DoD's $14.1M contract for support services awarded to Lockheed Martin, with 7731 days remaining

Contract Overview

Contract Amount: $14,147,539 ($14.1M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2020-02-04

End Date: 2025-02-07

Contract Duration: 1,830 days

Daily Burn Rate: $7.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: CPFF - ECM LCSM

Place of Performance

Location: LEXINGTON, FAYETTE County, KENTUCKY, 40516

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $14.1 million to LOCKHEED MARTIN CORPORATION for work described as: CPFF - ECM LCSM Key points: 1. Contract value appears reasonable given the extended duration and specialized nature of support services. 2. Full and open competition suggests a healthy market for these services, potentially leading to better pricing. 3. The Cost Plus Fixed Fee (CPFF) structure carries inherent risk of cost overruns, requiring diligent oversight. 4. This contract supports critical U.S. Special Operations Command (SOCOM) needs, indicating a high-priority requirement. 5. The contractor, Lockheed Martin, is a major defense industry player with extensive experience. 6. Performance is expected over a significant period, necessitating ongoing monitoring of deliverables and quality.

Value Assessment

Rating: good

The contract's total value of $14.1 million is spread over approximately 5 years, making the annual value around $2.8 million. This appears to be a fair price for specialized support services provided by a large defense contractor like Lockheed Martin, especially considering the complexity often associated with SOCOM requirements. Benchmarking against similar long-term, high-security support contracts would provide a more precise value assessment, but initial indications suggest a reasonable allocation of funds.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. This competitive process is crucial for ensuring that the government receives the best possible value and that pricing is driven by market forces rather than limited options. The presence of multiple qualified bidders suggests a robust market for these specialized support services.

Taxpayer Impact: Taxpayers benefit from full and open competition through potentially lower prices and a wider array of innovative solutions being considered. This process helps prevent price gouging and ensures that public funds are used efficiently.

Public Impact

This contract directly benefits U.S. Special Operations Command by providing essential support services. The services delivered are critical for the operational readiness and effectiveness of special operations forces. The geographic impact is primarily within Kentucky (ST), where the contractor's facility is located, but the ultimate beneficiaries are national security interests. While specific workforce implications are not detailed, such contracts typically support a cadre of skilled professionals in specialized fields.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

CPFF contracts can incentivize contractors to increase costs to maximize profit, necessitating robust cost monitoring.
The long duration of the contract (over 5 years) increases the risk of scope creep or changing requirements.
Reliance on a single large contractor may limit future flexibility or opportunities for smaller, more agile firms.

Positive Signals

Awarded under full and open competition, suggesting a competitive pricing environment.
The contractor, Lockheed Martin, has a strong track record in defense contracting.
The contract supports a critical national security mission for U.S. Special Operations Command.

Sector Analysis

This contract falls within the broader 'All Other Support Services' category, which encompasses a wide range of professional and technical services supporting government operations. The defense sector, particularly for specialized units like SOCOM, often requires highly technical and mission-critical support. Spending in this area is substantial, driven by the need for advanced capabilities and contractor expertise that may not be readily available within the government workforce. Comparable spending benchmarks would focus on long-term support service contracts for defense agencies.

Small Business Impact

The contract was not set aside for small businesses, and the prime contractor is Lockheed Martin, a large corporation. There is no explicit information regarding subcontracting plans for small businesses within this award. This suggests that the primary focus was on securing the specialized services required by SOCOM from a capable prime, with potential implications for small business participation needing further investigation.

Oversight & Accountability

Oversight for this contract will likely be managed by the U.S. Special Operations Command contracting office, with potential involvement from the Department of Defense Inspector General. The CPFF nature of the contract necessitates rigorous financial oversight to ensure costs are reasonable and allocable. Transparency will depend on the reporting requirements stipulated in the contract and the agency's policies on releasing such information.

