Air Force Awards $60.7M to Lockheed Martin for Satellite Telecommunications Engineering Support

Contract Overview

Contract Amount: $60,739,097 ($60.7M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2020-03-31

End Date: 2025-09-30

Contract Duration: 2,009 days

Daily Burn Rate: $30.2K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: CONTRACTOR IN-PLANT ENGINEERING / SUSTAINMENT IN SUPPORT OF THE RELAY CONTROL ELEMENT (RCE)

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $60.7 million to LOCKHEED MARTIN CORPORATION for work described as: CONTRACTOR IN-PLANT ENGINEERING / SUSTAINMENT IN SUPPORT OF THE RELAY CONTROL ELEMENT (RCE) Key points: 1. Significant contract value highlights the importance of RCE sustainment. 2. Sole-source award raises questions about competition and potential cost savings. 3. Long contract duration (2025 end date) suggests a critical, ongoing need. 4. Focus on satellite telecommunications indicates a specialized and high-tech sector.

Value Assessment

Rating: fair

The contract value of $60.7M over approximately 5 years is substantial. Without comparable contracts or detailed cost breakdowns, it's difficult to definitively assess value for money. However, the firm fixed-price structure provides some cost certainty.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive process. The rationale for sole-sourcing needs further examination.

Taxpayer Impact: The lack of competition in this sole-source award may result in higher costs for taxpayers than if the contract had been competitively bid.

Public Impact

Ensures continued operation and maintenance of critical satellite communication systems. Supports national security interests through reliable telecommunications infrastructure. Potential for cost overruns due to sole-source nature impacts taxpayer funds. Long-term reliance on a single contractor may stifle innovation in the sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price discovery.
Lack of transparency in justification for sole-sourcing.
Extended contract duration could mask inefficiencies.
Potential for contractor lock-in.

Positive Signals

Firm fixed-price contract provides cost certainty.
Supports critical national security infrastructure.
Long-term sustainment ensures operational continuity.

Sector Analysis

This contract falls within the IT and Defense sectors, specifically focusing on satellite telecommunications. Spending in this area is often high due to the complexity and strategic importance of space-based assets. Benchmarks are difficult without specific system details.

Small Business Impact

The data indicates this is a large contract awarded to Lockheed Martin Corporation. There is no information provided to suggest any specific allocation or consideration for small businesses in this award.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure the government is receiving fair value and that the justification for not competing is sound. Regular performance reviews and cost audits would be crucial.

Related Government Programs

Satellite Telecommunications
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Sole-source award lacks competitive pressure.
Potential for inflated pricing without competition.
Long contract duration may obscure performance issues.
Limited transparency on justification for sole-sourcing.
Risk of contractor lock-in and reduced future competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $60.7 million to LOCKHEED MARTIN CORPORATION. CONTRACTOR IN-PLANT ENGINEERING / SUSTAINMENT IN SUPPORT OF THE RELAY CONTROL ELEMENT (RCE)

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 $60.7 million.

What is the period of performance?

Start: 2020-03-31. End: 2025-09-30.

What is the specific justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one contractor can fulfill the requirement. To ensure fair and reasonable pricing, the government would likely conduct a price analysis based on historical data, cost proposals, or market research. However, without the specific justification documentation, it's impossible to verify these steps.

How does the cost of this contract compare to similar satellite telecommunications engineering support contracts, particularly those awarded competitively?

Direct comparison is challenging without access to detailed cost breakdowns and specific service scopes. However, sole-source contracts are generally expected to be more expensive than competitively awarded ones due to the absence of market pressure. An analysis of the contractor's proposed costs against independent government cost estimates or benchmarks for similar services would be necessary for a definitive comparison.

What are the key performance indicators (KPIs) for this contract, and how is Lockheed Martin's performance being measured to ensure effective sustainment of the RCE?

Key performance indicators would likely focus on system availability, response times for engineering support, successful implementation of sustainment activities, and adherence to project timelines. The Department of the Air Force would be responsible for monitoring these KPIs through regular reporting, site visits, and performance reviews to ensure the effective sustainment of the Relay Control Element (RCE).

Industry Classification

NAICS: Information › Satellite Telecommunications › Satellite Telecommunications

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: FA873019R0034

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 13560 DULLES TECHNOLOGY DR, HERNDON, VA, 20171

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $67,880,422

Exercised Options: $61,399,227

Current Obligation: $60,739,097

Actual Outlays: $1,228,970

Subaward Activity

Number of Subawards: 41

Total Subaward Amount: $9,690,762

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA873020D0001

IDV Type: IDC

Timeline