DoD's $20.1M Lockheed Martin cybersecurity contract awarded without competition, raising value-for-money questions

Contract Overview

Contract Amount: $20,161,079 ($20.2M)

Contractor: Lockheed Martin Corp

Awarding Agency: Department of Defense

Start Date: 2022-03-31

End Date: 2023-06-28

Contract Duration: 454 days

Daily Burn Rate: $44.4K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ADVANCED EXTREMELY HIGH FREQUENCY MISSION CONTROL SEGMENT CYBERSECURITY DEFENSE IN DEPTH PHASE I ENHANCEMENTS

Place of Performance

Location: LITTLETON, DOUGLAS County, COLORADO, 80125

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $20.2 million to LOCKHEED MARTIN CORP for work described as: ADVANCED EXTREMELY HIGH FREQUENCY MISSION CONTROL SEGMENT CYBERSECURITY DEFENSE IN DEPTH PHASE I ENHANCEMENTS Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The 'NOT COMPETED' award type suggests a lack of market research or a specific justification for bypassing competition. 3. The contract's duration of 454 days for engineering services warrants scrutiny regarding project scope and efficiency. 4. Cybersecurity defense enhancements are critical, but the absence of competition raises concerns about optimal resource allocation. 5. The cost-plus-fixed-fee (CPFF) pricing structure can incentivize cost overruns, especially without competitive pressure. 6. Performance context is limited, but the focus on 'ADVANCED EXTREMELY HIGH FREQUENCY MISSION CONTROL SEGMENT' indicates a specialized and high-stakes area.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source contract is challenging without comparable bids. The CPFF structure, while offering flexibility, can lead to higher costs compared to fixed-price contracts, especially when competition is absent. The $20.1 million award for 454 days of engineering services requires careful monitoring to ensure costs remain reasonable and aligned with the delivered value. Without competitive data, it's difficult to definitively assess if the government received the best possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicated by 'NOT COMPETED'. This means the Department of Defense did not solicit bids from multiple vendors. Such awards are typically justified by specific circumstances, such as the unique capabilities of a single provider or urgent needs. The lack of competition limits the government's ability to leverage market forces to achieve the lowest possible price and potentially overlooks innovative solutions from other qualified companies.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. Without competing offers, there is less assurance that the selected contractor's pricing reflects the most cost-effective solution available in the market.

Public Impact

The primary beneficiary is the Department of Defense, which receives enhanced cybersecurity for its advanced extremely high frequency mission control segment. Services delivered include engineering for cybersecurity defense-in-depth phase I enhancements. The geographic impact is likely concentrated within the operational areas of the DoD's mission control segment, potentially in Colorado where the contractor is located. Workforce implications include specialized cybersecurity engineers and technical staff employed by Lockheed Martin.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially leading to higher costs for taxpayers.
Cost-plus-fixed-fee contract type can incentivize increased spending without robust oversight.
Lack of transparency in the justification for not competing the contract.
The specific nature of 'ADVANCED EXTREMELY HIGH FREQUENCY MISSION CONTROL SEGMENT CYBERSECURITY' may create barriers to entry for other potential bidders.

Positive Signals

Focus on critical cybersecurity enhancements for a high-value DoD asset.
Contract awarded to a large, established defense contractor with a known track record.
The contract aims to improve the defense-in-depth posture, a crucial security strategy.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense and cybersecurity initiatives. The market for defense cybersecurity is substantial, driven by increasing threats to national security infrastructure. Comparable spending benchmarks are difficult to establish precisely due to the specialized nature of the mission control segment and the sole-source award. However, significant government investment is consistently allocated to maintaining and enhancing the cybersecurity of critical defense systems.

Small Business Impact

This contract does not appear to involve small business set-asides, as indicated by 'sb': false. Lockheed Martin is a large prime contractor. There is no explicit information regarding subcontracting plans for small businesses within this specific award. The absence of a small business focus in this sole-source contract means direct opportunities for small businesses to participate in this particular project are unlikely, though they may be involved in Lockheed Martin's broader supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are inherent in the CPFF structure, requiring detailed cost reporting and justification. Transparency is limited due to the sole-source nature of the award, as the justification for not competing is not publicly detailed. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

DoD Cybersecurity Modernization Programs
Advanced Extremely High Frequency (AEHF) Satellite Program
Mission Control Systems Engineering
Defense Information Systems Agency (DISA) Contracts

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Lack of competitive bidding justification
Critical infrastructure cybersecurity

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.2 million to LOCKHEED MARTIN CORP. ADVANCED EXTREMELY HIGH FREQUENCY MISSION CONTROL SEGMENT CYBERSECURITY DEFENSE IN DEPTH PHASE I ENHANCEMENTS

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $20.2 million.

