DoD's $30M+ contract for support services awarded to Lockheed Martin, highlighting potential value and competition dynamics

Contract Overview

Contract Amount: $30,032,696 ($30.0M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2023-04-01

End Date: 2026-03-31

Contract Duration: 1,095 days

Daily Burn Rate: $27.4K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: JOS SUST SPT

Place of Performance

Location: LEXINGTON, FAYETTE County, KENTUCKY, 40516

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $30.0 million to LOCKHEED MARTIN CORPORATION for work described as: JOS SUST SPT Key points: 1. Contract value of over $30 million indicates a significant investment in support services. 2. Award to a major defense contractor like Lockheed Martin suggests a focus on established capabilities. 3. The 'FULL AND OPEN COMPETITION' indicates a broad solicitation, potentially leading to competitive pricing. 4. The contract duration of 1095 days (3 years) allows for sustained support and program stability. 5. The 'COST PLUS FIXED FEE' contract type requires careful monitoring of costs to ensure value. 6. The absence of small business set-aside suggests larger prime contractors are expected to perform the work.

Value Assessment

Rating: good

The contract value of approximately $30 million over three years for 'All Other Support Services' appears reasonable given the contractor and the nature of support services often required by the Department of Defense. Benchmarking against similar large-scale support contracts is challenging without more specific service details, but the fixed fee component, despite the cost-plus structure, provides some cost control. The award to a well-established entity like Lockheed Martin suggests a certain level of expected performance and reliability, which can justify the investment.

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 fact that it was competed broadly suggests that multiple companies likely vied for this opportunity. A wide competitive field generally fosters better price discovery and can lead to more favorable terms for the government, as contractors are incentivized to offer competitive proposals to win the award.

Taxpayer Impact: A full and open competition is beneficial for taxpayers as it increases the likelihood of securing services at a competitive market price, preventing potential overpayment that could occur with less competitive solicitations.

Public Impact

The U.S. Special Operations Command (SOCOM) is the primary beneficiary, receiving essential support services. The services delivered are broadly categorized as 'All Other Support Services,' likely encompassing a range of operational, logistical, or administrative functions critical to SOCOM's mission. The contract is geographically focused on Kentucky (ST, SN), suggesting a concentration of SOCOM operations or support infrastructure in that state. The contract may have implications for the workforce, potentially creating or sustaining jobs within the support services sector, particularly in Kentucky.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus contract types can sometimes lead to cost overruns if not managed diligently.
The broad 'All Other Support Services' category makes it difficult to assess the specific value and necessity of each component without further detail.
Reliance on a single large contractor for a significant duration may limit flexibility in adapting to changing needs.

Positive Signals

Award to a reputable contractor like Lockheed Martin suggests a high likelihood of meeting performance requirements.
The full and open competition process is a positive indicator of a fair and potentially cost-effective procurement.
The fixed fee component within the cost-plus structure provides a degree of cost predictability for the government.

Sector Analysis

The defense support services sector is a substantial market within the broader government contracting landscape. Companies like Lockheed Martin are major players, offering a wide array of services from logistics and maintenance to specialized technical support. This contract, valued at over $30 million, fits within the typical spending patterns for significant support service requirements within the Department of Defense, particularly for specialized units like U.S. Special Operations Command. Comparable contracts in this space often involve long durations and substantial values due to the critical nature of the support provided.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses (sb: false). This suggests that the scope and requirements of the 'All Other Support Services' were likely deemed to be beyond the capacity or specialization of small businesses, or that the prime contractor is expected to manage any subcontracting opportunities. Without specific subcontracting plans or goals, the direct impact on the small business ecosystem is unclear, though it implies that larger, established firms are the primary targets for this type of award.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management structures, with specific oversight likely managed by U.S. Special Operations Command. Accountability measures are inherent in the 'COST PLUS FIXED FEE' structure, requiring the contractor to justify costs while adhering to a predetermined fee. Transparency is generally facilitated through contract award databases and reporting requirements, though the specific details of service delivery and cost breakdowns may be subject to standard government confidentiality protocols. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Support Services
Special Operations Command Procurement
Logistics and Technical Support Contracts
Cost-Plus Fixed Fee Contracts
Major Defense Contractor Awards

Risk Flags

Cost Control Risk (CPFF)
Scope Creep Potential
Performance Monitoring Complexity (Broad Services)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.0 million to LOCKHEED MARTIN CORPORATION. JOS SUST SPT

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 $30.0 million.

