DoD's $26.2M contract with Lockheed Martin for support services shows fair value and strong competition

Contract Overview

Contract Amount: $26,228,533 ($26.2M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2019-01-16

End Date: 2020-01-18

Contract Duration: 367 days

Daily Burn Rate: $71.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: FOSOV MECHANICS: AWARD

Place of Performance

Location: LEXINGTON, FAYETTE County, KENTUCKY, 40516

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $26.2 million to LOCKHEED MARTIN CORPORATION for work described as: FOSOV MECHANICS: AWARD Key points: 1. The contract's value appears reasonable given the specialized nature of support services for U.S. Special Operations Command. 2. Full and open competition suggests a healthy market for these services, likely driving competitive pricing. 3. The single delivery order structure may indicate a need for agile and responsive support. 4. Performance context is limited without specific deliverables, but the contractor's experience is a positive indicator. 5. This contract falls within the broader 'Support Services' sector for the Department of Defense. 6. The fixed fee structure provides some cost control for the government.

Value Assessment

Rating: good

The award amount of $26.2 million for a one-year period appears to be within a reasonable range for specialized support services provided to a high-demand agency like U.S. Special Operations Command. Benchmarking against similar contracts is challenging without more specific service details, but the fixed-fee structure suggests a degree of predictability in costs. The contractor, Lockheed Martin, is a major defense contractor with extensive experience, which can often translate to efficient service delivery and potentially better value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple capable vendors had the opportunity to bid. This process is designed to foster a competitive environment, which typically leads to more favorable pricing and better quality services for the government. The fact that it was competed suggests a robust market for these types of support services, with several potential providers vying for the contract.

Taxpayer Impact: A competitive bidding process ensures that taxpayer dollars are used efficiently by driving down costs and encouraging innovation among contractors.

Public Impact

U.S. Special Operations Command personnel benefit from enhanced support services, potentially improving operational readiness and effectiveness. The contract delivers essential support services, though the specific nature of these services is not detailed. The geographic impact is primarily focused on the operational areas of U.S. Special Operations Command, likely within Kentucky where the contract was administered. Workforce implications include employment opportunities within Lockheed Martin and potentially its subcontractors, contributing to the defense industry workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it difficult to assess the true value and effectiveness of the services delivered.
The 'All Other Support Services' NAICS code is very broad, obscuring the precise nature and potential risks associated with the contracted work.
Cost Plus Fixed Fee (CPFF) contracts can sometimes lead to cost overruns if not carefully managed and monitored.

Positive Signals

Awarded under full and open competition, suggesting a competitive market and potentially fair pricing.
Contractor is Lockheed Martin, a reputable and experienced defense contractor with a strong track record.
The contract duration of approximately one year allows for flexibility and reassessment of needs.
The fixed fee component provides a degree of cost certainty for the government.

Sector Analysis

This contract falls within the broader defense support services sector, a significant segment of the federal contracting market. The defense sector relies heavily on specialized support services to maintain operational capabilities, ranging from logistics and maintenance to technical assistance and program management. Spending in this area is substantial, with numerous companies, including large prime contractors like Lockheed Martin and a vast network of subcontractors, contributing to the industry. This contract represents a small portion of overall defense spending but highlights the ongoing need for specialized support.

Small Business Impact

While this contract was not specifically set aside for small businesses and the data indicates no small business participation (sb: false), large prime contractors like Lockheed Martin often engage small businesses as subcontractors. The extent of subcontracting is not detailed here, but it is a common practice in the defense industry to leverage specialized capabilities offered by smaller firms. The absence of a small business set-aside does not preclude potential opportunities for small businesses to participate indirectly.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the U.S. Special Operations Command contracting and program management offices. As a delivery order under a larger contract vehicle, oversight would focus on ensuring timely delivery, adherence to the fixed-fee terms, and satisfactory performance against the defined scope of work. Transparency is generally maintained through contract databases and reporting requirements, though specific performance details may be sensitive. 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 Maintenance Support Contracts
Professional Services Contracts

Risk Flags

Broad NAICS code obscures specific service details.
Potential for scope creep in 'support services' contracts.
CPFF contract type requires diligent oversight to control costs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.2 million to LOCKHEED MARTIN CORPORATION. FOSOV MECHANICS: 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 $26.2 million.

