GSA awards $362M IT support contract to Lockheed Martin for Defense Cybercrime Center

Contract Overview

Contract Amount: $361,999,925 ($362.0M)

Contractor: Lockheed Martin Corporation

Awarding Agency: General Services Administration

Start Date: 2017-01-18

End Date: 2022-07-18

Contract Duration: 2,007 days

Daily Burn Rate: $180.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS AWARD FEE

Sector: IT

Official Description: IGF::OT::IGF THIS TASK ORDER PROVIDES MISSION SUPPORT SERVICES TO THE DOD DEFENSE CYBER CRIME CENTER. THESE SERVICES ARE PRIMARILY INFORMATION TECHNOLOGY.

Place of Performance

Location: LINTHICUM HEIGHTS, ANNE ARUNDEL County, MARYLAND, 21090

State: Maryland Government Spending

Plain-Language Summary

General Services Administration obligated $362.0 million to LOCKHEED MARTIN CORPORATION for work described as: IGF::OT::IGF THIS TASK ORDER PROVIDES MISSION SUPPORT SERVICES TO THE DOD DEFENSE CYBER CRIME CENTER. THESE SERVICES ARE PRIMARILY INFORMATION TECHNOLOGY. Key points: 1. Contract provides critical IT mission support services, aligning with national cybersecurity priorities. 2. Full and open competition suggests a robust market for these specialized IT services. 3. Potential for cost overruns exists given the Cost Plus Award Fee (CPA) structure. 4. Long-term contract duration (5.5 years) indicates a sustained need for these services. 5. Geographic concentration in Maryland may impact regional IT workforce dynamics. 6. Contractor's extensive experience in defense IT is a positive performance indicator.

Value Assessment

Rating: good

The contract value of $362 million over 5.5 years for IT mission support services to the Defense Cybercrime Center appears reasonable given the specialized nature of the work. Benchmarking against similar large-scale IT support contracts for defense agencies suggests that pricing is likely competitive, especially considering the full and open competition. The Cost Plus Award Fee (CPA) structure allows for performance incentives but also introduces a risk of costs exceeding initial estimates if not managed tightly. The total obligated amount of $180 million suggests a phased funding approach, common for long-term complex IT projects.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The presence of two bidders suggests a competitive environment, which typically drives better pricing and service offerings for the government. The fact that it was competed broadly is a positive sign for price discovery and ensures the government is receiving services from a capable provider.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that aims to secure the best value for IT mission support services, preventing potential price gouging and ensuring efficient use of public funds.

Public Impact

The primary beneficiary is the Department of Defense's Defense Cybercrime Center, which receives essential IT support to carry out its mission. Services delivered include critical IT infrastructure management, cybersecurity support, and systems design, crucial for combating cybercrime. The contract's impact is concentrated in Maryland, potentially creating or sustaining high-skilled IT jobs in the region. This contract supports the operational readiness and effectiveness of a key national security entity.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee (CPA) structure can lead to higher-than-expected costs if performance incentives are heavily awarded without strict cost controls.
Long contract duration (over 5 years) increases the risk of technology obsolescence or shifts in mission requirements that may not be fully captured in the current scope.
Concentration of services in Maryland could create a single point of failure for critical IT support if not adequately backed up.
Reliance on a single large contractor for mission-critical IT functions may limit flexibility and responsiveness to urgent, unforeseen needs.

Positive Signals

Awarded under full and open competition, indicating a competitive market and likely fair pricing.
Contractor (Lockheed Martin) has extensive experience in defense IT and cybersecurity, suggesting a high likelihood of successful performance.
The contract supports a vital national security function (Defense Cybercrime Center), aligning with government priorities.
The Cost Plus Award Fee structure incentivizes high performance, potentially leading to superior service delivery.
The contract duration provides stability and predictability for essential IT services.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on computer systems design and related services. The IT services market for the federal government is substantial, with significant spending allocated to cybersecurity, cloud computing, and IT infrastructure modernization. This contract represents a portion of the broader defense IT spending, which is a major segment of the federal IT market. Comparable spending benchmarks for large-scale IT support contracts within the Department of Defense often run into hundreds of millions of dollars over several years, reflecting the complexity and criticality of these services.

Small Business Impact

This contract was not set aside for small businesses and the data indicates no small business subcontracting goals were specified (sb: false). This means the primary contract was competed broadly, likely favoring large, established defense contractors. While there are no explicit set-asides, the prime contractor, Lockheed Martin, may engage small businesses for subcontracting opportunities as part of their overall business strategy, but this is not a mandated requirement of this specific award. The lack of a small business set-aside means direct opportunities for small businesses to prime this contract were limited.

Oversight & Accountability

Oversight for this contract is likely managed by the General Services Administration (GSA) Federal Acquisition Service, in coordination with the Department of Defense (DoD) end-user. The Cost Plus Award Fee (CPA) structure necessitates robust oversight to ensure costs are reasonable and award fees are justified based on performance metrics. Transparency is generally maintained through contract reporting mechanisms, though specific performance details and cost breakdowns may be sensitive. Inspector General jurisdiction would typically extend to investigating fraud, waste, and abuse related to this contract.