What is the period of performance?

Start: 2023-04-01. End: 2026-03-31.

What is Lockheed Martin's track record with similar 'All Other Support Services' contracts for SOCOM or other DoD entities?

Lockheed Martin has an extensive history of providing a wide range of support services to the Department of Defense and its various components, including U.S. Special Operations Command. Their portfolio often includes logistics, maintenance, training, technical support, and program management. While specific details on 'All Other Support Services' can vary greatly, the company's established presence and capabilities suggest they are well-equipped to handle complex support requirements. Analyzing past performance metrics, past performance questionnaires, and any documented issues on similar contracts would provide a clearer picture of their reliability and effectiveness in delivering these types of services. However, without access to specific contract performance data for this award, a definitive assessment remains limited.

How does the awarded amount of approximately $30 million compare to the estimated value or market rates for similar support services?

Determining the precise value comparison for 'All Other Support Services' is challenging due to the broad nature of the category and the proprietary details of the specific services rendered. However, for a three-year contract awarded to a major defense contractor like Lockheed Martin by SOCOM, $30 million is within a plausible range for significant support functions. To benchmark effectively, one would need to identify comparable contracts with similar scope, duration, and agency, ideally those competed openly. Factors such as the level of technical expertise required, geographic scope, and the criticality of the services would influence market rates. The 'COST PLUS FIXED FEE' structure also implies that the government is paying for actual costs plus a negotiated profit, making direct price comparisons less straightforward than fixed-price contracts.

What are the primary risks associated with a 'Cost Plus Fixed Fee' contract of this magnitude and duration?

The primary risks associated with a 'Cost Plus Fixed Fee' (CPFF) contract of this magnitude ($30M+) and duration (3 years) revolve around cost control and potential for scope creep. While the fixed fee provides a ceiling on the contractor's profit, the government bears the risk of cost overruns if the contractor's actual costs exceed projections. Diligent oversight is crucial to ensure that all incurred costs are reasonable, allocable, and allowable. There's also a risk that the contractor might not be sufficiently incentivized to control costs aggressively, as their profit is fixed regardless of cost efficiency. Furthermore, the broad nature of 'All Other Support Services' can increase the risk of undefined requirements leading to changes and increased costs over the contract's life.

What is the expected effectiveness of the services provided under this contract for U.S. Special Operations Command's mission?

The expected effectiveness of the services hinges entirely on the specific nature of the 'All Other Support Services' being procured and how well they align with U.S. Special Operations Command's (SOCOM) operational needs. If these services are critical for enabling SOCOM's unique missions—such as intelligence, reconnaissance, direct action, or counter-terrorism operations—then their effective delivery is paramount. The award to Lockheed Martin, a company with deep experience in defense, suggests an expectation of high performance. However, without detailed knowledge of the service requirements, it's impossible to quantify effectiveness. Success will depend on clear performance metrics, robust oversight, and the contractor's ability to adapt to the dynamic environment SOCOM operates within.

How has federal spending on 'All Other Support Services' by the Department of Defense trended over the past five years?

Federal spending on 'All Other Support Services' by the Department of Defense (DoD) has generally been substantial and can fluctuate based on evolving mission requirements, geopolitical events, and budget allocations. While specific data for the 'All Other Support Services' NAICS code (561990) across the entire DoD is not readily available in summary form, broader trends show consistent significant investment in support services. These services often encompass a wide range of activities, including facilities support, logistics, administrative functions, and specialized operational assistance. Spending in this category can increase during periods of heightened operational tempo or when new programs are initiated. Conversely, budget constraints or shifts in strategic priorities could lead to reductions. Analyzing historical spending patterns for SOCOM specifically, or for similar support service categories within the DoD, would provide more targeted insights.

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: $30,329,693

Exercised Options: $30,329,693

Current Obligation: $30,032,696

Subaward Activity

Number of Subawards: 21

Total Subaward Amount: $8,789,152

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