DoD awards $25.6M contract for support services to Lockheed Martin, highlighting potential value concerns
Contract Overview
Contract Amount: $25,611,043 ($25.6M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2020-04-23
End Date: 2021-04-22
Contract Duration: 364 days
Daily Burn Rate: $70.4K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: PEO-M SS LCSM AWARD
Place of Performance
Location: LEXINGTON, FAYETTE County, KENTUCKY, 40516
State: Kentucky Government Spending
Plain-Language Summary
Department of Defense obligated $25.6 million to LOCKHEED MARTIN CORPORATION for work described as: PEO-M SS LCSM AWARD Key points: 1. The contract's cost-plus-fixed-fee structure may incentivize higher spending without strict cost controls. 2. Competition was full and open, suggesting a potentially competitive pricing environment. 3. The contract duration of one year is relatively short, allowing for periodic reassessment of value. 4. Performance is located in Kentucky, potentially impacting local workforce and economic development. 5. The specific services provided under 'All Other Support Services' require further clarification for a complete value assessment. 6. Lockheed Martin's extensive experience in defense contracting suggests a capable but potentially high-cost provider.
Value Assessment
Rating: fair
The contract's value is difficult to benchmark without detailed service descriptions and performance metrics. The Cost Plus Fixed Fee (CPFF) pricing structure, while common for complex services, can lead to cost overruns if not managed tightly. Comparing this to similar support service contracts within the DoD is challenging due to the broad NAICS code (561990). However, the fixed fee component provides some predictability for the contractor's profit, but the overall cost to the government is variable.
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 number of bidders is not specified, but this method generally promotes a competitive environment, which should theoretically lead to better pricing for the government. The agency's decision to use full and open competition suggests confidence in the market's ability to provide qualified offerors.
Taxpayer Impact: A competitive award process helps ensure that taxpayer dollars are used efficiently by driving down prices and encouraging innovation among potential contractors.
Public Impact
U.S. Special Operations Command benefits from specialized support services essential for its operations. The contract delivers 'All Other Support Services,' which could encompass a wide range of critical functions. Geographic impact is concentrated in Kentucky, potentially creating or sustaining jobs in that region. The contract may indirectly support a specialized segment of the defense industry workforce.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee structure may lead to cost escalation if not rigorously managed.
- Lack of specific service details makes it hard to assess true value for money.
- Potential for contractor to maximize costs within the 'cost' portion of the contract.
- Reliance on a single large contractor for diverse support services could limit future flexibility.
Positive Signals
- Awarded through full and open competition, suggesting a robust bidding process.
- Lockheed Martin is a well-established defense contractor with significant experience.
- Fixed fee provides a defined profit margin for the contractor, limiting unbounded profit.
- Contract duration is one year, allowing for periodic review and potential re-competition.
Sector Analysis
The defense support services sector is a significant component of the federal contracting landscape, encompassing a wide array of specialized services. This contract falls under the broad 'All Other Support Services' category, which can include anything from administrative and logistical support to specialized technical assistance. The market for these services is competitive, with large prime contractors like Lockheed Martin often playing a significant role. Benchmarking spending in this specific sub-sector is challenging due to its broad definition, but overall federal spending on support services runs into billions annually.
Small Business Impact
There is no indication that this contract included a small business set-aside. Given the prime contractor is Lockheed Martin, a large defense corporation, the potential for small business subcontracting exists. However, without specific subcontracting plans or goals outlined in the award, the direct impact on the small business ecosystem is unclear. Further investigation into subcontracting opportunities would be necessary to assess the benefit to small businesses.
Oversight & Accountability
Oversight for this contract would primarily fall under the U.S. Special Operations Command (SOCOM) contracting and program management offices. Accountability measures are typically embedded within the contract's terms and conditions, including performance standards and reporting requirements. Transparency is generally facilitated through contract award databases, though detailed performance data may be limited. The Inspector General for the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.
Related Government Programs
- Department of Defense Support Services
- Special Operations Command Procurement
- Lockheed Martin Defense Contracts
- Cost Plus Fixed Fee Contracts
- All Other Support Services
Risk Flags
- Cost-plus-fixed-fee contract type carries inherent cost escalation risk.
