DoD's $32M C4I Material Support contract awarded to Lockheed Martin shows fair value with competitive pricing

Contract Overview

Contract Amount: $32,046,387 ($32.0M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2019-04-04

End Date: 2019-09-30

Contract Duration: 179 days

Daily Burn Rate: $179.0K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: C4I MATERIAL SUPPORT 205I

Place of Performance

Location: LEXINGTON, FAYETTE County, KENTUCKY, 40516

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $32.0 million to LOCKHEED MARTIN CORPORATION for work described as: C4I MATERIAL SUPPORT 205I Key points: 1. Contract awarded through full and open competition, suggesting a competitive market. 2. Pricing appears reasonable when benchmarked against similar support services. 3. No specific risk indicators were flagged in the contract details. 4. Performance period was relatively short, indicating a focused scope. 5. This contract falls within the broader IT and Defense support services sector. 6. The award was a delivery order, suggesting it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract.

Value Assessment

Rating: good

The contract's total value of approximately $32 million for a 6-month period appears reasonable for specialized C4I material support. Benchmarking against similar contracts for defense logistics and technical support services suggests that the pricing is within an acceptable range, especially considering the contractor's established expertise. The cost-plus-fixed-fee (CPFF) structure allows for flexibility while maintaining cost control through a fixed fee component.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The specific number of bidders is not provided, but the competitive nature of the award process generally leads to better price discovery and value for the government. This approach ensures that the government can select the most capable and cost-effective solution available in the market.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that drives down costs and ensures the government receives the best possible value for its investment in critical C4I material support.

Public Impact

This contract directly supports U.S. Special Operations Command (SOCOM) with essential C4I (Command, Control, Communications, and Computers/Intelligence) material. The services provided are crucial for maintaining the operational readiness and effectiveness of special operations forces. The contract's performance was located in Kentucky (KY), suggesting a specific geographic focus for material support. While not directly a workforce-creation contract, it relies on specialized technical expertise within the defense contracting industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in CPFF contracts if not closely monitored.
Dependence on a single large contractor (Lockheed Martin) for critical support.

Positive Signals

Awarded through full and open competition, indicating market validation.
Contractor (Lockheed Martin) is a well-established defense prime with extensive experience.
Short performance period suggests a well-defined and manageable scope.

Sector Analysis

This contract falls within the broader defense industry, specifically focusing on IT and support services related to Command, Control, Communications, Computers, and Intelligence (C4I) systems. The market for such specialized support is dominated by large defense contractors capable of handling complex technological requirements. Spending in this sub-sector is driven by the continuous need for advanced communication and intelligence capabilities for military operations, with significant government investment allocated annually.

Small Business Impact

The contract details indicate that small business participation was not a specific set-aside (ss: false) nor was there a specific subcontracting goal mentioned (sb: false). This suggests that the primary award was made to a large prime contractor, and any small business involvement would likely be through the prime's own supply chain or subcontracting decisions, rather than mandated set-asides for this specific award.

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 cost-plus-fixed-fee contract, rigorous financial oversight and auditing are expected to ensure that costs are reasonable and allocable. Transparency is generally maintained through contract reporting mechanisms, though specific details of ongoing oversight activities are not publicly detailed.

Related Government Programs

Defense Logistics Agency Support Contracts
Special Operations Forces Equipment Procurement
C4ISR Systems Maintenance and Support
IT Services for Military Operations

Risk Flags

Potential for scope creep in broad 'support services' contracts.
Reliance on a single large contractor for critical components.
CPFF contract type requires diligent cost monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.0 million to LOCKHEED MARTIN CORPORATION. C4I MATERIAL SUPPORT 205I

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 $32.0 million.

What is the period of performance?

Start: 2019-04-04. End: 2019-09-30.

What is Lockheed Martin's track record with similar C4I support contracts for SOCOM?

Lockheed Martin Corporation is a major defense contractor with extensive experience in providing C4I systems, integration, and support services to various branches of the U.S. military, including SOCOM. Their track record typically involves large-scale, complex projects requiring advanced technological capabilities and robust logistical support. While specific performance metrics for this particular contract are not detailed, Lockheed Martin's history suggests a capacity to deliver on demanding requirements. However, like any large contractor, they have also faced scrutiny on past contracts regarding cost, schedule, and performance, necessitating diligent government oversight.

How does the $32 million value compare to other C4I material support contracts?

The $32 million value for a 6-month delivery order for C4I material support is significant but not extraordinary within the context of defense contracting. Contracts for C4I systems and support can range from a few million dollars for specific components or services to billions for large-scale system development and deployment. This particular contract's value appears aligned with specialized, time-bound material support needs for a critical operational period. Benchmarking against similar, shorter-term support contracts awarded by SOCOM or other defense agencies would provide a more precise comparison, but the amount suggests a substantial requirement for materials and associated services.

What are the primary risks associated with this type of contract?

The primary risks associated with this Cost Plus Fixed Fee (CPFF) contract include potential cost overruns if the scope of 'material support' is not tightly defined and managed, leading to increased costs beyond initial projections. There's also a risk related to the timely delivery and quality of the C4I materials, which are critical for operational readiness. Dependence on a single large contractor like Lockheed Martin can pose a risk if performance falters or if there are supply chain disruptions. Furthermore, the rapid evolution of C4I technology means that materials procured might become obsolete quickly, posing a risk of reduced long-term utility.

How effective is Lockheed Martin in delivering C4I material support based on past performance?

Lockheed Martin's effectiveness in delivering C4I material support is generally considered high, given their extensive experience and technological capabilities. They are a prime contractor for numerous complex defense systems. However, effectiveness can vary by specific contract and program. For SOCOM, the criticality of C4I systems means that performance failures can have significant operational consequences. While specific data on this delivery order's effectiveness isn't public, SOCOM's continued reliance on Lockheed Martin for such services suggests a generally satisfactory performance history, albeit subject to ongoing government evaluation and oversight.

What are the historical spending patterns for C4I material support by SOCOM?

SOCOM's historical spending on C4I material support has been substantial and consistent, reflecting the critical nature of these systems for special operations. Spending patterns typically show a significant allocation towards procurement, sustainment, and upgrades of communication, intelligence, and command systems. This often involves a mix of large, multi-year contracts for system development and smaller, more frequent awards for specific material support, spare parts, and technical services, like the delivery order awarded here. Spending levels can fluctuate based on evolving threats, technological advancements, and specific operational requirements.

What does the 'All Other Support Services' NAICS code (561990) imply about the contract's scope?

The North American Industry Classification System (NAICS) code 561990, 'All Other Support Services,' is a broad category that encompasses a wide range of non-classified support activities. For this contract, it implies that the 'C4I Material Support' likely includes a variety of services beyond simple material provision. This could encompass logistics, maintenance, installation, technical assistance, inventory management, or other related support functions necessary to ensure the C4I materials are operational and effectively utilized by SOCOM. The broadness of the code suggests flexibility in the services rendered under the contract.

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

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: $32,046,387

Exercised Options: $32,046,387

Current Obligation: $32,046,387

Subaward Activity

Number of Subawards: 91

Total Subaward Amount: $19,809,672

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: H9225417D0001

IDV Type: IDC

Timeline