DoD's $12.8M SPEAR FWD FY23 contract awarded to Lockheed Martin for support services

Contract Overview

Contract Amount: $12,820,606 ($12.8M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2023-01-15

End Date: 2026-01-14

Contract Duration: 1,095 days

Daily Burn Rate: $11.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: SPEAR FWD FY23

Place of Performance

Location: LEXINGTON, FAYETTE County, KENTUCKY, 40516

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $12.8 million to LOCKHEED MARTIN CORPORATION for work described as: SPEAR FWD FY23 Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 3. The duration of 1095 days indicates a long-term need for these support services. 4. The contract was awarded as a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 5. The North American Industry Classification System (NAICS) code 561990 covers 'All Other Support Services,' a broad category. 6. The contract is not set aside for small businesses, meaning larger firms were likely the primary bidders.

Value Assessment

Rating: fair

Benchmarking the value of this $12.8 million contract is challenging without more specific details on the services provided. The Cost Plus Fixed Fee (CPFF) contract type introduces inherent risk for cost control, as the contractor is reimbursed for allowable costs plus a fixed fee. This contrasts with fixed-price contracts where the contractor bears more cost risk. Without comparable contract data for similar support services within the U.S. Special Operations Command (USSOCOM), it's difficult to definitively assess if the pricing represents good value for money. The fixed fee component, however, should provide some incentive for the contractor to manage costs efficiently.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but this method generally fosters a competitive environment. A competitive process is expected to drive down prices and encourage innovation as contractors vie for the award. The fact that it was competed openly suggests that the government sought the best possible solution and price from the market.

Taxpayer Impact: Taxpayers benefit from full and open competition through potentially lower prices and a wider range of innovative solutions being considered. This process aims to ensure that government funds are used efficiently by leveraging market forces to achieve the best value.

Public Impact

This contract directly supports the U.S. Special Operations Command (USSOCOM), enhancing their operational capabilities. The services provided are categorized under 'All Other Support Services,' which could encompass a wide range of activities critical to SOCOM's mission. The contract's performance is based in Kentucky (ST: KY, SN: KENTUCKY), suggesting a potential impact on the local workforce and economy in that region. The duration of the contract implies sustained support for ongoing special operations requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not rigorously managed.
The broad NAICS code (561990) makes it difficult to ascertain the exact nature and scope of services without further detail.
Lack of specific performance metrics or deliverables in the provided data hinders a precise assessment of service effectiveness.
The contract is a delivery order, suggesting it might be part of a larger, potentially less transparent, IDIQ vehicle.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
The fixed fee component in the CPFF contract provides a defined profit margin, offering some cost predictability.
The contract has a clear start and end date, providing a defined period for service delivery.
The contract is being performed in Kentucky, potentially creating or sustaining jobs in that state.

Sector Analysis

The defense support services sector is a significant component of federal spending, encompassing a wide array of services from logistics and maintenance to specialized technical support. This contract, falling under NAICS code 561990 ('All Other Support Services'), operates within this broad category. The U.S. Special Operations Command (USSOCOM) is a major consumer of such services, requiring specialized support to maintain readiness and execute complex missions. Comparable spending benchmarks are difficult to establish without knowing the precise nature of the 'support services,' but the overall defense support services market is valued in the tens of billions of dollars annually.

Small Business Impact

This contract was not set aside for small businesses, as indicated by 'sb': false. This suggests that the scope and nature of the services likely required capabilities typically found in larger defense contractors. Consequently, there may be limited direct subcontracting opportunities for small businesses unless Lockheed Martin voluntarily includes them in their supply chain. The absence of a small business set-aside means the primary focus was on securing the best offer from the broader market, potentially overlooking opportunities to foster small business growth within this specific contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the U.S. Special Operations Command (USSOCOM) and potentially the Department of Defense's Inspector General. As a Cost Plus Fixed Fee (CPFF) contract, rigorous oversight of allowable costs and the contractor's performance is crucial to ensure value for money and prevent cost overruns. Transparency is facilitated by the contract being awarded through full and open competition, which requires publicizing the award. However, detailed reporting on specific expenditures and performance metrics may be subject to standard government contracting confidentiality.

