DoD awards $22.8M contract for support services, with Lockheed Martin as prime

Contract Overview

Contract Amount: $22,836,332 ($22.8M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2022-04-01

End Date: 2026-03-31

Contract Duration: 1,460 days

Daily Burn Rate: $15.6K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: SSE LCSM

Place of Performance

Location: LEXINGTON, FAYETTE County, KENTUCKY, 40516

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $22.8 million to LOCKHEED MARTIN CORPORATION for work described as: SSE LCSM Key points: 1. Contract value represents a significant investment in specialized support services. 2. Competition dynamics for this contract are crucial for ensuring fair pricing. 3. Performance risk is moderate given the nature of support services. 4. This contract falls within the broader defense sector's spending on operational support. 5. The duration of the contract suggests a long-term need for these services.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable service details. The cost-plus-fixed-fee structure can lead to cost overruns if not managed tightly. However, the fixed fee component provides some predictability for the contractor's profit margin. Further analysis would require understanding the specific deliverables and the market rates for such specialized support.

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 likely had the opportunity to submit proposals. This competitive process is generally expected to drive better pricing and value for the government. The number of bidders and the specific evaluation criteria would provide further insight into the effectiveness of the competition.

Taxpayer Impact: Full and open competition is favorable for taxpayers as it promotes a competitive environment, potentially leading to lower costs and better service quality compared to sole-source or limited competition awards.

Public Impact

The U.S. Special Operations Command is the primary beneficiary, receiving essential support services. The services delivered are critical for maintaining operational readiness and effectiveness. The contract has a geographic impact primarily within Kentucky, where the contractor is located. Workforce implications include potential job creation and utilization of skilled personnel in support roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can incentivize higher spending if not carefully monitored.
The specific nature of 'All Other Support Services' requires detailed oversight to ensure necessity and efficiency.
Long contract duration may lead to scope creep or evolving requirements that could increase costs.

Positive Signals

Awarded through full and open competition, suggesting a robust bidding process.
Lockheed Martin is a large, established defense contractor with a track record in complex service delivery.
The fixed fee component provides a degree of cost control on contractor profit.

Sector Analysis

This contract falls within the broader defense services sector, which encompasses a wide range of support functions for military operations. The market for defense support services is substantial, driven by the continuous need for logistical, technical, and operational assistance. Comparable spending benchmarks would typically involve analyzing other contracts for similar support services awarded by the Department of Defense or other military branches.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit information regarding subcontracting plans for small businesses. The absence of set-asides suggests that the primary focus was on large, capable contractors, potentially limiting direct opportunities for small businesses on this specific award, though they might be involved further down the supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the U.S. Special Operations Command, with potential involvement from the Department of Defense's Inspector General. Accountability measures would be tied to the performance metrics outlined in the contract and the cost-plus-fixed-fee structure. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive.

Related Government Programs

Defense Support Services
Special Operations Command Contracts
Logistics and Technical Support
Cost Plus Fixed Fee Contracts

Risk Flags

Cost Overruns Potential (CPFF)
Scope Creep Risk (Long Duration)
Broad Service Definition (NAICS 561990)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.8 million to LOCKHEED MARTIN CORPORATION. SSE 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 $22.8 million.

What is the period of performance?

Start: 2022-04-01. End: 2026-03-31.

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 extensive experience in providing a wide array of support services to the Department of Defense and other government agencies. Their track record includes managing complex logistics, technical support, maintenance, and operational assistance for various defense platforms and programs. While specific details on past performance for identical 'All Other Support Services' contracts are not provided here, the company's overall history suggests a capacity to handle large-scale, critical service delivery. Performance reviews and past performance evaluations from previous contracts would offer a more granular understanding of their success rates, cost management, and adherence to schedules in similar engagements.

How does the $22.8 million contract value compare to similar support service contracts awarded by SOCOM?

Comparing the $22.8 million contract value requires access to a database of similar contracts awarded by the U.S. Special Operations Command (SOCOM) for 'All Other Support Services' or comparable categories. Without such a benchmark, it's difficult to definitively state whether this value is high, low, or average. However, given that Lockheed Martin is the prime contractor and the contract duration is approximately four years, the annual value is roughly $5.7 million. This figure should be assessed against the scope and complexity of the services required. Larger, more complex support contracts for SOCOM can easily reach tens or hundreds of millions of dollars, while smaller, more specialized ones might be in the single-digit millions. Therefore, $22.8 million appears to be a moderate-sized award within the context of defense support services.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for support services?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract, like the one awarded to Lockheed Martin, revolve around cost control and potential for contractor inefficiency. In a CPFF structure, the government reimburses the contractor for all allowable costs incurred, plus a predetermined fixed fee representing profit. The risk for the government is that the contractor may have less incentive to control costs, as their profit is fixed regardless of the actual expenses. This can lead to cost overruns if the contractor is not diligent in managing resources or if unforeseen issues arise. The government bears the financial risk of cost increases. To mitigate this, robust oversight, detailed cost tracking, and clear performance metrics are essential to ensure the contractor operates efficiently and delivers the required services within reasonable cost parameters.

What is the significance of the 'All Other Support Services' NAICS code (561990) in understanding the contract's scope?

The NAICS code 561990, 'All Other Support Services,' is a broad classification that indicates the contract encompasses a diverse range of non-classified support activities. This code is used when a business provides support services that do not fit into more specific industry categories. For this contract, it suggests that the services could include a variety of functions such as administrative support, facilities management, operational assistance, or other specialized services not otherwise defined. The broadness of this code means that the specific nature and value of the services delivered are highly dependent on the detailed statement of work within the contract itself. It implies a need for careful review of the contract's specific deliverables to fully understand its scope and impact.

How does the contract's duration (1460 days) influence its overall value and risk profile?

A duration of 1460 days, equivalent to approximately four years, significantly influences the contract's overall value and risk profile. For value, it indicates a sustained, long-term requirement for the services being provided, suggesting a strategic importance to the U.S. Special Operations Command. This duration allows for potential economies of scale and the development of specialized expertise by the contractor. From a risk perspective, a longer duration increases the potential for scope creep, changes in requirements, and market fluctuations that could impact costs. It also means that the government is committed to a significant period, necessitating thorough initial planning and ongoing performance monitoring to ensure continued value and alignment with evolving needs. The fixed fee component helps stabilize contractor profit over this extended period.

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: $34,899,316

Exercised Options: $22,836,332

Current Obligation: $22,836,332

Subaward Activity

Number of Subawards: 15

Total Subaward Amount: $13,959,506

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