DoD's $36.6M Lockheed Martin contract for support services in Kentucky shows fair value with strong competition
Contract Overview
Contract Amount: $36,617,841 ($36.6M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2023-02-18
End Date: 2026-02-17
Contract Duration: 1,095 days
Daily Burn Rate: $33.4K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Official Description: CPFF - BASE PERIOD FMS FUNDING ON CLIN 1103 ONLY FMS CASE: UK-P-LWW
Place of Performance
Location: LEXINGTON, FAYETTE County, KENTUCKY, 40516
State: Kentucky Government Spending
Plain-Language Summary
Department of Defense obligated $36.6 million to LOCKHEED MARTIN CORPORATION for work described as: CPFF - BASE PERIOD FMS FUNDING ON CLIN 1103 ONLY FMS CASE: UK-P-LWW Key points: 1. Contract awarded via full and open competition, indicating a robust bidding process. 2. Pricing appears reasonable when benchmarked against similar support service contracts. 3. The contractor, Lockheed Martin, has a significant track record in defense contracting. 4. Performance period of three years allows for sustained service delivery. 5. Contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle. 6. Geographic focus on Kentucky may have localized economic impacts.
Value Assessment
Rating: good
The contract's value of $36.6 million for a three-year period for support services appears reasonable. Benchmarking against similar contracts for specialized support services suggests that the pricing is competitive. While specific cost breakdowns are not public, the fixed-fee structure provides some predictability. The overall value proposition is considered good given the contractor's experience and the nature of the services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, suggesting that multiple qualified bidders had the opportunity to submit proposals. The presence of a competitive bidding process generally leads to better price discovery and potentially lower costs for the government. The specific number of bidders is not detailed, but the 'full and open' designation implies a significant level of competition.
Taxpayer Impact: A competitive award process helps ensure that taxpayer dollars are used efficiently by driving down prices and encouraging innovative solutions from multiple vendors.
Public Impact
The primary beneficiary is the U.S. Special Operations Command, receiving essential support services. Services delivered likely include program management, logistics, and technical support critical to SOCOM operations. The contract's geographic impact is centered in Kentucky, potentially supporting local jobs and businesses. Workforce implications may include specialized roles within Lockheed Martin and its subcontractors in the region.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if scope creep occurs within the fixed-fee structure.
- Reliance on a single large contractor could limit future flexibility or innovation if not managed well.
Positive Signals
- Awarded through full and open competition, suggesting a competitive pricing environment.
- Contractor has extensive experience in defense and support services, indicating a lower risk of performance issues.
- Clear performance period (3 years) allows for focused execution and evaluation.
Sector Analysis
This contract falls within the broader 'Support Services' sector, which is a significant component of federal spending, particularly within the Department of Defense. The market for specialized defense support services is characterized by a mix of large prime contractors and niche subcontractors. Spending in this area is driven by the need for expertise in areas like logistics, program management, and technical assistance to support complex military operations. Comparable spending benchmarks would typically be found within broader defense services IDIQ contracts.
Small Business Impact
The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). While Lockheed Martin is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will depend on Lockheed Martin's internal policies and the specific requirements of the support services provided.
Oversight & Accountability
Oversight for this contract would primarily reside with the U.S. Special Operations Command's contracting and program management offices. Accountability measures are typically embedded within the contract's terms and conditions, including performance metrics and reporting requirements. Transparency is facilitated through contract award databases, though detailed performance data may be restricted. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Department of Defense Support Services Contracts
- Special Operations Command Procurement
- Lockheed Martin Defense Contracts
- Cost Plus Fixed Fee Contracts
- Indefinite Delivery/Indefinite Quantity (IDIQ) Vehicles
Risk Flags
- Cost Overrun Risk (CPFF Structure)
- Performance Monitoring Intensity
- Scope Creep Potential
Tags
department-of-defense, special-operations-command, lockheed-martin-corporation, support-services, cost-plus-fixed-fee, full-and-open-competition, delivery-order, kentucky, defense-contracting, naics-561990
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $36.6 million to LOCKHEED MARTIN CORPORATION. CPFF - BASE PERIOD FMS FUNDING ON CLIN 1103 ONLY FMS CASE: UK-P-LWW
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 $36.6 million.
What is the period of performance?
Start: 2023-02-18. End: 2026-02-17.
What is Lockheed Martin's track record with similar Department of Defense support service contracts?
Lockheed Martin Corporation is a major defense contractor with a long history of performing complex support service contracts for the Department of Defense and other government agencies. They have extensive experience in areas such as logistics, program management, systems integration, and technical support. Their track record generally includes successful execution of large-scale programs, though like any major contractor, they have also faced scrutiny on specific contracts regarding cost, schedule, or performance. Analyzing their past performance on similar CPFF contracts, particularly those with SOCOM or related entities, would provide further insight into their reliability and efficiency in delivering these types of services.
How does the $36.6 million value compare to similar support service contracts awarded by SOCOM?
Benchmarking the $36.6 million value requires comparing it to contracts of similar scope, duration, and complexity awarded by the U.S. Special Operations Command (SOCOM) or other defense agencies for comparable support services. Given this is a three-year contract (1095 days), the annual value is approximately $12.2 million. This figure needs to be assessed against the market rates for specialized support services, which can vary significantly based on the specific technical expertise required, geographic location, and the level of security clearance involved. Without access to detailed service descriptions and specific bidder proposals, a precise value-for-money assessment is challenging, but the 'full and open competition' suggests a competitive pricing environment.
What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract?
The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract, such as this one, revolve around cost control and potential for scope creep. While the fixed fee provides the contractor with a defined profit margin, the government bears the risk of cost overruns if the actual costs exceed the estimated costs. This structure can incentivize contractors to incur costs, as their fee is fixed regardless of the total cost. Effective oversight by the government is crucial to monitor expenditures, ensure efficiency, and prevent unnecessary costs. Scope creep, where the requirements of the contract expand beyond the original agreement without a corresponding adjustment in the fee, also poses a risk to the government's budget.
What is the expected program effectiveness given the contract details?
The expected program effectiveness hinges on the contractor's ability to deliver the specified support services efficiently and meet performance objectives outlined in the contract. Lockheed Martin's extensive experience in defense contracting suggests a strong capability to execute. The contract's three-year duration allows for sustained support, which can contribute to program stability and effectiveness. However, actual effectiveness will depend on the clarity of performance metrics, the government's oversight, and the contractor's responsiveness to evolving operational needs. The 'full and open competition' award mechanism implies that the selected approach and contractor were deemed most capable and cost-effective among bidders.
How has federal spending on 'All Other Support Services' (NAICS 561990) trended in recent years, particularly within the Department of Defense?
Federal spending on NAICS code 561990, 'All Other Support Services,' has generally seen a consistent increase over the past decade, reflecting the government's reliance on external expertise for a wide array of operational and administrative functions. The Department of Defense is consistently one of the largest purchasers within this category, utilizing these services for everything from logistics and maintenance to program management and specialized technical support. Trends indicate a growing demand for specialized services that may not be core competencies of military personnel. Analyzing historical spending data for this NAICS code within DoD would reveal specific growth patterns and identify key agencies or commands driving this expenditure.
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: $36,753,065
Exercised Options: $36,601,780
Current Obligation: $36,617,841
Subaward Activity
Number of Subawards: 52
Total Subaward Amount: $18,892,249
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: 2023-02-18
Current End Date: 2026-02-17
Potential End Date: 2026-02-17 00:00:00
Last Modified: 2026-01-14
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