Related Government Programs

Department of Defense Support Services
Special Operations Forces Support
Indefinite Delivery/Indefinite Quantity (IDIQ) Contracts
Cost Plus Fixed Fee Contracts

Risk Flags

Cost Plus Fixed Fee contract type carries inherent risk of cost overruns.
Broad NAICS code limits understanding of specific services and associated risks.
Lack of detailed performance metrics hinders risk assessment.
Delivery Order implies potential complexity within a larger IDIQ structure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.8 million to LOCKHEED MARTIN CORPORATION. SPEAR FWD FY23

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 $12.8 million.

What is the period of performance?

Start: 2023-01-15. End: 2026-01-14.

What specific support services are being provided under this contract?

The provided data indicates the contract falls under NAICS code 561990, 'All Other Support Services.' This is a broad classification that can encompass a wide range of activities, including but not limited to administrative support, facilities management, logistics support, technical assistance, and specialized operational support. Without further details from the contract award documentation or performance work statement (PWS), the exact nature of the services remains unspecified. For the U.S. Special Operations Command (USSOCOM), these services could be critical for enabling mission readiness, maintaining equipment, providing logistical backbone, or offering specialized technical expertise crucial for special operations missions. Understanding the precise services is key to evaluating the contract's necessity and value.

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

The Cost Plus Fixed Fee (CPFF) contract type reimburses the contractor for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is often used when the scope of work is not precisely defined or involves a high degree of uncertainty, making fixed-price contracts impractical. Compared to fixed-price contracts, CPFF shifts more cost risk to the government. However, it provides the contractor with an incentive to control costs, as their fee is fixed regardless of the final cost. For similar support services, other contract types like Firm-Fixed-Price (FFP) might be used if the scope is well-defined, offering greater cost certainty to the government but placing more risk on the contractor. Cost-Plus-Incentive-Fee (CPIF) contracts also share cost-reimbursement elements but include incentives for meeting cost, schedule, or performance targets, potentially offering better value than CPFF if performance metrics are clearly defined and achievable.

What is the historical spending pattern for SPEAR FWD or similar support services by USSOCOM?

Analyzing historical spending patterns for 'SPEAR FWD' or similar support services by USSOCOM is crucial for context. Without specific historical data linked to this contract name or its predecessors, a direct comparison is difficult. However, USSOCOM consistently requires extensive support services to maintain its global operational tempo and technological edge. Spending in this category typically fluctuates based on evolving threats, technological advancements, and strategic priorities. Examining past awards for 'support services' under broad NAICS codes like 561990, or specific mission-critical support functions, would reveal trends in contract values, durations, and awarded contractors. A significant increase or decrease in spending on such services could indicate shifts in operational tempo, budget allocations, or the adoption of new support models. Understanding this history helps assess whether the current $12.8 million award is consistent with past investments or represents a notable change.

What are the potential risks associated with Lockheed Martin's performance on this contract?

Potential risks associated with Lockheed Martin's performance on this contract, while generally a reputable contractor, include challenges inherent in the CPFF structure and the broad nature of the services. Cost overruns are a primary risk; if allowable costs escalate beyond initial projections, the government bears the burden, potentially exceeding the anticipated value. Performance risks could arise if the undefined 'support services' are complex or require specialized expertise that proves difficult to deliver consistently. Schedule delays are also a concern, especially if unforeseen issues impact the delivery of critical support. Furthermore, the lack of specific performance metrics in the provided data makes it harder to proactively identify and mitigate performance shortfalls. Effective oversight and clear communication channels will be vital to managing these risks throughout the contract's duration.

How does the geographic location (Kentucky) influence the contract's impact?

The contract's performance location in Kentucky (ST: KY, SN: KENTUCKY) has several potential implications. Firstly, it suggests a direct economic impact on the state through job creation, both directly with Lockheed Martin and potentially through local suppliers and service providers. This could stimulate local economies and provide employment opportunities. Secondly, the presence of a significant defense contract in Kentucky may foster a local ecosystem of defense-related businesses and skilled labor. However, it also means that the benefits of this federal spending are concentrated geographically. If the services could have been performed elsewhere with similar or better outcomes, the concentration in Kentucky might raise questions about optimal resource allocation from a national perspective, though proximity to specific operational needs or existing infrastructure could justify the location.

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: $13,529,729

Exercised Options: $12,820,606

Current Obligation: $12,820,606

Subaward Activity

Number of Subawards: 14

Total Subaward Amount: $5,040,748

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