Lockheed Martin awarded $73.3M for miscellaneous communication equipment, a sole-source contract spanning six years

Contract Overview

Contract Amount: $73,270,017 ($73.3M)

Contractor: Lockheed Martin Corporation

Awarding Agency: General Services Administration

Start Date: 2004-09-01

End Date: 2010-09-30

Contract Duration: 2,220 days

Daily Burn Rate: $33.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: MISC COMMUNICATION EQUIP - CORRECTED CONTRACT # GS00T04SJC0140

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20407

State: District of Columbia Government Spending

Plain-Language Summary

General Services Administration obligated $73.3 million to LOCKHEED MARTIN CORPORATION for work described as: MISC COMMUNICATION EQUIP - CORRECTED CONTRACT # GS00T04SJC0140 Key points: 1. Contract awarded on a cost-plus-award-fee basis, allowing for flexibility but potentially higher costs. 2. Sole-source award indicates a lack of competition, raising questions about price discovery. 3. Contract duration of 2220 days (approx. 6 years) suggests a long-term need for these services. 4. The contract's primary purpose is for miscellaneous communication equipment, a broad category. 5. Awarded by the General Services Administration (GSA), a major federal procurement agency. 6. The North American Industry Classification System (NAICS) code 541519 suggests IT-related services.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the broad category of 'miscellaneous communication equipment.' Without competitive bids, it's difficult to assess if the pricing reflects fair market value. The cost-plus-award-fee structure means actual costs could exceed initial estimates, with the award fee component incentivizing performance but also adding to the total expenditure. Further analysis would require understanding the specific deliverables and comparing them to similar, competitively procured contracts if available.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when only one vendor possesses the necessary capabilities, or in situations where urgency or specific circumstances preclude a competitive process. The lack of competition means there were no other bidders to compare against, potentially limiting the government's ability to secure the most favorable pricing and terms.

Taxpayer Impact: Taxpayers may not have received the best possible price due to the absence of competitive pressure. The government's negotiating position is weakened without alternative offers.

Public Impact

The primary beneficiary is likely the U.S. federal government, which receives the communication equipment and related services. Services delivered are related to miscellaneous communication equipment, which could encompass a wide range of technologies and support. The geographic impact is centered in the District of Columbia, where the contract is managed and likely services are delivered. Workforce implications could involve Lockheed Martin employees supporting this contract, potentially in technical, logistical, or support roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially value for money.
Cost-plus-award-fee structure can lead to cost overruns if not managed carefully.
Broad 'miscellaneous communication equipment' category lacks specificity, making performance and cost assessment difficult.
Long contract duration (6 years) increases exposure to technological obsolescence or changing requirements.

Positive Signals

Award fee mechanism incentivizes contractor performance.
GSA manages the contract, suggesting adherence to established federal procurement processes.
Lockheed Martin is a large, established defense contractor with significant resources and experience.

Sector Analysis

The Information Technology and Communications sector is vast, with significant government spending on equipment and services. This contract falls under the broader IT services category, specifically related to communication hardware and potentially associated support. The market for such equipment is competitive, but specialized or integrated solutions can sometimes lead to sole-source awards. Benchmarking requires identifying specific communication technologies and comparing costs against similar government or commercial procurements.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the prime contractor, Lockheed Martin, is a large corporation, suggesting that subcontracting opportunities for small businesses might be limited or dependent on specific project needs. The absence of a set-aside means that small businesses were not specifically targeted for this procurement.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration (GSA), specifically the Federal Acquisition Service. As a cost-plus-award-fee contract, GSA contracting officers would be responsible for monitoring costs, evaluating performance against award criteria, and approving award fees. Transparency is generally maintained through federal procurement databases, but the specifics of cost and performance are often detailed in contract administration records, which may not be fully public.

Related Government Programs

Federal Information Technology, Communications, and Equipment Procurement
General Services Administration Schedules
Defense Communications Systems
IT Services Contracts

Risk Flags

Sole-source award
Cost-plus-award-fee contract type
Broadly defined scope of work ('miscellaneous communication equipment')
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $73.3 million to LOCKHEED MARTIN CORPORATION. MISC COMMUNICATION EQUIP - CORRECTED CONTRACT # GS00T04SJC0140

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 $73.3 million.

What is the period of performance?

Start: 2004-09-01. End: 2010-09-30.

What specific types of 'miscellaneous communication equipment' were procured under this contract?

The provided data does not specify the exact types of 'miscellaneous communication equipment.' This broad categorization suggests the contract could cover a wide array of items, potentially including radios, satellite communication devices, network hardware, specialized telephony, or other communication-related technologies. Without further details from the contract's statement of work or associated documentation, it is impossible to determine the precise nature of the equipment. This lack of specificity makes it difficult to assess the appropriateness of the cost and the contractor's performance against defined technical requirements.

How does the cost-plus-award-fee (CPAF) structure typically impact final contract costs compared to fixed-price contracts?

The Cost-Plus-Award-Fee (CPAF) structure allows the contractor to recover all allowable costs plus a fixed fee, which is then adjusted upward or downward based on performance against pre-defined criteria (the award fee). This structure is often used when the scope of work is not precisely defined or when innovation and performance are critical. Compared to fixed-price contracts, CPAF generally offers less cost certainty for the government, as the final price is not fixed upfront and can increase if performance targets are met or exceeded. While it incentivizes performance, it also carries a higher risk of cost overrun if not meticulously managed and overseen by the contracting agency.

What are the potential risks associated with a sole-source award for communication equipment?

Sole-source awards for communication equipment carry several risks. Primarily, the absence of competition means the government likely pays a higher price than it would in a competitive environment, as there is no pressure on the contractor to offer the lowest possible bid. Secondly, it limits the government's ability to explore alternative solutions or technologies that might be offered by other vendors. This can lead to suboptimal choices or reliance on a single vendor, potentially creating long-term dependencies. Lastly, without competitive benchmarking, it's harder to ensure the equipment meets the best value standard for taxpayers.

Given the contract's start date in 2004, how might technological advancements have impacted the value of this equipment over its six-year duration?

A contract spanning from 2004 to 2010 for communication equipment would have been significantly impacted by rapid technological advancements during that period. Technologies like 3G mobile communication, advancements in Wi-Fi, VoIP, and digital signal processing evolved quickly. If the 'miscellaneous communication equipment' procured was not designed with upgradeability or future compatibility in mind, its value could have diminished rapidly due to obsolescence. The government might have ended up with outdated technology by the contract's conclusion, potentially requiring further investment to maintain operational effectiveness or replace the equipment sooner than anticipated.

What is the typical role of the General Services Administration (GSA) in procuring IT and communication equipment for federal agencies?

The General Services Administration (GSA) plays a crucial role in procuring IT and communication equipment for federal agencies, often acting as a central procurement authority. GSA utilizes various mechanisms, including Multiple Award Schedules (MAS), to provide agencies with pre-vetted vendors and pre-negotiated pricing, streamlining the acquisition process. For contracts like this one, GSA's Federal Acquisition Service (FAS) would manage the procurement, ensuring compliance with federal acquisition regulations. Their involvement aims to leverage government-wide buying power, achieve economies of scale, and provide agencies with access to a wide range of necessary goods and services efficiently.

Industry Classification

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

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: NEW PIID: GS00T04SJC0140

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 2339 ROUTE 70 WEST, FLOOR 3W, CHERRY HILL, NJ, 01

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

Financial Breakdown

Contract Ceiling: $79,731,138

Exercised Options: $79,731,138

Current Obligation: $73,270,017

Contract Characteristics

Multi-Year Contract: Yes

Cost or Pricing Data: YES

Timeline