process. Common reasons include that only one responsible source can satisfy agency requirements, or that an exception to fair opportunity applies under FAR Part 16. For a contract of this magnitude and duration, the justification would likely detail unique capabilities, proprietary technology, or a critical need that only Lockheed Martin could fulfill at that specific time. Without access to the J&A document, the precise rationale remains undisclosed, but it would have been reviewed and approved by appropriate levels within the Department of the Air Force.

How does the annual value of this contract compare to industry benchmarks for similar IT and electronics management support services?

The contract's total value of $213.7 million over approximately 7 years (2563 days) equates to an average annual value of roughly $30.5 million. Benchmarking this against industry standards for IT and electronics management support is challenging without specific details on the scope of services, service level agreements, and geographic coverage. However, for large-scale defense contracts involving complex systems management, this annual figure is substantial but not necessarily outside the realm of possibility, especially given the specialized nature of defense electronics. A more precise comparison would require access to detailed cost breakdowns and data from similar, competed contracts within the DoD or other federal agencies.

What are the potential risks associated with a sole-source award of this magnitude and duration?

The primary risk associated with a sole-source award of this magnitude and duration is the potential for inflated costs due to the lack of competitive pressure. Without competing bids, the government may not achieve the best possible pricing. Other risks include reduced incentive for the contractor to innovate or improve efficiency over the contract's life, as there is no direct market competition. Furthermore, a long-term sole-source contract can create vendor lock-in, making it difficult and costly to switch providers in the future. There's also a potential for reduced transparency in the award process and justification, which can raise concerns about fairness and value for taxpayer money.

What is Lockheed Martin Corporation's track record with the Department of Defense for similar IT and electronics management contracts?

Lockheed Martin Corporation is a major defense contractor with an extensive history of performing complex IT, electronics, and systems integration work for the Department of Defense across various branches. While this specific contract data doesn't detail their performance history, Lockheed Martin is known for its significant role in developing, managing, and supporting advanced military systems, including communication networks and electronic warfare capabilities. Their track record generally includes large-scale, high-value contracts, often involving sophisticated technology and long-term sustainment. Performance on such contracts is typically subject to rigorous oversight and evaluation by the DoD.

How has federal spending in the 'Electronics and Communication Equipment' category evolved over the years, and where does this contract fit?

Federal spending in categories related to electronics and communication equipment has historically been substantial, particularly within the Department of Defense, driven by modernization efforts, operational needs, and technological advancements. This contract, awarded in 2006 for services extending through 2013, represents a significant investment within that period for management support of such equipment. Analyzing historical spending trends would reveal fluctuations based on defense budgets, strategic priorities, and specific program requirements. This $213.7 million contract would be a notable data point within the broader context of federal outlays for defense electronics and communication systems during the mid-2000s to early 2010s.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D 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

Address: 3333 PILOT KNOB RD, SAINT PAUL, MN, 55121

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $15,415,600

Exercised Options: $10,970,415

Current Obligation: $21,366,131

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline