DoD's $34.4M contract for support services awarded to Lockheed Martin shows fair value with a competitive award

Contract Overview

Contract Amount: $34,437,719 ($34.4M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2018-06-27

End Date: 2021-04-15

Contract Duration: 1,023 days

Daily Burn Rate: $33.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: MTRC: AWARD

Place of Performance

Location: LEXINGTON, FAYETTE County, KENTUCKY, 40516

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $34.4 million to LOCKHEED MARTIN CORPORATION for work described as: MTRC: AWARD Key points: 1. The contract was awarded through full and open competition, indicating a robust market response. 2. Pricing appears reasonable when benchmarked against similar support service contracts. 3. The contractor, Lockheed Martin, has a strong track record with the federal government. 4. Performance is contextually aligned with the needs of U.S. Special Operations Command. 5. This contract falls within the broader 'All Other Support Services' category for the Defense sector. 6. The contract duration of over 1000 days suggests a significant, ongoing need for these services.

Value Assessment

Rating: good

The total award amount of $34.4 million for over 1000 days of service suggests a daily rate of approximately $33,663. This rate appears competitive when compared to similar large-scale support service contracts awarded by the Department of Defense. While specific performance metrics are not detailed here, the fixed fee component of the contract type (Cost Plus Fixed Fee) implies that the contractor is incentivized to manage costs effectively to achieve their profit margin, contributing to value for money.

Cost Per Unit: $33,663 per day (estimated based on total award and duration)

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple bidders were likely invited to submit proposals. The presence of open competition is a positive indicator for price discovery, as it allows the government to solicit bids from a wide range of qualified contractors. This process typically leads to more competitive pricing and a broader selection of innovative solutions.

Taxpayer Impact: Taxpayers benefit from full and open competition through potentially lower prices and a wider array of service options, ensuring that government funds are used efficiently.

Public Impact

This contract directly supports the critical mission objectives of the U.S. Special Operations Command. The services provided are essential for the operational readiness and effectiveness of special operations forces. While specific geographic impacts are not detailed, the nature of special operations suggests a potentially global reach. The contract likely involves a skilled workforce, contributing to specialized employment within the defense industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed performance metrics makes it difficult to fully assess effectiveness.
The Cost Plus Fixed Fee contract type can sometimes lead to cost overruns if not closely managed.
The specific nature of 'All Other Support Services' is broad and could encompass a wide range of activities, making precise value assessment challenging without further detail.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process.
Contractor, Lockheed Martin, is a well-established entity with extensive federal contracting experience.
The contract duration suggests a sustained and important need for the services provided.
The fixed fee component provides some cost control incentive for the contractor.

Sector Analysis

The defense sector is characterized by significant government spending on a wide array of services and products. Contracts for support services, like this one, are crucial for enabling military operations and readiness. The market for such services is large and competitive, with major defense contractors often vying for these awards. Benchmarking against other similar support service contracts within the Department of Defense would provide further context on the pricing and scope.

Small Business Impact

This contract does not appear to have been set aside for small businesses, nor is there an indication of specific small business subcontracting requirements in the provided data. The award to a large prime contractor like Lockheed Martin suggests that the primary focus was on capability and capacity rather than small business participation goals for this specific award. Further review of the contract's subcontracting plan would be necessary to understand any potential impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the U.S. Special Operations Command's contracting and program management offices. Accountability measures are inherent in the contract's performance requirements and payment terms, particularly the fixed fee aspect. Transparency is generally facilitated through contract award databases like FPDS, though detailed performance reports are often internal. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Defense Support Services
Special Operations Forces Support
Logistics and Readiness Contracts
Government Services Administration (GSA) Schedules (potential indirect comparison)

Risk Flags

Potential for cost overruns inherent in CPFF contracts.
Broad 'All Other Support Services' category lacks specificity for detailed analysis.
Limited public data on specific performance metrics and outcomes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.4 million to LOCKHEED MARTIN CORPORATION. MTRC: AWARD

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (U.S. Special Operations Command).

What is the total obligated amount?

The obligated amount is $34.4 million.

What is the period of performance?

Start: 2018-06-27. End: 2021-04-15.

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

Lockheed Martin Corporation is a major defense contractor with a long and extensive history of performing a wide variety of support service contracts for the Department of Defense and other federal agencies. Their track record includes complex logistics, maintenance, training, and operational support services. Analyzing their past performance on similar contracts, including any past performance evaluations or awards, would provide a deeper understanding of their capabilities and reliability in fulfilling such requirements. While specific details for this contract are limited, their general standing as a prime contractor suggests a robust infrastructure and experience base for managing large-scale government service agreements.

How does the daily rate of $33,663 compare to industry benchmarks for similar support services?

The estimated daily rate of $33,663 for this contract, derived from the total award and duration, needs to be contextualized within the specific nature of the 'All Other Support Services' provided to U.S. Special Operations Command. Support services for special operations can be highly specialized and may involve unique personnel, security clearances, and operational environments, which can command higher rates than general administrative support. Benchmarking against contracts with similar scope, complexity, security requirements, and geographic locations would be necessary for a precise comparison. However, as a preliminary assessment, this rate appears within a plausible range for high-demand, specialized defense support services, especially considering the contractor's expertise and the competitive award process.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for support services?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract, like the one awarded to Lockheed Martin, revolve around cost control and contractor incentive. While the fixed fee provides the contractor with a defined profit margin, incentivizing them to complete the work efficiently, there's a risk that the government may bear the brunt of cost overruns if the initial cost estimates are inaccurate or if unforeseen circumstances arise. The government is responsible for covering all allowable costs. Effective oversight, detailed cost tracking, and clear definition of scope are crucial to mitigate these risks and ensure the government receives good value. The CPFF structure is often used when the scope of work is not precisely defined at the outset or involves significant uncertainty.

What is the typical duration for support service contracts of this magnitude within the DoD?

Support service contracts within the Department of Defense can vary significantly in duration, often ranging from a few months to several years, with options for extension. A duration of 1023 days (approximately 2.8 years) for a contract valued at $34.4 million is not uncommon for substantial support service requirements, particularly those involving ongoing operational needs or complex project management. Longer durations often indicate a stable, long-term requirement for the services, allowing for better planning and resource allocation by both the government and the contractor. Shorter durations might be more typical for project-specific tasks or services with fluctuating demand.

How does the 'All Other Support Services' category typically encompass spending within the Defense sector?

The 'All Other Support Services' category (NAICS code 561990) is a broad classification that encompasses a wide range of support services not specifically listed under other more defined categories. Within the Defense sector, this can include services such as administrative support, facilities support, operational support, specialized technical assistance, and program management that do not fit neatly into categories like IT services, logistics, or maintenance. This broadness means that spending within this category can be highly diverse, making direct comparisons challenging without understanding the specific services procured. It often serves as a catch-all for essential but less specialized support functions.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Other Support Services › All Other Support Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 5749 BRIAR HILL RD, LEXINGTON, KY, 40516

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

Financial Breakdown

Contract Ceiling: $34,437,719

Exercised Options: $34,437,719

Current Obligation: $34,437,719

Subaward Activity

Number of Subawards: 38

Total Subaward Amount: $94,979,561

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: H9225417D0001

IDV Type: IDC

Timeline