DoD awards $17.4M CPFF contract to Lockheed Martin for support services in Kentucky
Contract Overview
Contract Amount: $17,379,121 ($17.4M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2023-02-16
End Date: 2026-02-16
Contract Duration: 1,096 days
Daily Burn Rate: $15.9K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Official Description: CPFF - BASE PERIOD AWARD
Place of Performance
Location: LEXINGTON, FAYETTE County, KENTUCKY, 40516
State: Kentucky Government Spending
Plain-Language Summary
Department of Defense obligated $17.4 million to LOCKHEED MARTIN CORPORATION for work described as: CPFF - BASE PERIOD AWARD Key points: 1. Contract awarded on a Cost Plus Fixed Fee basis, indicating potential for cost overruns if not managed closely. 2. The contract duration of 1096 days suggests a long-term need for these support services. 3. Awarded by U.S. Special Operations Command, highlighting a focus on specialized defense needs. 4. The North American Industry Classification System (NAICS) code 561990 covers 'All Other Support Services,' a broad category. 5. The contract was awarded through full and open competition, suggesting a competitive bidding process. 6. The contractor, Lockheed Martin Corporation, is a major defense contractor with extensive experience. 7. The contract is a delivery order, implying it is part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar vehicle.
Value Assessment
Rating: fair
The Cost Plus Fixed Fee (CPFF) contract type allows for cost reimbursement plus a fixed fee, which can incentivize contractors to control costs but also carries the risk of cost escalation. Without detailed cost breakdowns and performance metrics, it is difficult to benchmark the value for money. Comparing this to similar support service contracts awarded by SOCOM or other defense agencies would be necessary for a more precise assessment of pricing and value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'FULL AND OPEN COMPETITION,' indicating that all responsible sources were permitted to submit bids. The number of bidders is not specified, but this method generally promotes price discovery and allows the government to select the best value. The open competition suggests a healthy market for these types of support services.
Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing, as multiple companies vied for the contract. This process aims to ensure that the government is not overpaying for the services rendered.
Public Impact
This contract will provide essential support services to U.S. Special Operations Command, contributing to national security objectives. The services delivered are likely to be critical for the operational readiness and effectiveness of special operations forces. The geographic impact is focused on Kentucky, where the services will be performed. While specific workforce implications are not detailed, such contracts can support skilled labor within the defense support services sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- CPFF contract type can lead to higher costs if not rigorously managed.
- Broad NAICS code 'All Other Support Services' lacks specificity, making it harder to assess the exact nature and necessity of the services.
- Lack of detail on the number of bidders in the full and open competition limits understanding of the competitive intensity.
- The contract duration of nearly three years suggests a significant commitment of resources.
Positive Signals
- Awarded through full and open competition, indicating a competitive process.
- Contractor is Lockheed Martin Corporation, a reputable and experienced defense contractor.
- Contract is a delivery order, suggesting it aligns with a pre-established contracting vehicle, potentially streamlining acquisition.
- Contract performance is located in Kentucky, potentially supporting local economic activity.
Sector Analysis
This contract falls within the broader 'Professional, Scientific, and Technical Services' sector, specifically under 'All Other Support Services.' This sector is a significant component of federal spending, encompassing a wide range of specialized services. The market for defense support services is substantial, with major contractors like Lockheed Martin playing a key role. Benchmarking this contract would involve comparing its cost structure and scope to similar support service contracts awarded to other large defense firms by agencies like SOCOM or the Department of Defense.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a small business set-aside. However, as Lockheed Martin is a large prime contractor, there may be opportunities for small businesses to subcontract indirectly, depending on the specific nature of the support services required and the company's subcontracting plans.
Oversight & Accountability
Oversight for this contract would primarily reside with the U.S. Special Operations Command, the awarding agency. As a Cost Plus Fixed Fee contract, rigorous financial oversight and performance monitoring are crucial to ensure that costs are reasonable and the fixed fee is earned. Transparency would be enhanced by public reporting of expenditures and performance metrics. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Department of Defense Support Services
- Special Operations Command Procurement
- Cost Plus Fixed Fee Contracts
- Professional, Scientific, and Technical Services
Risk Flags
- CPFF contract type requires close monitoring to manage costs.
- Broad NAICS code lacks specificity, potentially impacting service clarity and value assessment.
- No small business set-aside noted, limiting direct small business participation opportunities.
