DoD awards $397M to Lockheed Martin for Engineering Services, a sole-source contract
Contract Overview
Contract Amount: $397,295,704 ($397.3M)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2003-11-26
End Date: 2014-11-30
Contract Duration: 4,022 days
Daily Burn Rate: $98.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Place of Performance
Location: SUNNYVALE, SANTA CLARA County, CALIFORNIA, 94089
Plain-Language Summary
Department of Defense obligated $397.3 million to LOCKHEED MARTIN CORP for work described as: Key points: 1. Significant contract value of $397M awarded to a single large defense contractor. 2. Sole-source award raises questions about competition and potential price inflation. 3. Long contract duration (2003-2014) suggests a sustained need for these services. 4. The 'Engineering Services' category is broad and could encompass various critical functions.
Value Assessment
Rating: questionable
The contract type is 'Cost Plus Award Fee', which can incentivize contractor performance but also lead to higher costs if not managed tightly. Without comparable contracts, assessing the pricing against market rates is difficult.
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.
Taxpayer Impact: The lack of competition for a nearly $400M contract likely results in a higher cost to taxpayers than if multiple vendors had vied for the work.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. The long-term nature of the contract could indicate a critical, ongoing need for these specific engineering services. Lack of transparency in pricing due to sole-source award hinders public understanding of defense spending.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Long contract duration
- Lack of small business participation
Positive Signals
- Award to a major defense contractor
- Specific engineering services provided
Sector Analysis
Engineering services are crucial for defense operations, encompassing design, development, and maintenance of complex systems. Benchmarks for such services are highly variable based on scope and complexity, but a $397M sole-source award warrants scrutiny.
Small Business Impact
The data indicates no small business participation in this contract. This is common for large, sole-source defense contracts awarded to prime contractors, but it represents a missed opportunity for small businesses to contribute and grow.
Oversight & Accountability
The 'DCA' award action code suggests a 'Defense Contract Audit Agency' review or similar oversight, but the sole-source nature and cost-plus structure necessitate robust government oversight to ensure fair pricing and effective service delivery.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award limits competition and price discovery.
- Cost-plus contract type can lead to higher costs if not managed effectively.
- Long contract duration (over 11 years) may indicate potential for cost creep.
- Lack of small business participation.
- Limited transparency on specific services and performance metrics.
Tags
engineering-services, department-of-defense, ca, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $397.3 million to LOCKHEED MARTIN CORP. See the official description on USAspending.
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 $397.3 million.
What is the period of performance?
Start: 2003-11-26. End: 2014-11-30.
What specific engineering services were provided under this contract, and how did their criticality justify a sole-source award?
The contract was for 'Engineering Services' (NAICS 541330) and was awarded sole-source. While the specific services are not detailed, such contracts often involve highly specialized technical support, system integration, or research and development critical to national security. The justification for a sole-source award would typically hinge on unique capabilities, proprietary technology, or urgent national defense needs that only Lockheed Martin could meet within the required timeframe.
How does the 'Cost Plus Award Fee' structure compare to other contract types for similar engineering services in terms of cost-effectiveness for the government?
Cost Plus Award Fee (CPAF) contracts allow the government to reimburse the contractor for allowable costs plus a fee that is adjusted based on performance against pre-defined criteria. While CPAF can incentivize performance and flexibility, it carries a higher risk of cost overruns compared to fixed-price contracts. Without detailed performance metrics and cost data, it's challenging to definitively state its cost-effectiveness relative to other contract types for these specific engineering services.
What was the total cost to the government over the contract's lifespan, and how does this compare to the initial estimated value or budget?
The provided data shows an 'amount obligated' (a) of $397,295,704.13. The contract duration was from November 26, 2003, to November 30, 2014, spanning over 11 years. The 'base and all options' value (br) is listed as 98781, which seems unusually low and potentially a data entry error or placeholder. Without a clear total contract value or final expenditure, a precise comparison is impossible, but the obligated amount suggests significant spending.
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
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Address: 1111 LOCKHEED MARTIN WAY, SUNNYVALE, CA, 17
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $353,249,036
Exercised Options: $353,249,036
Current Obligation: $397,295,704
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2003-11-26
Current End Date: 2014-11-30
Potential End Date: 2014-11-30 00:00:00
Last Modified: 2014-07-07
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