DoD's $37.4M contract for support services awarded to Lockheed Martin Corporation shows fair value
Contract Overview
Contract Amount: $37,419,813 ($37.4M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2023-04-01
End Date: 2024-03-31
Contract Duration: 365 days
Daily Burn Rate: $102.5K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: LMR SPT FY23
Place of Performance
Location: FORT CAMPBELL, CHRISTIAN County, KENTUCKY, 42223
State: Kentucky Government Spending
Plain-Language Summary
Department of Defense obligated $37.4 million to LOCKHEED MARTIN CORPORATION for work described as: LMR SPT FY23 Key points: 1. Contract awarded to a single, large defense contractor, indicating a focus on established capabilities. 2. Pricing appears competitive when benchmarked against similar support service contracts. 3. No significant risk indicators identified in the contract terms or contractor history. 4. Performance context suggests a need for specialized support within U.S. Special Operations Command. 5. This contract fits within the broader defense sector's spending on support services.
Value Assessment
Rating: good
The contract's value of approximately $37.4 million for a one-year period appears reasonable when compared to similar support service contracts awarded by the Department of Defense. Benchmarking against industry standards for specialized support services suggests that the pricing is within an acceptable range, indicating fair value for the services rendered. The Cost Plus Fixed Fee (CPFF) contract type allows for flexibility while maintaining cost control through a fixed fee.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, suggesting that multiple bidders had the opportunity to submit proposals. The specific number of bidders is not detailed, but the full and open nature implies a competitive process that should drive price discovery and ensure the government receives competitive offers. This approach is generally favored for maximizing value and ensuring a broad range of potential contractors can participate.
Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it fosters a competitive environment, which typically leads to more favorable pricing and a wider selection of qualified contractors, ultimately optimizing the use of public funds.
Public Impact
The U.S. Special Operations Command benefits from specialized support services crucial for its operations. This contract ensures the delivery of essential support functions, maintaining operational readiness. The contract's performance is likely concentrated in Kentucky, where the contractor's facility is located. Workforce implications include employment opportunities for individuals with specialized support skills in the defense sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Positive Signals
- Awarded through full and open competition, indicating a robust bidding process.
- Contractor is a well-established entity with a significant track record in defense contracting.
- Contract type (CPFF) allows for cost flexibility while managing overall expenditure.
- Performance period is clearly defined, facilitating project management and oversight.
Sector Analysis
The defense sector is a significant area of federal spending, with a substantial portion allocated to support services that enable military operations. This contract for 'All Other Support Services' falls under a broad category that encompasses a wide range of professional, technical, and management support. Spending in this area is often driven by the need for specialized expertise that government personnel may not possess internally, or to augment existing capabilities. Comparable spending benchmarks for similar support services within the defense industry can vary widely based on the specific nature of the services and the complexity of the operational environment.
Small Business Impact
This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The award to a large prime contractor like Lockheed Martin suggests that the primary focus was on the prime contractor's capabilities. This means that opportunities for small businesses to participate in this specific contract may be limited unless they are part of the prime contractor's supply chain or are engaged in separate, smaller contracts.
Oversight & Accountability
Oversight for this contract would typically be managed by the U.S. Special Operations Command contracting office, with potential involvement from the Department of Defense's Inspector General for audits and investigations. Transparency is facilitated through contract award databases, and accountability measures are embedded in the contract terms, including performance standards and reporting requirements. The CPFF structure also necessitates careful monitoring of costs.
Related Government Programs
- Department of Defense Support Services Contracts
- Special Operations Command Procurement
- Lockheed Martin Corporation Contracts
- Cost Plus Fixed Fee Contracts
- All Other Support Services
Tags
defense, department-of-defense, lockheed-martin-corporation, support-services, full-and-open-competition, cost-plus-fixed-fee, delivery-order, special-operations-command, kentucky, fy23
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $37.4 million to LOCKHEED MARTIN CORPORATION. LMR SPT 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 $37.4 million.
What is the period of performance?
Start: 2023-04-01. End: 2024-03-31.
What is Lockheed Martin Corporation's track record with the Department of Defense, particularly in providing support services?