Related Government Programs

DoD Cybercrime Prevention Programs
Federal Cybersecurity Initiatives
IT Infrastructure Modernization Contracts
Defense Information Systems Agency (DISA) Contracts
General Services Administration (GSA) IT Schedule Contracts

Risk Flags

Cost Plus Award Fee (CPA) structure requires diligent oversight to manage costs.
Long contract duration may lead to technology obsolescence or changing requirements.
Concentration of services in a single geographic location (Maryland) could pose risks.
Potential for contractor performance issues over an extended period.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $362.0 million to LOCKHEED MARTIN CORPORATION. IGF::OT::IGF THIS TASK ORDER PROVIDES MISSION SUPPORT SERVICES TO THE DOD DEFENSE CYBER CRIME CENTER. THESE SERVICES ARE PRIMARILY INFORMATION TECHNOLOGY.

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORPORATION.

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $362.0 million.

What is the period of performance?

Start: 2017-01-18. End: 2022-07-18.

What is Lockheed Martin's track record with similar IT support contracts for the Department of Defense?

Lockheed Martin Corporation is a major defense contractor with extensive experience providing IT and mission support services to various branches of the Department of Defense. They have a long history of managing complex, large-scale IT programs, including cybersecurity, systems integration, and operational support. Their track record includes numerous contracts similar in scope and value to this one, often involving sensitive national security systems. While specific performance metrics for past contracts are not detailed here, their consistent selection for high-value defense IT contracts suggests a generally positive performance history and capability to meet demanding requirements. However, like any large contractor, they may have faced scrutiny or challenges on specific projects, which would require deeper investigation into individual contract performance reports and IG findings.

How does the Cost Plus Award Fee (CPA) structure compare to other contract types for IT services?

The Cost Plus Award Fee (CPA) contract type is a hybrid that allows the contractor to recover all allowable costs plus an award fee that is based on performance against pre-defined criteria. This differs from fixed-price contracts, where the price is set regardless of costs incurred, and cost-reimbursement contracts (like Cost Plus Fixed Fee or Cost Plus Incentive Fee) which have different incentive structures. CPA is often used when performance requirements are difficult to define precisely upfront or when innovation and high quality are paramount, such as in complex IT or R&D projects. The advantage is incentivizing superior performance. However, it carries a higher risk of cost growth for the government compared to fixed-price contracts, as the final profit (award fee) is variable and dependent on meeting or exceeding performance targets. Effective oversight is crucial to manage costs and ensure award fees are genuinely earned.

What are the primary risks associated with this contract's duration and scope?

The primary risks associated with this contract's duration (over 5 years) and scope (mission support services for the Defense Cybercrime Center) include technological obsolescence, shifting mission requirements, and potential contractor performance degradation over time. Technology evolves rapidly in the IT sector; a 5-year contract could see the supported systems or required skills become outdated. Mission requirements for defense agencies can also change due to evolving threats or strategic shifts, potentially making the contracted services less relevant or requiring costly modifications. Furthermore, long-term contracts can sometimes lead to complacency or reduced focus on efficiency by the contractor. Mitigating these risks requires robust contract management, regular reviews of performance and relevance, and clear mechanisms for contract modification or termination if necessary.

How does this contract's value compare to overall federal IT spending?

This contract's value of approximately $362 million represents a significant investment in IT mission support services for a specific defense agency. However, when compared to the overall federal IT spending, it is a relatively small fraction. Federal IT spending typically runs into the tens of billions of dollars annually across all agencies. For example, in recent fiscal years, federal IT spending has exceeded $100 billion. Therefore, while substantial for the Defense Cybercrime Center and Lockheed Martin, this single contract constitutes a minor portion of the total government-wide IT expenditure. It highlights the significant investment in specialized IT capabilities for national security functions within the broader federal IT landscape.

What are the implications of awarding this contract under full and open competition?

Awarding this contract under full and open competition has several positive implications. Firstly, it suggests that the government sought the widest possible pool of qualified vendors, increasing the likelihood of receiving competitive proposals and achieving the best possible price and technical solution. Secondly, it implies that the market for these specialized IT services is robust enough to support multiple capable bidders, reducing concerns about contractor monopolies or limited choices. Thirdly, it generally leads to greater transparency in the procurement process. For taxpayers, this means their money is more likely to be spent efficiently, as competition drives down costs and encourages innovation. It also ensures that the selected contractor, Lockheed Martin, had to demonstrate superior capabilities and value to win against potential rivals.

Are there any specific performance metrics or award fee criteria publicly available for this contract?

Specific performance metrics and award fee criteria for this contract are generally not made publicly available in detail. Contract details like these are often considered sensitive or proprietary information related to the government's operational needs and the contractor's performance management. While the contract type (CPA) indicates that performance is measured against defined criteria to determine award fees, the exact metrics (e.g., system uptime percentages, response times for cyber incidents, project completion rates) and their associated fee structures are typically found in the contract's Performance Work Statement (PWS) and the Award Fee Plan. These documents are usually internal to the contracting agency and the contractor, though summaries of performance outcomes might be included in broader contract performance reports or agency oversight reviews.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 9500 GODWIN DR, MANASSAS, VA, 20110

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

Financial Breakdown

Contract Ceiling: $384,220,397

Exercised Options: $384,220,397

Current Obligation: $361,999,925

Actual Outlays: $-886,006

Subaward Activity

Number of Subawards: 793

Total Subaward Amount: $1,174,871,938

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q09BGD0011

IDV Type: GWAC

Timeline