DoD awards $71M Engineering Services contract to Lockheed Martin for Air Force, sole-sourced
Contract Overview
Contract Amount: $71,011,170 ($71.0M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2005-12-09
End Date: 2006-12-08
Contract Duration: 364 days
Daily Burn Rate: $195.1K/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, 94086
Plain-Language Summary
Department of Defense obligated $71.0 million to LOCKHEED MARTIN CORPORATION for work described as: Key points: 1. Significant contract value of $71 million. 2. Sole-source award to a major defense contractor. 3. Potential for cost overruns with Cost Plus Award Fee structure. 4. Engineering services sector is critical for defense modernization.
Value Assessment
Rating: questionable
The contract type is Cost Plus Award Fee, which can lead to higher costs than fixed-price contracts. Without competitive bidding, it's difficult to assess if the $71 million price is optimal.
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 may result in higher costs for the government compared to a competitive process.
Taxpayer Impact: Taxpayer funds are used for this sole-source award, potentially at a premium due to the lack of competition.
Public Impact
Air Force receives critical engineering support. Taxpayers may bear higher costs due to sole-source nature. Limited transparency on cost-effectiveness without competition.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Award Fee contract type
- Lack of competition
- Potential for cost overruns
Positive Signals
- Award to established contractor
- Addresses critical Air Force needs
Sector Analysis
This contract falls within the Engineering Services sector, which is vital for the Department of Defense's research, development, and sustainment activities. Spending in this area is typically high due to the complexity of defense systems.
Small Business Impact
The awardee is Lockheed Martin Corporation, a large prime contractor. There is no indication that small businesses were involved as subcontractors in this specific award.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny to ensure fair pricing and effective service delivery. Oversight should focus on the justification for not competing the contract.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award lacks competition.
- Cost Plus Award Fee structure can inflate costs.
- Potential for contractor to maximize profit over cost savings.
- Lack of transparency in pricing justification.
- Long-term reliance on a single provider.
Tags
engineering-services, department-of-defense, ca, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $71.0 million to LOCKHEED MARTIN CORPORATION. See the official description on USAspending.
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 $71.0 million.
What is the period of performance?
Start: 2005-12-09. End: 2006-12-08.
What was the justification for awarding this contract on a sole-source basis?
The justification for a sole-source award typically involves specific circumstances such as the unique capability of the contractor, urgent need, or lack of adequate competition. Without further documentation, the specific rationale remains unclear, but it is a key area for oversight to ensure the government's interests were protected.
How does the Cost Plus Award Fee structure impact cost control for this contract?
Cost Plus Award Fee (CPAF) contracts allow the contractor to recover all allowable costs plus a fee that is composed of a base fee and an award amount. While the award fee is intended to incentivize performance, it can also lead to higher overall costs if not carefully managed and monitored by the government. The lack of competition exacerbates this risk.
What is the long-term strategic value of this sole-source engineering support to the Air Force?
The long-term value depends on the criticality of the engineering services provided and whether Lockheed Martin possesses unique expertise essential for Air Force operations. If the services are mission-critical and no other vendor can provide them, the sole-source award might be strategically justified, though still subject to price scrutiny.
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
Parent Company: Lockheed Martin Corp (UEI: 834951691)
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: $2,475,173,326
Exercised Options: $2,283,760,047
Current Obligation: $71,011,170
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2005-12-09
Current End Date: 2006-12-08
Potential End Date: 2009-06-08 00:00:00
Last Modified: 2011-07-14
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