DoD awards $19.5M for high-frequency maintenance, with Lockheed Martin selected for engineering services

Contract Overview

Contract Amount: $19,449,861 ($19.4M)

Contractor: Lockheed Martin Corp

Awarding Agency: Department of Defense

Start Date: 2023-06-26

End Date: 2025-10-31

Contract Duration: 858 days

Daily Burn Rate: $22.7K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: PERFECTIVE AND ADAPTIVE ADVANCED EXTREMELY HIGH FREQUENCY MAINTENANCE SOLUTIONS PHASE 1

Place of Performance

Location: LITTLETON, DOUGLAS County, COLORADO, 80125

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $19.4 million to LOCKHEED MARTIN CORP for work described as: PERFECTIVE AND ADAPTIVE ADVANCED EXTREMELY HIGH FREQUENCY MAINTENANCE SOLUTIONS PHASE 1 Key points: 1. Contract awarded to a single, large defense contractor, raising questions about competition. 2. The contract type (Cost Plus Fixed Fee) can lead to cost overruns if not managed tightly. 3. Long performance period (over 2 years) suggests a complex or ongoing need. 4. Focus on 'advanced extremely high frequency maintenance' indicates a specialized, critical capability. 5. Lack of small business participation noted, potentially limiting broader economic impact. 6. Geographic concentration in Colorado for this specific award.

Value Assessment

Rating: fair

The contract value of $19.5 million for engineering services appears moderate for a defense contract of this nature. Benchmarking against similar contracts for advanced maintenance solutions is difficult without more specific service details. The Cost Plus Fixed Fee (CPFF) pricing structure, while common for complex R&D or services where costs are uncertain, carries inherent risks of exceeding initial estimates. Without a competitive bidding process, it's challenging to definitively assess if the pricing represents optimal value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor, Lockheed Martin Corp., was solicited. This approach is typically used when a unique capability or proprietary technology is required, or in cases of urgent need where competition is not feasible. The lack of competition means there was no opportunity for price discovery through multiple bids, potentially leading to a higher price than if multiple firms had competed.

Taxpayer Impact: Sole-source awards limit opportunities for other businesses to secure federal contracts and may result in taxpayers paying a premium due to the absence of competitive pressure on pricing.

Public Impact

The Department of the Air Force benefits from specialized maintenance solutions for high-frequency systems. Lockheed Martin Corp. is the primary beneficiary, receiving a significant contract award. Services are likely to support critical defense infrastructure and operational readiness. Workforce implications may include specialized engineering and technical roles within Lockheed Martin. Geographic impact is concentrated in Colorado, where the services will be performed.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and potential cost savings.
Cost Plus Fixed Fee contract type can incentivize higher spending if not closely monitored.
Lack of small business involvement means missed opportunities for economic diversification.
Long contract duration increases exposure to potential cost escalations over time.

Positive Signals

Award to a prime contractor with extensive experience in defense systems.
Focus on advanced high-frequency maintenance addresses a critical defense capability.
Clear performance period provides a defined scope for service delivery.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting advanced defense systems. The market for specialized defense maintenance and engineering is dominated by large, established contractors like Lockheed Martin. Spending in this niche is driven by the need for maintaining complex, high-value military assets. Comparable benchmarks would involve other contracts for specialized engineering support for advanced communication or radar systems within the DoD.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for them mentioned in the provided data. The award to a large prime contractor like Lockheed Martin suggests that the primary focus is on leveraging established capabilities. This approach may limit opportunities for small businesses to participate in this specific contract, although they might be involved further down the supply chain.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Air Force contracting and program management offices. Given the sole-source nature and CPFF structure, rigorous oversight of cost, performance, and schedule will be crucial. Transparency may be limited due to the non-competitive award, but contract performance reviews and financial audits are standard accountability measures. The Inspector General's office would have jurisdiction for investigating fraud, waste, or abuse.