What is the period of performance?

Start: 2019-01-16. End: 2020-01-18.

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

Lockheed Martin Corporation is a major defense contractor with an extensive history of performing a wide array of support services for the Department of Defense (DoD) and other government agencies. Their track record includes complex logistics, maintenance, technical support, training, and program management for various military branches and special operations units. They have consistently secured large-value contracts, demonstrating their capacity and capability to meet demanding requirements. While specific performance metrics for individual contracts are often not publicly detailed, their sustained presence as a prime contractor indicates a generally positive performance history and a strong understanding of government contracting processes and military operational needs. Their experience often allows them to anticipate challenges and provide integrated solutions.

How does the value of this contract compare to similar support service contracts awarded by the DoD?

The $26.2 million award for a one-year period for 'All Other Support Services' to U.S. Special Operations Command is difficult to benchmark precisely without knowing the specific nature of the services. However, for specialized support to SOCOM, this value is not unusual. Large defense contracts for comprehensive support packages can range from tens of millions to billions of dollars annually. Contracts for niche or highly technical support services, even if for a shorter duration or smaller scope, can command significant prices due to the expertise required. Compared to broader, less specialized service contracts, this award might appear higher on a per-unit or per-service basis, but the context of SOCOM requirements suggests it is likely aligned with market rates for such specialized support.

What are the primary risks associated with this type of 'All Other Support Services' contract?

The primary risks associated with a broad 'All Other Support Services' contract, especially under a Cost Plus Fixed Fee (CPFF) structure, include scope creep, performance deficiencies, and potential cost overruns if not managed diligently. The vagueness of the NAICS code '561990 - All Other Support Services' means the specific deliverables and performance standards might not be clearly defined, increasing the risk of disputes or unmet expectations. For the government, there's a risk that the contractor may not deliver the expected level of support, impacting operational readiness. For the contractor, the risk lies in accurately estimating costs and delivering services within the fixed fee, especially if unforeseen challenges arise. Effective oversight and clear performance metrics are crucial to mitigate these risks.

What does the 'Full and Open Competition' designation imply for program effectiveness and taxpayer value?

The 'Full and Open Competition' designation is a strong positive indicator for both program effectiveness and taxpayer value. It implies that the government solicited bids from all responsible sources, allowing for the widest possible range of potential contractors to compete. This competitive process typically drives down prices as contractors vie for the award, leading to better value for taxpayer money. Furthermore, competition often encourages innovation and higher quality service delivery as contractors seek to differentiate themselves. For program effectiveness, it means the selected contractor is likely the most capable and cost-effective provider identified through a rigorous evaluation process, increasing the probability of successful program outcomes.

How has historical spending on support services by U.S. Special Operations Command trended over the past five years?

Historical spending data for U.S. Special Operations Command (SOCOM) on support services generally shows a consistent and significant investment. SOCOM requires extensive support to execute its unique and often sensitive missions, encompassing areas like intelligence, logistics, training, maintenance, and specialized operational support. Over the past five years, spending in these categories has likely remained robust, potentially increasing in response to evolving global threats and operational demands. While specific figures for 'All Other Support Services' are not readily available without deeper analysis, the overall trend for SOCOM's contracting needs, including support services, has been substantial, reflecting the critical role these services play in enabling SOCOM's capabilities. Fluctuations may occur based on specific mission requirements and budget allocations.

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 (UEI: 834951691)

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: $26,228,533

Exercised Options: $26,228,533

Current Obligation: $26,228,533

Subaward Activity

Number of Subawards: 12

Total Subaward Amount: $34,337,539

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: H9225417D0001

IDV Type: IDC

Timeline