Lockheed Martin awarded $170.6M IT support contract for CENTCOM by GSA

Contract Overview

Contract Amount: $170,629,709 ($170.6M)

Contractor: Lockheed Martin Services, LLC

Awarding Agency: General Services Administration

Start Date: 2004-08-31

End Date: 2007-08-31

Contract Duration: 1,095 days

Daily Burn Rate: $155.8K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 2

Pricing Type: COST PLUS AWARD FEE

Sector: IT

Official Description: IT SUPPORT TO CENTCOM

Place of Performance

Location: ALEXANDRIA, FAIRFAX County, VIRGINIA, 22310, UNITED STATES OF AMERICA

State: Virginia Government Spending

Plain-Language Summary

General Services Administration obligated $170.6 million to LOCKHEED MARTIN SERVICES, LLC for work described as: IT SUPPORT TO CENTCOM Key points: 1. Contract value represents a significant investment in IT infrastructure for a major combatant command. 2. The use of a Cost Plus Award Fee (CPAF) contract type suggests a need for flexibility and performance incentives. 3. The duration of the contract (1095 days) indicates a long-term need for these IT services. 4. This contract was awarded as a competitive delivery order, implying multiple bids were considered. 5. The specific NAICS code (541512) points to a focus on computer systems design services. 6. The contract was awarded by the General Services Administration (GSA), a common vehicle for IT procurement. 7. The awardee, Lockheed Martin Services, LLC, is a major defense contractor with extensive experience.

Value Assessment

Rating: good

The contract value of $170.6 million over three years for IT support to CENTCOM appears to be within a reasonable range for the scope of services. Benchmarking against similar large-scale IT support contracts for military commands suggests that the pricing structure, while a Cost Plus Award Fee (CPAF), is typical for complex, performance-driven requirements. The specific unit costs are not provided, making a direct per-unit comparison difficult, but the overall award value aligns with industry standards for comprehensive IT system design and support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded as a competitive delivery order, indicating that it was competed under a broader contract vehicle where multiple vendors could bid. While the exact number of bidders for this specific delivery order is not detailed, the 'full-and-open' competition designation suggests a robust bidding process. This level of competition is generally expected to drive better pricing and service offerings as contractors vie for the award.

Taxpayer Impact: A full and open competition for a contract of this magnitude is beneficial for taxpayers as it increases the likelihood of securing the best value and competitive pricing for essential IT services supporting national security operations.

Public Impact

Provides critical IT infrastructure and support services to the U.S. Central Command (CENTCOM), enabling its operational capabilities. Ensures the continuity and effectiveness of communication and information systems for military personnel operating in the CENTCOM area of responsibility. Supports the technological backbone necessary for intelligence, surveillance, reconnaissance, and operational planning. Indirectly benefits the workforce by providing the tools and systems needed to perform their duties efficiently and securely. The geographic impact is global, focusing on the CENTCOM AOR, but the IT infrastructure supported is likely centralized and distributed.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Award Fee (CPAF) structure can lead to cost overruns if not carefully managed and monitored, as contractor incentives are tied to performance rather than strict cost control.
Reliance on a single large contractor like Lockheed Martin for critical IT infrastructure could pose risks if performance issues arise or if the contractor's priorities shift.
The complexity of IT systems and the evolving threat landscape present ongoing challenges for maintaining security and operational effectiveness.

Positive Signals

Awarded through a competitive process, suggesting a strong likelihood of receiving competitive pricing and quality services.
The contractor, Lockheed Martin, has a proven track record in providing complex IT solutions and support to government agencies, including defense.
The contract's duration indicates a stable, long-term requirement, allowing for focused development and support of CENTCOM's IT needs.
The General Services Administration (GSA) is managing the procurement, which typically involves established processes and oversight for IT services.

Sector Analysis

This contract falls within the Information Technology sector, specifically Computer Systems Design Services. The federal IT market is vast, with significant spending allocated to maintaining and upgrading complex systems for defense and intelligence agencies. Contracts like this are crucial for ensuring the operational readiness and technological superiority of combatant commands. Comparable spending benchmarks for large-scale IT support contracts for military operations often run into hundreds of millions of dollars over several years, reflecting the critical nature and complexity of the services required.

Small Business Impact

This contract does not appear to have a specific small business set-aside component, as indicated by 'sb': false. The awardee is a large prime contractor. However, large prime contractors are often required to meet subcontracting goals for small businesses as part of their overall contract obligations. The extent to which Lockheed Martin will utilize small businesses for subcontracting on this specific delivery order is not detailed here, but it is a common practice in the federal contracting ecosystem to ensure small business participation.

Oversight & Accountability

The General Services Administration (GSA) typically provides oversight for contracts awarded through their vehicles. Oversight mechanisms would likely include regular performance reviews, financial audits, and adherence to contract terms. The Cost Plus Award Fee (CPAF) structure necessitates close monitoring of performance metrics and costs to ensure value for money. Transparency is generally maintained through contract reporting requirements, though specific details of performance and cost may be sensitive for national security reasons.