Related Government Programs

Special Operations Forces Support Contracts
Department of Defense Professional Services
Long-Term Government Support Services
Lockheed Martin Defense Contracts

Risk Flags

CPFF Contract Type Risk
Long-Term Contract Duration
Specialized Support Services

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.1 million to LOCKHEED MARTIN CORPORATION. CPFF - ECM 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 $14.1 million.

What is the period of performance?

Start: 2020-02-04. End: 2025-02-07.

What is Lockheed Martin's track record with similar Cost Plus Fixed Fee (CPFF) contracts within the Department of Defense?

Lockheed Martin has a long and extensive history of performing on CPFF contracts across various branches of the Department of Defense. These contracts often involve complex research, development, and support services where the final costs are less predictable. While CPFF contracts can offer flexibility, they also require robust government oversight to manage costs effectively. Lockheed Martin's performance on such contracts is generally viewed as experienced, given their scale and the nature of the programs they undertake. However, like any large contractor, specific contract performance can vary, and a detailed review of past CPFF engagements would be necessary to identify any recurring issues or exceptional successes related to cost control and delivery.

How does the $14.1 million value compare to similar support service contracts awarded by U.S. Special Operations Command?

Comparing the $14.1 million value requires context regarding the specific support services rendered and the contract duration. This contract has a duration of approximately 1830 days (5 years), making the average annual value around $2.8 million. For specialized support services required by U.S. Special Operations Command (SOCOM), which often involve high levels of security, technical expertise, and operational integration, this annual value is within a reasonable range. Many SOCOM support contracts, especially those involving advanced technology or mission-critical functions, can range from several million to tens of millions of dollars annually. Without knowing the precise scope of 'All Other Support Services,' a direct comparison is difficult, but the value appears commensurate with the potential complexity and criticality of SOCOM needs over a five-year period.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this specific service?

The primary risk with a CPFF contract type for support services is the potential for cost overruns. While the contractor receives a fixed fee, the 'cost plus' element means that the government reimburses the contractor's allowable costs. If costs escalate beyond initial estimates due to inefficiencies, unforeseen challenges, or scope creep, the total expenditure for the government increases. For specialized support services, accurately estimating all costs upfront can be difficult. This necessitates stringent government oversight, including detailed audits of incurred costs, clear definition of allowable expenses, and proactive management to ensure the contractor maintains cost discipline. The risk is that the government may end up paying significantly more than initially anticipated if cost controls are not rigorously enforced.

What is the expected impact of this contract on the operational effectiveness of U.S. Special Operations Command?

This contract is expected to have a positive impact on the operational effectiveness of U.S. Special Operations Command (SOCOM) by ensuring the provision of critical support services. While the specific nature of these services isn't detailed under 'All Other Support Services,' they are likely essential for enabling SOCOM personnel to focus on their core missions. Such support can range from logistical and administrative functions to technical assistance, maintenance, or specialized operational planning. By outsourcing these functions to experienced contractors like Lockheed Martin, SOCOM can potentially enhance its agility, access specialized expertise, and maintain readiness. The long duration suggests these services are considered foundational to ongoing operations.

How has federal spending in 'All Other Support Services' (NAICS 561990) evolved over the past five years, and where does this contract fit?

Federal spending in the 'All Other Support Services' category (NAICS 561990) has generally seen a steady increase over the past five years, reflecting the government's continued reliance on external expertise for a wide array of operational and administrative functions. This category is broad, encompassing services not classified elsewhere, such as facilities support, document preparation, and various specialized consulting. The $14.1 million contract awarded to Lockheed Martin represents a significant, albeit not exceptionally large, portion of this spending, particularly given its five-year duration. It fits within the trend of agencies outsourcing non-core functions to specialized providers, especially within high-demand sectors like defense. The growth in this category highlights a strategic decision by agencies to leverage contractor capabilities for efficiency and specialized knowledge.

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: $14,147,539

Exercised Options: $14,147,539

Current Obligation: $14,147,539

Subaward Activity

Number of Subawards: 45

Total Subaward Amount: $6,047,213

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