Related Government Programs

DoD Advanced Technology Development Programs
Air Force Command and Control Systems Maintenance
Defense Communication Systems Engineering Support
High-Frequency Electronics Research and Development

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Potential for cost overruns
Limited small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.4 million to LOCKHEED MARTIN CORP. PERFECTIVE AND ADAPTIVE ADVANCED EXTREMELY HIGH FREQUENCY MAINTENANCE SOLUTIONS PHASE 1

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 $19.4 million.

What is the period of performance?

Start: 2023-06-26. End: 2025-10-31.

What is Lockheed Martin's track record with similar sole-source, cost-plus contracts for the Department of Defense?

Lockheed Martin Corp. has a long history of securing large, sole-source, and cost-plus contracts with the Department of Defense across various platforms and services. Their extensive experience in defense systems often positions them as a preferred or sole provider for highly specialized or technologically advanced requirements. Analyzing their past performance on similar contracts would involve reviewing metrics such as cost overruns, schedule adherence, and the successful delivery of technical capabilities. While their extensive experience suggests a high likelihood of technical success, the cost-plus nature necessitates diligent oversight to ensure value for taxpayer dollars, as cost efficiencies may not be as strongly incentivized as in fixed-price contracts.

How does the $19.5 million value compare to other engineering services contracts for advanced maintenance solutions?

The $19.5 million award value for 'PERFECTIVE AND ADAPTIVE ADVANCED EXTREMELY HIGH FREQUENCY MAINTENANCE SOLUTIONS PHASE 1' is within a typical range for specialized engineering services supporting complex defense systems. However, without specific details on the scope of 'maintenance solutions' and the 'extremely high frequency' aspect, direct comparisons are challenging. Contracts for R&D, system integration, or sustainment of advanced electronic warfare or communication systems can range from millions to billions of dollars. Given this is Phase 1, it suggests a foundational or initial stage, making the value moderate. Larger, multi-year sustainment contracts for similar systems would likely exceed this amount significantly.

What are the primary risks associated with a sole-source, Cost Plus Fixed Fee (CPFF) contract structure for this type of service?

The primary risks associated with a sole-source, CPFF contract are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher costs than if multiple bidders had vied for the contract. There's less incentive for the contractor to aggressively seek cost efficiencies. Secondly, the CPFF structure, while providing flexibility for uncertain costs, can incentivize the contractor to incur more costs to increase the fixed fee earned (though the fee is fixed, it's a percentage of the costs). This requires robust government oversight to monitor expenditures, ensure work is necessary, and prevent scope creep. Without strong program management and auditing, costs can escalate beyond initial projections.

What does the lack of competition imply for the effectiveness and innovation of the maintenance solutions?

The lack of competition in a sole-source award can have mixed implications for effectiveness and innovation. On one hand, awarding to a single, experienced contractor like Lockheed Martin ensures continuity and leverages their deep institutional knowledge of specific defense systems, potentially leading to effective and reliable maintenance. On the other hand, the absence of competitive pressure might reduce the incentive for the contractor to pursue breakthrough innovations or highly cost-effective solutions that might be explored by multiple competing firms. Innovation might be driven more by internal R&D or specific contract requirements rather than market-driven competition.

How has federal spending on 'Engineering Services' (NAICS 541330) for defense-related maintenance evolved, and where does this contract fit?

Federal spending on Engineering Services (NAICS 541330) for defense-related maintenance has historically been substantial, driven by the complexity and lifecycle requirements of military assets. This sector often sees significant investment in areas like aerospace, naval, and ground systems engineering. This specific $19.5 million contract for high-frequency maintenance solutions fits within this broader category, representing a focused investment in a specialized technological area. While overall defense engineering spending fluctuates based on geopolitical factors and budget priorities, contracts like this highlight the continuous need for specialized support to maintain cutting-edge defense capabilities, ensuring operational readiness and technological superiority.

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: $19,449,861

Exercised Options: $19,449,861

Current Obligation: $19,449,861

Subaward Activity

Number of Subawards: 45

Total Subaward Amount: $12,049,835

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