DoD's $35.3M contract for JTWS LCSM services awarded to Lockheed Martin Corporation shows fair value

Contract Overview

Contract Amount: $35,302,873 ($35.3M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2019-02-22

End Date: 2023-02-17

Contract Duration: 1,456 days

Daily Burn Rate: $24.2K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: JTWS LCSM

Place of Performance

Location: LEXINGTON, FAYETTE County, KENTUCKY, 40516

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $35.3 million to LOCKHEED MARTIN CORPORATION for work described as: JTWS LCSM Key points: 1. The contract value of $35.3 million over approximately 4 years suggests a moderate annual spend. 2. Awarded via full and open competition, indicating a competitive bidding process. 3. The Cost Plus Fixed Fee (CPFF) contract type introduces potential for cost overruns if not closely managed. 4. Performance is in Kentucky, suggesting a localized impact on the workforce and economy. 5. The contractor, Lockheed Martin Corporation, is a major defense contractor with extensive experience. 6. The NAICS code 561990 points to a broad range of support services, requiring careful scope management.

Value Assessment

Rating: good

The contract value of $35.3 million for approximately four years of support services appears reasonable given the nature of defense contracting. Benchmarking against similar support services contracts for specialized systems is challenging without more specific service details. However, the CPFF structure necessitates vigilant oversight to ensure costs remain aligned with the fixed fee and deliverable value. The absence of a specific price per unit makes direct value-for-money assessment difficult, but the overall award size is within expected ranges for complex support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple bidders had the opportunity to submit proposals. This level of competition is generally favorable for price discovery and can lead to more competitive pricing for the government. The specific number of bidders is not provided, but the mechanism itself implies a robust selection process.

Taxpayer Impact: A competitive award process like this typically benefits taxpayers by driving down costs and ensuring the government receives the best possible value for its investment.

Public Impact

The primary beneficiaries are likely U.S. Special Operations Command (SOCOM) personnel who rely on the JTWS LCSM system. The services delivered are crucial for the operational readiness and effectiveness of special operations forces. The geographic impact is centered in Kentucky, potentially supporting local employment and businesses. The contract supports a specialized segment of the defense industry workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not managed effectively.
The broad NAICS code (561990) for 'All Other Support Services' may indicate a less defined scope, increasing risk.
Lack of specific performance metrics or unit costs makes detailed value assessment challenging.

Positive Signals

Awarded through full and open competition, suggesting a competitive environment.
Contractor, Lockheed Martin Corporation, is a well-established entity with significant defense sector experience.
Contract duration of approximately four years allows for sustained support and potential for efficiency gains.

Sector Analysis

This contract falls within the broader defense support services sector, a significant segment of the federal contracting market. The market for specialized support services for advanced military systems is often dominated by large, experienced defense contractors. Benchmarking spending requires comparison to similar support contracts for complex weapon systems or operational platforms, where costs can vary widely based on system complexity and required expertise.

Small Business Impact

The data indicates that small business participation was not a specific set-aside (ss: false, sb: false). Therefore, the primary impact on small businesses would be through potential subcontracting opportunities, which are not detailed here. Without specific subcontracting plans or goals, it's difficult to assess the direct impact on the small business ecosystem for this particular contract.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the U.S. Special Operations Command (SOCOM) contracting and program management offices. Accountability measures are inherent in the CPFF structure, requiring the contractor to justify costs against the fixed fee. Transparency is generally maintained through contract award databases, though detailed performance reporting may be less public. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Special Operations Forces Support Services
Defense Logistics and Support Contracts
Information Technology Support Services (if applicable to JTWS LCSM)
Weapon System Maintenance and Support

Risk Flags

Potential for cost overruns due to CPFF structure.
Broad service classification may lead to scope creep.
Lack of specific performance metrics hinders detailed value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.3 million to LOCKHEED MARTIN CORPORATION. JTWS LCSM

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 $35.3 million.

What is the period of performance?

Start: 2019-02-22. End: 2023-02-17.