- Broad 'All Other Support Services' category lacks specificity, potentially leading to scope ambiguity.
- Lack of detailed performance metrics makes value assessment challenging.
- Reliance on a single large contractor may limit future flexibility or competition.
Tags
defense, department-of-defense, u-s-special-operations-command, lockheed-martin-corporation, delivery-order, full-and-open-competition, cost-plus-fixed-fee, support-services, naics-561990, kentucky, large-business
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $25.6 million to LOCKHEED MARTIN CORPORATION. PEO-M SS LCSM 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 $25.6 million.
What is the period of performance?
Start: 2020-04-23. End: 2021-04-22.
What specific services are included under the 'All Other Support Services' designation for this contract?
The 'All Other Support Services' (NAICS 561990) designation is very broad and can encompass a wide range of activities. For this specific contract with Lockheed Martin for the U.S. Special Operations Command (SOCOM), these services could potentially include logistical support, administrative functions, technical assistance, training development, facility maintenance, or specialized operational support. Without the detailed statement of work (SOW) or contract line item numbers (CLINs), it is impossible to determine the precise nature of the services. This ambiguity makes it difficult to assess the necessity, efficiency, and overall value of the contract without further information from the agency.
How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types for similar support services?
The Cost Plus Fixed Fee (CPFF) structure is common for complex services where the scope may evolve or is not fully defined at the outset, as it was here with a $25.6 million award. In a CPFF contract, the government reimburses the contractor for allowable costs plus a predetermined fixed fee representing profit. This differs from Fixed Price contracts, where the price is set regardless of costs incurred, incentivizing efficiency. It also differs from Cost Plus Incentive Fee (CPIF), which adjusts profit based on performance against targets. While CPFF provides flexibility, it carries a higher risk of cost growth for the government compared to fixed-price arrangements, necessitating robust oversight to manage expenditures effectively.
What is Lockheed Martin's track record with similar support service contracts for SOCOM or other DoD components?
Lockheed Martin Corporation is a major defense contractor with extensive experience across numerous service categories for the Department of Defense, including SOCOM. They have a long history of performing complex support services, logistics, and technical assistance. While their overall track record is substantial, the specific performance on contracts similar to this one would require a detailed review of past performance evaluations (e.g., CPARS reports) and any documented issues or successes. Given their size and scope, they are generally considered capable, but the cost-effectiveness and quality of their services can vary significantly depending on the specific contract and program management.
Are there any known risks or performance concerns associated with this specific contract award?
At the time of this award ($25.6 million for PEO-M SS LCSM AWARD), specific performance concerns were not publicly detailed. However, general risks associated with CPFF contracts include potential cost overruns if not managed diligently by the government. The broad nature of 'All Other Support Services' also presents a risk of scope creep or misinterpretation of requirements. Lockheed Martin's status as a large, established contractor generally implies a lower risk of contractor failure, but effective program management by SOCOM is crucial to mitigate cost and performance risks inherent in this type of contract.
How does the $25.6 million award compare to historical spending on similar support services by SOCOM?
Comparing this $25.6 million award to historical SOCOM spending on 'All Other Support Services' requires access to detailed historical contract data. SOCOM procures a wide range of services, and the specific nature of these 'support services' can vary significantly year over year and contract by contract. Without knowing the exact services rendered under this $25.6 million award, a direct comparison is difficult. However, SOCOM's overall budget and contracting activities are substantial, and awards in the tens of millions for specialized support are not uncommon within the special operations domain. A trend analysis would require examining multiple years of SOCOM's contracting actions within the 561990 NAICS code or functionally similar categories.
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
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: $25,611,043
Exercised Options: $25,611,043
Current Obligation: $25,611,043
Subaward Activity
Number of Subawards: 35
Total Subaward Amount: $29,248,903
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
Start Date: 2020-04-23
Current End Date: 2021-04-22
Potential End Date: 2021-04-22 00:00:00
Last Modified: 2025-09-30
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