DoD's $30.5M SPEAR LCSM contract awarded to Lockheed Martin for specialized support services

Contract Overview

Contract Amount: $30,526,239 ($30.5M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2023-01-16

End Date: 2026-01-15

Contract Duration: 1,095 days

Daily Burn Rate: $27.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: SPEAR LCSM

Place of Performance

Location: LEXINGTON, FAYETTE County, KENTUCKY, 40516

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $30.5 million to LOCKHEED MARTIN CORPORATION for work described as: SPEAR LCSM Key points: 1. Contract value represents a significant investment in specialized support services for U.S. Special Operations Command. 2. The award to a single, large contractor suggests a focus on established capabilities and potentially higher unit costs. 3. The Cost Plus Fixed Fee (CPFF) structure introduces potential for cost overruns if not closely managed. 4. The contract duration of three years indicates a medium-term need for these services. 5. The absence of small business set-asides may limit opportunities for smaller firms in this specific contract. 6. The geographic location of performance in Kentucky is noted.

Value Assessment

Rating: fair

Benchmarking the value of this $30.5 million contract is challenging without specific service details. However, CPFF contracts can sometimes lead to higher overall costs compared to fixed-price arrangements if not meticulously managed. The award to Lockheed Martin, a major defense contractor, suggests a competitive bid process, but the final price is influenced by the cost-plus nature. Further analysis would require comparing the specific services rendered against industry standards and similar support contracts within the Special Operations Command.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The specific number of bidders is not provided, but this approach generally fosters price discovery and allows the government to select the best value. The fact that it was competed openly suggests that the government sought a range of solutions and pricing, even if the ultimate award went to a single entity.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the most competitive pricing and best overall value by allowing a wide range of potential contractors to bid.

Public Impact

The primary beneficiaries are U.S. Special Operations Command personnel who will receive specialized support services. The contract supports critical operational readiness and effectiveness for special operations forces. The services delivered are likely to be highly specialized, tailored to the unique requirements of SOCOM. The contract's performance is located in Kentucky, potentially impacting the local workforce and economy in that region. The duration of the contract suggests sustained support for ongoing special operations missions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can incentivize contractor to increase costs to maximize profit.
Lack of specific details on performance metrics makes it difficult to assess efficiency and effectiveness.
The contract is awarded to a single large prime contractor, potentially limiting subcontracting opportunities for small businesses.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process.
The contract is for specialized support services, indicating a focus on critical mission requirements.
The contractor, Lockheed Martin, is a well-established entity with significant experience in defense contracting.

Sector Analysis

This contract falls within the broader defense support services sector, which is a substantial part of federal spending. The market for specialized support services for elite military units is often concentrated among a few large, experienced contractors. Benchmarking spending requires comparing this contract's value and scope against similar support services procured by other branches of the military or defense agencies for comparable units.

Small Business Impact

This contract does not appear to have a small business set-aside. The award to Lockheed Martin, a large prime contractor, suggests that small businesses are unlikely to be directly involved as prime contractors on this specific award. However, there may be opportunities for small businesses to participate as subcontractors, depending on Lockheed Martin's subcontracting plan, which is not detailed here.

Oversight & Accountability

Oversight for this contract will likely be managed by the U.S. Special Operations Command contracting office and potentially the Department of Defense's Inspector General. Transparency is facilitated by the contract award being publicly available. Accountability measures would be embedded within the CPFF contract terms, requiring the contractor to justify costs and meet performance standards. Regular reporting and audits are standard oversight mechanisms for such contracts.

Related Government Programs

Special Operations Forces Support Contracts
Defense Logistics and Support Services
Information Technology Support Services (if applicable)
Professional Services Contracts

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type carries inherent risk of cost escalation.
Broad 'All Other Support Services' classification may lead to scope creep and unclear performance metrics.
Lack of small business participation directly on the prime contract.
Performance location in a single state may concentrate economic impact.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.5 million to LOCKHEED MARTIN CORPORATION. SPEAR 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 $30.5 million.

What is the period of performance?

Start: 2023-01-16. End: 2026-01-15.

What specific services does the SPEAR LCSM contract encompass?

The provided data indicates the contract is for 'All Other Support Services' under NAICS code 561990. While the specific 'SPEAR LCSM' acronym is not fully defined, it likely pertains to specialized support, logistics, or command services for U.S. Special Operations Command (SOCOM). These services could range from technical support, maintenance, training, operational planning assistance, to administrative functions critical for SOCOM's unique missions. Without further details, the exact nature of the support remains broad, but the context implies highly specialized and critical functions.

How does the Cost Plus Fixed Fee (CPFF) structure impact potential cost overruns?

The Cost Plus Fixed Fee (CPFF) contract structure means the contractor is reimbursed for allowable costs plus a fixed fee representing profit. While the fee is fixed, the total cost can increase if the contractor's actual costs exceed initial estimates. This structure can incentivize contractors to be efficient to keep costs down, thereby protecting their fixed profit margin. However, it also places a significant burden on the government to meticulously audit and verify all claimed costs to prevent unnecessary spending. Close monitoring and robust cost controls by the contracting agency are crucial to mitigate the risk of cost overruns inherent in CPFF agreements.

What is the typical track record of Lockheed Martin in providing similar support services?

Lockheed Martin Corporation is a major global defense contractor with extensive experience across a wide array of military support services, including logistics, technical support, systems integration, and program management. They have a long history of serving U.S. Special Operations Command and other branches of the Department of Defense. Their track record generally includes managing large, complex contracts, often involving advanced technologies and specialized operational requirements. While specific performance on every contract varies, Lockheed Martin is recognized for its capacity to handle significant defense procurements.

How does this contract's value compare to other similar support service contracts within the DoD?

Comparing this $30.5 million contract requires understanding the specific scope and duration of services. DoD procures a vast range of support services, from IT and maintenance to specialized operational support. Contracts for elite units like SOCOM can command higher values due to the unique requirements and expertise involved. Without detailed service breakdowns, a direct comparison is difficult. However, $30.5 million over three years for specialized support is within the typical range for significant, but not exceptionally large, service contracts awarded to major defense contractors for niche capabilities.

What are the potential risks associated with the 'All Other Support Services' classification?

The classification 'All Other Support Services' (NAICS 561990) is broad and can encompass a wide variety of functions, making it difficult to precisely define the contract's scope and associated risks without further detail. This ambiguity can pose risks such as scope creep, where the services provided expand beyond the original intent, potentially increasing costs. It also makes performance monitoring and evaluation more challenging for the government. Ensuring clear deliverables, performance metrics, and robust oversight is critical to manage the inherent risks of such a broadly defined service category.

What is the historical spending pattern for SPEAR LCSM or similar services by U.S. Special Operations Command?

Historical spending data for 'SPEAR LCSM' specifically is not readily available in the provided information. However, U.S. Special Operations Command (SOCOM) consistently invests significant funds in specialized support services to maintain the readiness and effectiveness of its unique operational units. Spending patterns typically reflect evolving mission requirements, technological advancements, and the need for highly skilled personnel. SOCOM's budget often includes substantial allocations for training, equipment sustainment, intelligence support, and operational logistics, making contracts like this a recurring component of their procurement strategy.

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: $30,526,239

Exercised Options: $30,526,239

Current Obligation: $30,526,239

Actual Outlays: $401,967

Subaward Activity

Number of Subawards: 18

Total Subaward Amount: $1,816,751

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