Lockheed Martin Corporation is a major defense contractor with an extensive history of performing various services for the Department of Defense (DoD). Their track record includes a wide array of support services, encompassing logistics, maintenance, technical support, and program management across numerous platforms and systems. The company consistently secures large contracts from the DoD, reflecting its established presence and capabilities in the defense sector. While specific performance metrics for individual contracts are often proprietary or detailed in internal DoD reports, Lockheed Martin's continued success in winning competitive bids suggests a generally positive performance history and a strong reputation for delivering on complex defense requirements. However, like any large contractor, they may have faced scrutiny or performance issues on specific projects, which would be detailed in contract performance evaluations and oversight reports.
How does the Cost Plus Fixed Fee (CPFF) contract type influence cost control and contractor incentive for this specific award?
The Cost Plus Fixed Fee (CPFF) contract type is designed to provide flexibility for contracts where the scope of work may evolve or is difficult to define precisely at the outset, such as complex support services. Under CPFF, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing their profit. This structure incentivizes the contractor to manage costs effectively, as the fee remains constant regardless of the final cost of the contract. However, it also places a significant oversight burden on the government to ensure that all costs claimed are reasonable, allocable, and allowable. Unlike fixed-price contracts, there is less direct financial incentive for the contractor to aggressively reduce costs beyond what is necessary to complete the work, as their profit is fixed. Therefore, robust government oversight and detailed cost accounting are crucial to ensure value for money.
What are the potential risks associated with awarding support services contracts to large, established defense contractors like Lockheed Martin?
Awarding support services contracts to large, established defense contractors like Lockheed Martin can present several potential risks. One primary risk is contractor lock-in, where the contractor's deep integration into existing systems and processes makes it difficult and costly for the government to switch providers. This can reduce future competition and potentially lead to higher prices over time. Another risk is complacency, where a contractor, confident in their established position, may not be as motivated to innovate or optimize service delivery. Furthermore, the sheer size and complexity of these contractors can sometimes lead to challenges in oversight and accountability, making it harder for the government to identify and address performance issues promptly. Finally, there's the risk of cost overruns, especially in CPFF contracts, if government oversight is not sufficiently rigorous in scrutinizing allowable costs.
What is the typical duration and value range for similar 'All Other Support Services' contracts within the Department of Defense?
The duration and value range for 'All Other Support Services' contracts within the Department of Defense can vary significantly depending on the specific services required, the complexity of the task, and the duration of the need. Contracts can range from short-term, project-specific engagements lasting a few months to multi-year Indefinite Delivery/Indefinite Quantity (IDIQ) contracts that can extend for five years or more, often with option periods. Values can range from tens of thousands of dollars for niche services to hundreds of millions or even billions of dollars for comprehensive support packages. The $37.4 million awarded to Lockheed Martin for a one-year period for 'All Other Support Services' appears to be within a moderate range for specialized support, particularly given the contractor's scale and the potential criticality of the services to U.S. Special Operations Command.
How does the geographic location (Kentucky) of the contractor's facility impact the execution and oversight of this contract?
The geographic location of the contractor's facility in Kentucky (ST, SN) can influence the execution and oversight of this contract in several ways. For execution, it means that the contractor's personnel and resources are based in that region, potentially impacting local employment and the regional economy. It also means that any on-site support or integration activities required at government facilities would involve travel from Kentucky. For oversight, the proximity of the contractor's facility to any relevant government oversight offices or contracting officer representatives (CORs) can affect the ease and frequency of site visits, inspections, and direct communication. If government oversight personnel are located far from Kentucky, it might necessitate more reliance on remote monitoring, video conferencing, and detailed reporting, potentially increasing the complexity and cost of oversight. Conversely, if government personnel are co-located or nearby, it can facilitate more direct and efficient oversight.
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: $37,419,813
Exercised Options: $37,419,813
Current Obligation: $37,419,813
Actual Outlays: $10,833
Subaward Activity
Number of Subawards: 7
Total Subaward Amount: $2,370,569
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: 2023-04-01
Current End Date: 2024-03-31
Potential End Date: 2024-03-31 00:00:00
Last Modified: 2025-03-27
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