DoD awards $11.1M for Space Sustainment Support to Lockheed Martin Corp

Contract Overview

Contract Amount: $11,133,354 ($11.1M)

Contractor: Lockheed Martin Corp

Awarding Agency: Department of Defense

Start Date: 2024-12-01

End Date: 2026-11-30

Contract Duration: 729 days

Daily Burn Rate: $15.3K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SPACE SUSTAINMENT SUPPORT IN ACCORDANCE WITH SECTION J, ATTACHMENT 1 - PERFORMANCE WORK STATEMENT

Place of Performance

Location: SUNNYVALE, SANTA CLARA County, CALIFORNIA, 94089

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $11.1 million to LOCKHEED MARTIN CORP for work described as: SPACE SUSTAINMENT SUPPORT IN ACCORDANCE WITH SECTION J, ATTACHMENT 1 - PERFORMANCE WORK STATEMENT Key points: 1. Contract awarded as a sole-source action, raising questions about potential cost efficiencies. 2. The firm-fixed-price contract type suggests a defined scope and predictable costs. 3. Performance period of approximately two years indicates a medium-term support requirement. 4. The engineering services NAICS code suggests a focus on technical and design support. 5. No small business set-aside was utilized, potentially limiting opportunities for smaller firms. 6. The contract is not competed, which can impact price discovery and value for money.

Value Assessment

Rating: questionable

Benchmarking the value of this $11.1 million contract is challenging without comparable sole-source awards for similar space sustainment services. The firm-fixed-price structure is generally favorable for cost control, but the lack of competition means there's no direct market comparison to assess if the pricing is optimal. Without a competitive process, it's difficult to ascertain if the government is receiving the best possible value for its investment in space sustainment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities or when it's deemed not to be in the government's best interest to compete. The lack of competition limits the government's ability to leverage market forces to drive down prices and ensure the most innovative solutions are considered.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to offer the lowest price. This limits the government's ability to achieve cost savings through market dynamics.

Public Impact

The Department of the Air Force is the primary beneficiary, receiving critical space sustainment support. Services delivered are essential for maintaining the operational readiness and longevity of space assets. The contract's geographic impact is likely focused on facilities and personnel involved in space operations, potentially within California where the award is noted. Workforce implications may include specialized engineering and technical roles required for space system sustainment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher costs for taxpayers.
Sole-source award limits visibility into alternative solutions and pricing benchmarks.
Potential for vendor lock-in due to specialized nature of space sustainment.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Award to a known entity like Lockheed Martin may indicate a reliance on established expertise.
Contract duration suggests a stable, ongoing need for these services.

Sector Analysis

The space sustainment sector is a critical and growing area within the aerospace and defense industry. It involves maintaining and extending the life of satellites, ground systems, and related infrastructure. This contract fits within the broader defense spending on space capabilities, which has seen increased investment due to geopolitical factors and the growing reliance on space-based assets for communication, intelligence, and navigation. Comparable spending benchmarks are difficult to establish for sole-source awards, but the overall defense budget allocates significant resources to space programs.

Small Business Impact

This contract does not appear to include a small business set-aside. As a sole-source award to a large prime contractor, there may be limited direct subcontracting opportunities for small businesses unless explicitly mandated or pursued by the prime. The absence of a set-aside means that the primary contract vehicle is not designed to directly foster small business participation, though the prime contractor's own subcontracting plan could still involve them.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, which obligates the contractor to deliver specified services within the agreed price. Transparency is limited due to the sole-source nature of the award, with details on the justification for not competing likely residing within internal DoD documentation. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Space Systems Command Contracts
Air Force Satellite Operations
Defense Space Acquisition Programs
Engineering Services for Defense
Aerospace Sustainment Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns without competitive pressure

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.1 million to LOCKHEED MARTIN CORP. SPACE SUSTAINMENT SUPPORT IN ACCORDANCE WITH SECTION J, ATTACHMENT 1 - PERFORMANCE WORK STATEMENT

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 $11.1 million.

What is the period of performance?