Related Government Programs

DoD IT Modernization Programs
CENTCOM Operations Support
GSA IT Schedule Contracts
Defense Information Systems Agency (DISA) Services
Cybersecurity Support Contracts

Risk Flags

Potential for cost overruns due to CPAF structure
Over-reliance on a single large contractor
Cybersecurity risks inherent in IT support contracts
Performance degradation impacting operational readiness

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $170.6 million to LOCKHEED MARTIN SERVICES, LLC. IT SUPPORT TO CENTCOM

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN SERVICES, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $170.6 million.

What is the period of performance?

Start: 2004-08-31. End: 2007-08-31.

What is Lockheed Martin's track record with similar IT support contracts for defense agencies?

Lockheed Martin Services, LLC, a subsidiary of Lockheed Martin Corporation, has an extensive and well-documented track record of providing complex IT, systems integration, and support services to various U.S. Department of Defense (DoD) agencies and other federal entities. They are a major defense contractor with significant experience in managing large-scale, mission-critical IT infrastructure, including network operations, cybersecurity, software development, and systems engineering. Their history includes numerous prime contracts for supporting command and control systems, intelligence platforms, and logistical IT solutions, often involving high levels of security and operational tempo. This experience suggests a strong capability to meet the demanding requirements of supporting CENTCOM's IT needs.

How does the $170.6 million contract value compare to other IT support contracts for similar military commands?

The $170.6 million contract value for three years of IT support to CENTCOM is substantial but falls within the expected range for large-scale, mission-critical IT services supporting a major combatant command. Contracts for similar services to other geographic combatant commands (e.g., INDOPACOM, EUCOM) or major military branches often range from tens to hundreds of millions of dollars over similar or longer durations. Factors influencing this value include the complexity of the systems, the number of users supported, the geographic scope, and the required security levels. Given the strategic importance and operational tempo of CENTCOM, this award value appears commensurate with the scope and criticality of the IT support required.

What are the primary risks associated with a Cost Plus Award Fee (CPAF) contract for IT services?

The primary risks associated with a Cost Plus Award Fee (CPAF) contract for IT services revolve around cost control and performance management. In a CPAF structure, the contractor is reimbursed for allowable costs plus a fee that consists of a fixed base amount and an award amount tied to achieving specific performance objectives. The risk for the government is that the contractor may have less incentive to control costs rigorously compared to fixed-price contracts, as cost overruns are generally reimbursable. The award fee component aims to mitigate this by incentivizing performance, but it requires robust government oversight to define clear, measurable performance metrics and to objectively assess whether award fees are earned. Inadequate oversight or poorly defined metrics can lead to higher-than-expected costs without commensurate improvements in service quality or effectiveness.

How effective is the GSA in managing IT procurements for agencies like CENTCOM?

The General Services Administration (GSA) is a primary channel for federal IT procurement and generally possesses significant expertise in managing complex IT contracts. GSA's Federal Acquisition Service (FAS) offers a wide range of IT solutions through its Multiple Award Schedules (MAS) and other contract vehicles, designed to streamline procurement for federal agencies. GSA's role in managing this contract, likely through a competitive delivery order against an existing GSA schedule, suggests adherence to established procurement regulations and best practices. While GSA aims for efficiency and value, the effectiveness of oversight can vary depending on the specific contract, the contracting officers' expertise, and the level of engagement from the requiring agency (CENTCOM in this case). Overall, GSA's involvement provides a structured framework for procurement and contract administration.

What are the historical spending patterns for IT support within CENTCOM or similar commands?

Historical spending patterns for IT support within CENTCOM and comparable military commands typically show a consistent and significant allocation of resources. These expenditures are driven by the constant need to maintain, upgrade, and secure complex communication and information systems essential for global military operations. Spending often increases during periods of heightened operational activity or when major technology refreshes are undertaken. Over the past decade, federal IT spending, particularly within the Department of Defense, has remained substantial, often comprising a significant portion of agency budgets. Contracts for IT support, network operations, and cybersecurity are recurring requirements, reflecting the enduring reliance on robust IT infrastructure for command, control, and intelligence functions.

What are the implications of using a single large contractor like Lockheed Martin for critical IT infrastructure?

Utilizing a single large contractor like Lockheed Martin for critical IT infrastructure presents both advantages and potential risks. On the positive side, large contractors possess the resources, expertise, and established processes to manage complex, large-scale projects effectively. They can often provide a comprehensive suite of services, ensuring seamless integration and a single point of accountability. However, reliance on a sole prime contractor can also introduce risks. These include potential vendor lock-in, reduced flexibility in adapting to new technologies or changing requirements if the contractor's capabilities are limited, and the potential impact of performance issues or financial instability on critical operations. Furthermore, a single large contractor may have less incentive to innovate aggressively or to subcontract with smaller, specialized firms if not contractually mandated.

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: COMPETITIVE DELIVERY ORDER

Offers Received: 2

Pricing Type: COST PLUS AWARD FEE (R)

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 700 N FREDERICK AVE, GAITHERSBURG, MD, 20879

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $202,627,315

Exercised Options: $170,629,709

Current Obligation: $170,629,709

Parent Contract

Parent Award PIID: GS00T99ALD0205

IDV Type: GWAC

Timeline