What is the specific function and criticality of the JTWS LCSM system being supported under this contract?

The Joint Tactical Warfare System (JTWS) and its associated Logistics Command and Support Module (LCSM) are critical components within the U.S. Special Operations Command (SOCOM) inventory. While specific operational details are often classified, these systems are generally understood to be integral to enabling advanced command, control, communications, and intelligence (C3I) capabilities for special operations forces. Their criticality stems from providing real-time situational awareness, secure communication links, and mission planning tools essential for complex, high-stakes missions. The support services procured under this contract likely encompass maintenance, sustainment, software updates, technical assistance, and potentially training, all vital for ensuring the system's readiness and effectiveness in diverse operational environments.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types for similar defense support services?

The Cost Plus Fixed Fee (CPFF) contract type is common in defense contracting, particularly for services where the scope of work may evolve or is difficult to precisely define upfront, such as research and development or complex support services. In a CPFF contract, the government reimburses the contractor for allowable costs plus a predetermined fixed fee representing profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers more flexibility for the contractor to adapt to changing requirements but shifts more cost risk to the government. It contrasts with Cost Plus Incentive Fee (CPIF) or Cost Plus Award Fee (CPAF) contracts, which incorporate performance incentives to motivate the contractor. While CPFF can be effective for ensuring service availability, it requires robust government oversight to control costs and prevent scope creep, making it potentially less cost-efficient than FFP if requirements are well-defined.

What is Lockheed Martin Corporation's track record with similar support services contracts for SOCOM or other branches of the DoD?

Lockheed Martin Corporation is a prime defense contractor with an extensive history of providing a wide array of support services across numerous platforms and programs for the Department of Defense (DoD), including U.S. Special Operations Command (SOCOM). Their track record includes sustainment, logistics, maintenance, training, and modernization services for complex systems such as aircraft, naval vessels, and command and control systems. While specific performance metrics for individual contracts are not always publicly available, Lockheed Martin generally possesses the infrastructure, expertise, and security clearances necessary to manage large-scale defense support contracts. Their long-standing presence and significant contract awards suggest a generally reliable performance history, though like any large contractor, they may have faced specific challenges or criticisms on particular programs.

What are the potential risks associated with the 'All Other Support Services' (NAICS 561990) classification for this contract?

The classification 'All Other Support Services' under NAICS code 561990 is inherently broad and can present several risks if not carefully managed. This category encompasses a wide range of non-classifiable support activities, meaning the specific nature of the services rendered under this contract may not be immediately apparent from the code alone. Risks include potential scope creep, where the contractor may be asked to perform services beyond the original intent, leading to cost increases. It can also make performance monitoring and evaluation more challenging for the government, as clear, measurable objectives may be harder to establish compared to contracts with more specific service descriptions. Furthermore, it might indicate a less mature or standardized service requirement, potentially increasing the likelihood of unforeseen issues or the need for extensive government oversight to ensure the services align with SOCOM's operational needs.

How does the $35.3 million contract value compare to historical spending on JTWS LCSM or similar SOCOM support systems?

Direct historical spending comparisons for the JTWS LCSM system are difficult without access to classified or internal SOCOM budget data. However, $35.3 million spread over approximately four years equates to an average annual spend of roughly $8.8 million. This figure appears moderate for specialized support services within a major defense command like SOCOM, which operates highly advanced and often unique systems. Larger, more complex platforms or systems with extensive global deployments typically command significantly higher sustainment and support budgets. This contract's value suggests it supports a critical but perhaps more niche system, or that the scope of support is focused on specific aspects of the JTWS LCSM lifecycle. Benchmarking against similar SOCOM support contracts would require detailed knowledge of the systems' complexity, user base, and operational tempo.

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

Solicitation ID: H9225416R0001

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

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: $35,302,873

Exercised Options: $35,302,873

Current Obligation: $35,302,873

Subaward Activity

Number of Subawards: 69

Total Subaward Amount: $57,854,217

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: H9225417D0001

IDV Type: IDC

Timeline