What is the period of performance?

Start: 2022-03-31. End: 2023-06-28.

What is Lockheed Martin's track record with similar DoD cybersecurity contracts?

Lockheed Martin is a major defense contractor with extensive experience in cybersecurity and complex systems integration for the Department of Defense. They have a long history of supporting critical defense programs, including satellite communications and command and control systems. While specific details on past cybersecurity contracts for the AEHF program are not provided here, Lockheed Martin's overall portfolio includes numerous large-scale cybersecurity initiatives, ranging from network defense to threat intelligence and secure software development. Their performance on these contracts is generally monitored by the DoD, with past performance reviews influencing future awards. However, the success and value derived from any specific contract depend heavily on its scope, execution, and the specific metrics used for evaluation.

How does the $20.1 million cost compare to similar cybersecurity engineering efforts?

Directly comparing the $20.1 million cost is challenging without knowing the precise scope, duration, and specific deliverables of the 'phase I enhancements.' Cybersecurity engineering services can vary widely in price based on complexity, required expertise, and the criticality of the system being protected. Given this contract is for 'ADVANCED EXTREMELY HIGH FREQUENCY MISSION CONTROL SEGMENT CYBERSECURITY DEFENSE IN DEPTH PHASE I ENHANCEMENTS' and awarded sole-source, the price may reflect specialized knowledge and a lack of competitive pressure. Typically, sole-source contracts and those with CPFF structures can be more expensive than competitively bid, fixed-price contracts. A more thorough value assessment would require benchmarking against internal DoD cost estimates or similar sole-source procurements for comparable systems, which are not publicly available.

What are the primary risks associated with a sole-source award for critical cybersecurity?

The primary risks associated with a sole-source award for critical cybersecurity include: 1) Higher Costs: Without competition, the government may pay more than necessary. 2) Limited Innovation: The government misses out on potentially better or more cost-effective solutions that other companies might offer. 3) Vendor Lock-in: Reliance on a single provider can make future transitions or upgrades more difficult and expensive. 4) Reduced Accountability: While performance is still monitored, the lack of competitive alternatives can sometimes lessen the contractor's incentive to be exceptionally efficient or proactive. For critical systems like the AEHF mission control, ensuring robust security is paramount, but the procurement method itself introduces financial and strategic risks that require careful management and justification.

What is the expected effectiveness of 'Defense in Depth Phase I Enhancements' in this context?

The 'Defense in Depth' strategy involves implementing multiple layers of security controls to protect information systems. 'Phase I Enhancements' suggests the initial stage of improving these layered defenses for the Advanced Extremely High Frequency (AEHF) Mission Control Segment. The expected effectiveness hinges on the specific nature of the enhancements, such as strengthening network perimeters, improving intrusion detection and prevention, enhancing data encryption, and bolstering access controls. Given the critical nature of the AEHF system for military communications, these enhancements are likely aimed at mitigating known vulnerabilities and adapting to evolving cyber threats. The success will be measured by the contractor's ability to implement these measures effectively and the subsequent reduction in the system's attack surface and susceptibility to breaches.

How has DoD spending on cybersecurity engineering services evolved?

DoD spending on cybersecurity engineering services has seen a significant and consistent increase over the past decade, driven by the escalating cyber threat landscape and the increasing reliance on digital systems for military operations. This includes investments in threat detection, network security, data protection, secure software development, and specialized engineering support for complex weapon systems and infrastructure. The trend reflects a strategic shift towards proactive cyber defense and resilience. While specific figures fluctuate annually based on budget allocations and emerging needs, the overall trajectory indicates a sustained and growing commitment to bolstering cybersecurity capabilities across all branches of the military. This particular contract represents a component of that broader, 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: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 12257 S WADSWORTH BLVD, LITTLETON, CO, 80125

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

Financial Breakdown

Contract Ceiling: $25,161,073

Exercised Options: $25,161,073

Current Obligation: $20,161,079

Actual Outlays: $1,372,319

Subaward Activity

Number of Subawards: 18

Total Subaward Amount: $2,139,971

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA882320D0001

IDV Type: IDC

Timeline