DoD's $89.9M contract for Special Operations Command O&M services awarded to Lockheed Martin

Contract Overview

Contract Amount: $89,928,029 ($89.9M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2023-04-23

End Date: 2025-04-22

Contract Duration: 730 days

Daily Burn Rate: $123.2K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: CPFF - BASE OFFSITE FY23 O&M

Place of Performance

Location: LEXINGTON, FAYETTE County, KENTUCKY, 40516

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $89.9 million to LOCKHEED MARTIN CORPORATION for work described as: CPFF - BASE OFFSITE FY23 O&M Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. Cost-plus-fixed-fee structure may incentivize cost overruns if not closely monitored. 3. The contract duration of 730 days (2 years) indicates a medium-term operational support need. 4. Awarded by U.S. Special Operations Command, highlighting its importance to specialized military functions. 5. The North American Industry Classification System (NAICS) code 561990 suggests a broad range of support services. 6. No small business set-aside noted, potentially limiting opportunities for smaller enterprises.

Value Assessment

Rating: fair

The contract's value of $89.9 million over two years for O&M services requires careful benchmarking against similar support contracts. Without specific deliverables or performance metrics, assessing value-for-money is challenging. The Cost Plus Fixed Fee (CPFF) pricing structure, while common for complex services, carries inherent risks of cost escalation if not rigorously managed. Comparing this to other large-scale support contracts for SOCOM or similar entities would provide better context on whether the pricing is competitive for the scope of work.

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 number of bidders is not specified, but this method generally fosters price discovery and allows the government to select the best value offer. The open competition suggests a healthy market for these types of support services, potentially leading to more favorable pricing for the government compared to sole-source or limited competition awards.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing and the assurance that the government sought the most advantageous offer through an open process.

Public Impact

The primary beneficiaries are the U.S. Special Operations Command units requiring operational and maintenance support. Services delivered likely encompass a range of support functions critical to maintaining readiness and operational capability. The contract's geographic impact is focused on Kentucky (ST: KY, SN: KENTUCKY), where the services are presumably performed or managed. Workforce implications include potential job creation or retention within the support services sector in Kentucky, primarily for Lockheed Martin and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

CPFF contract type can lead to cost overruns if not managed diligently.
Lack of specific performance metrics makes it difficult to assess efficiency and effectiveness.
No small business set-aside may limit opportunities for smaller, specialized firms.
The broad NAICS code could mask a wide range of services, making detailed oversight challenging.

Positive Signals

Awarded through full and open competition, indicating a competitive process.
Lockheed Martin is a large, established defense contractor with significant experience.
The contract supports critical U.S. Special Operations Command functions.
The fixed fee component of CPFF provides some level of cost predictability.

Sector Analysis

This contract falls within the broader professional, scientific, and technical services sector, specifically focusing on support services for government operations. The market for such services is substantial, driven by ongoing defense and national security needs. Comparable spending benchmarks would involve analyzing other large support service contracts awarded by defense agencies, particularly those supporting specialized units like SOCOM. The size of this contract ($89.9M) places it in the mid-to-large tier for individual service awards.

Small Business Impact

The absence of a small business set-aside for this contract means that opportunities for small businesses are not guaranteed through this specific award. While Lockheed Martin, as the prime contractor, may engage small businesses as subcontractors, the primary award does not prioritize them. This could limit the direct impact on the small business ecosystem unless robust subcontracting plans are implemented and monitored. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract would primarily reside with the U.S. Special Operations Command contracting and program management offices. Accountability measures are typically embedded within the contract's terms and conditions, including reporting requirements and performance standards. Transparency is facilitated by the contract award notice, but detailed operational oversight and Inspector General jurisdiction would depend on the specific nature of the support services and any associated risks identified.

Related Government Programs

Special Operations Forces Support Services
Department of Defense Operational Support Contracts
Logistics and Maintenance Support Services
Government Support Services Contracts
Defense Contractor Services

Risk Flags

Cost-plus contract type risk
Broad NAICS code lacks specificity
Potential for cost overruns
Limited transparency on specific services

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $89.9 million to LOCKHEED MARTIN CORPORATION. CPFF - BASE OFFSITE FY23 O&M

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 $89.9 million.

What is the period of performance?

Start: 2023-04-23. End: 2025-04-22.

What specific operational and maintenance services are included under this contract?

The contract falls under NAICS code 561990, 'All Other Support Services,' which is very broad. Specific services are not detailed in the award notice but typically for SOCOM O&M contracts, this could encompass a wide array of support functions. These might include facilities maintenance, equipment repair and upkeep, logistical support, administrative services, training support, and potentially specialized technical services required for unique SOCOM operations. The exact scope would be defined in the contract's Statement of Work (SOW), which is not publicly available in this summary.

How does the $89.9 million value compare to similar contracts for SOCOM O&M services?

Benchmarking this $89.9 million contract requires comparing it to other O&M support contracts awarded by U.S. Special Operations Command or similar defense entities over a similar timeframe (two years). Without access to a database of comparable contracts, a precise comparison is difficult. However, for specialized support services to elite units, this value appears within a reasonable range for a two-year period, especially if it includes complex technical or logistical elements. A more detailed analysis would involve identifying contracts with similar NAICS codes and agency focus.

What are the key risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this service?

The primary risk with a CPFF contract is that the contractor is reimbursed for all allowable costs plus a negotiated fixed fee representing profit. If the government's oversight and cost controls are insufficient, the contractor may have less incentive to control costs, potentially leading to expenditures exceeding initial estimates. For O&M services, this could manifest in inflated labor rates, unnecessary equipment purchases, or inefficient operational practices. Effective management requires rigorous auditing of costs and strict adherence to the contract's scope and limitations.

What is Lockheed Martin's track record with similar government support contracts?

Lockheed Martin Corporation is one of the largest defense contractors globally, with extensive experience in providing a wide range of support services to the U.S. military and other government agencies. They have a long history of managing complex logistics, maintenance, and operational support contracts, often involving high-value, long-term agreements. Their track record includes numerous large-scale contracts for various branches of the DoD, including special operations. Performance can vary across contracts, but their scale suggests significant capability in managing such requirements.

What are the potential implications of awarding this contract in Kentucky?

Awarding this contract with a stated location in Kentucky (ST: KY, SN: KENTUCKY) suggests that a significant portion of the work, or the management of the work, will occur within the state. This could lead to job creation or sustainment for Lockheed Martin and its subcontractors in the region, contributing to the local economy. It also implies that the operational needs being met are geographically tied to facilities or activities within Kentucky that support U.S. Special Operations Command.

How does the 'All Other Support Services' NAICS code impact the analysis of this contract?

The NAICS code 561990 ('All Other Support Services') is a catch-all category, making it challenging to precisely define the scope of services without the contract's Statement of Work (SOW). This broad classification means the contract could cover anything from administrative support and facilities management to specialized technical assistance. For analysts, this necessitates a deeper dive into contract details to understand the specific functions performed, the associated risks, and the value proposition, as it doesn't provide immediate industry-specific context like a more specialized code would.

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: $89,928,029

Exercised Options: $89,928,029

Current Obligation: $89,928,029

Subaward Activity

Number of Subawards: 130

Total Subaward Amount: $58,847,111

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