Tags
defense, department-of-defense, u.s.-special-operations-command, lockheed-martin-corporation, cost-plus-fixed-fee, delivery-order, full-and-open-competition, support-services, kentucky, naics-561990, large-business
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $17.4 million to LOCKHEED MARTIN CORPORATION. CPFF - BASE PERIOD 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 $17.4 million.
What is the period of performance?
Start: 2023-02-16. End: 2026-02-16.
What is the specific nature of the 'All Other Support Services' being provided under this contract?
The provided data identifies the NAICS code as 561990, which broadly covers 'All Other Support Services.' This classification is very general and does not specify the exact services rendered. These could range from administrative support, logistics, technical assistance, facility management, or other specialized operational support required by the U.S. Special Operations Command. Without further details from the contract award notice or associated documentation, the precise nature of these services remains undefined. Understanding the specific services is crucial for assessing their necessity, effectiveness, and value for money.
How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for similar services, and what are the associated risks?
The CPFF structure is often used when the scope of work is not precisely defined or when there is a high degree of uncertainty in the costs. It reimburses the contractor for allowable costs and pays a fixed fee representing profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers more flexibility but carries a higher risk of cost overruns if the government does not maintain strong oversight. FFP contracts provide greater cost certainty for the government but may require a more detailed initial scope of work. For support services, the choice between CPFF and FFP depends on the predictability of the work and the government's risk tolerance. The primary risk with CPFF is that the contractor has less incentive to control costs beyond what is necessary to earn their fee, potentially leading to higher overall expenditures than anticipated.
What is Lockheed Martin Corporation's track record with CPFF contracts and support services for the U.S. Special Operations Command?
Lockheed Martin Corporation is a major defense contractor with extensive experience across various contract types, including CPFF, and has a long-standing relationship with the Department of Defense and its various components, including U.S. Special Operations Command (SOCOM). While specific details on their performance with CPFF contracts for SOCOM are not provided in this data snippet, the company's size and scope suggest they possess the infrastructure and expertise to manage such agreements. Historically, large defense contractors are awarded a significant portion of CPFF contracts due to the complexity and scale of the services they provide. A deeper analysis would involve reviewing past performance evaluations, contract modifications, and any documented issues or successes related to Lockheed Martin's previous CPFF awards with SOCOM or similar entities.
What are the potential implications of awarding a broad 'All Other Support Services' contract through full and open competition?
Awarding a broad 'All Other Support Services' contract through full and open competition means that the government sought bids from any qualified vendor. This approach can foster competition and potentially lead to better pricing and innovation. However, the broad nature of the NAICS code (561990) can obscure the specific requirements, making it challenging for potential bidders to tailor their proposals precisely and for the government to ensure it is receiving the most appropriate and cost-effective services. While competition is generally beneficial, the lack of specificity in the service description might lead to a wider range of proposed solutions, requiring careful evaluation by the government to ensure the selected services align with SOCOM's needs and offer the best value.
How does the $17.4 million award compare to historical spending on similar support services by the U.S. Special Operations Command?
The $17.4 million award for a period of approximately three years (1096 days) represents an average annual value of roughly $5.8 million. To assess this in context, one would need to compare it against SOCOM's historical spending on 'All Other Support Services' or similar broad service categories. SOCOM's overall budget is substantial, and this contract amount, while significant, may represent a small fraction of their total expenditure. Benchmarking would involve analyzing trends in SOCOM's procurement of support services, average contract values for similar scopes of work, and the number of contracts awarded annually within this service category. Without access to SOCOM's historical spending data and detailed contract databases, a precise comparison is not feasible.
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: $18,885,767
Exercised Options: $18,885,767
Current Obligation: $17,379,121
Subaward Activity
Number of Subawards: 31
Total Subaward Amount: $9,417,877
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: 2023-02-16
Current End Date: 2026-02-16
Potential End Date: 2026-02-16 00:00:00
Last Modified: 2025-09-24
More Contracts from Lockheed Martin Corporation
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Department of Defense)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Department of Defense)
- THE Purpose of This Modification IS to Award F-35A Lrip 15 Usaf Aircraft* Long Lead Funding — $30.1B (Department of Defense)
- THE Purpose of This Contract IS to Award Long Lead Funding for F-35A, F-35B, and F-35C Aircraft for U.S. Services, Non-Dod Partners, and FMS Customers — $24.5B (Department of Defense)
- Lrip 11 AAC — $12.3B (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)