Start: 2024-12-01. End: 2026-11-30.

What is Lockheed Martin Corp's track record with similar space sustainment contracts for the Department of Defense?

Lockheed Martin Corporation is a major defense contractor with extensive experience in space systems development, manufacturing, and sustainment. They have a long history of supporting various U.S. military branches, including the Air Force, with complex space-based programs. Their portfolio includes satellite programs, launch services, and associated ground support. While specific details on past space sustainment contracts are often proprietary, Lockheed Martin's established presence in the sector suggests a deep understanding of the technical requirements and operational demands involved. Their performance on previous, similar contracts would be a key factor in the DoD's decision to award this sole-source action, likely based on demonstrated capability, past performance evaluations, and existing program knowledge.

How does the $11.1 million value of this contract compare to other space sustainment efforts within the DoD?

The $11.1 million value for this specific space sustainment support contract appears to be moderate, likely representing a focused scope of work rather than a comprehensive, multi-year program. The Department of Defense invests billions annually in space capabilities, encompassing research, development, acquisition, and sustainment of numerous satellite constellations and related infrastructure. Larger contracts in this domain can range from hundreds of millions to billions of dollars for major satellite programs or extensive sustainment efforts. This particular award, being a firm-fixed-price delivery order with a two-year duration, suggests it might cover specific sustainment tasks, technical support, or upgrades for a particular space asset or system, rather than the entire lifecycle management of a large constellation. Without more context on the specific services rendered, direct comparison to broader DoD space spending is difficult, but it is a component of the larger defense space budget.

What are the primary risks associated with awarding a sole-source contract for space sustainment?

The primary risks associated with awarding a sole-source contract for space sustainment include potential overpricing due to the absence of competitive bidding, limited innovation as there's no pressure to outperform rivals, and a risk of vendor lock-in where the government becomes overly reliant on a single provider. For specialized fields like space sustainment, where technical expertise is highly concentrated, these risks can be amplified. There's also a risk that the government might not be aware of or able to access more cost-effective or technologically superior solutions that could have emerged from a competitive process. Furthermore, sole-source awards can sometimes face greater public scrutiny regarding fairness and value for taxpayer money, especially if the justification for the sole-source award is not robustly documented and communicated.

How effective is the firm-fixed-price (FFP) contract type in managing costs for space sustainment services?

The firm-fixed-price (FFP) contract type is generally considered effective for managing costs when the scope of work is well-defined and understood, as is often the case with sustainment services. Under an FFP contract, the contractor assumes most of the risk for cost overruns, agreeing to perform the work for a predetermined price. This provides cost certainty for the government and incentivizes the contractor to control expenses efficiently. For space sustainment, where the tasks might involve routine maintenance, technical support, or specific upgrades with clear specifications, FFP can be advantageous. However, if unforeseen technical challenges arise that significantly alter the scope, the FFP structure can lead to disputes or require contract modifications, potentially increasing costs. The effectiveness hinges on the accuracy of the initial scope definition and the contractor's ability to manage their internal costs.

What are the historical spending patterns for space sustainment support within the Department of the Air Force?

Historical spending patterns for space sustainment support within the Department of the Air Force (and the broader DoD) have shown a consistent and increasing trend over the past decade. As the reliance on space-based assets for national security, communications, and intelligence grows, so does the need for robust sustainment to ensure the longevity and operational readiness of these critical systems. Spending encompasses a wide range of activities, including satellite maintenance, software updates, ground system support, anomaly resolution, and life extension initiatives. While specific figures fluctuate based on program lifecycles and new acquisitions, the overall trajectory indicates a significant and growing investment in maintaining existing space capabilities, often through long-term contracts with major aerospace and defense firms. This particular $11.1 million award represents a segment of that larger, ongoing investment.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1111 LOCKHEED MARTIN WAY, SUNNYVALE, CA, 94089

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

Financial Breakdown

Contract Ceiling: $49,478,079

Exercised Options: $19,266,284

Current Obligation: $11,133,354

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0003920D0022

IDV Type: IDC

Timeline