HHS awards $990M for Computer Systems Design Services to Lockheed Martin Services, LLC over 5 years

Contract Overview

Contract Amount: $990,701,572 ($990.7M)

Contractor: Lockheed Martin Services, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2009-01-01

End Date: 2014-12-31

Contract Duration: 2,190 days

Daily Burn Rate: $452.4K/day

Competition Type: NON-COMPETITIVE DELIVERY ORDER

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: TAS::75 0511::TAS

Place of Performance

Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $990.7 million to LOCKHEED MARTIN SERVICES, LLC for work described as: TAS::75 0511::TAS Key points: 1. Significant contract value of $990.7 million over five years. 2. Sole-source award to Lockheed Martin Services, LLC raises competition concerns. 3. Contract covers essential computer systems design services for CMS. 4. Risk of overpayment due to non-competitive award and lack of price discovery.

Value Assessment

Rating: questionable

The contract's large value and non-competitive nature make a direct pricing assessment difficult without benchmarks. The firm fixed-price structure provides some cost certainty, but the lack of competition limits the ability to validate if the price is optimal.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This was a non-competitive delivery order, meaning there was no formal solicitation or bidding process. This significantly limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The lack of competition for a nearly $1 billion contract likely results in a higher cost to taxpayers than if it had been competitively bid.

Public Impact

Impacts healthcare services through IT infrastructure support for CMS. Taxpayers may be overpaying due to the sole-source nature of the award. Lack of transparency in the procurement process limits public scrutiny.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
High contract value
Lack of competition
Limited price discovery

Positive Signals

Firm fixed-price contract
Long-term service provision

Sector Analysis

This contract falls under IT services, specifically computer systems design. The benchmark for IT services can vary widely, but large, long-term sole-source awards often warrant closer scrutiny due to potential cost inefficiencies.

Small Business Impact

The contract was awarded to Lockheed Martin Services, LLC, a large business. There is no indication of small business participation or subcontracting in the provided data.

Oversight & Accountability

The non-competitive nature of this award raises questions about the oversight applied during the procurement process. Further review would be needed to understand the justification for bypassing competitive procedures.

Related Government Programs

Computer Systems Design Services
Department of Health and Human Services Contracting
Centers for Medicare and Medicaid Services Programs

Risk Flags

Potential for inflated pricing due to sole-source award.
Lack of transparency in the procurement process.
High financial exposure for taxpayers.
Risk of vendor lock-in.
Limited opportunities for innovation from other vendors.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $990.7 million to LOCKHEED MARTIN SERVICES, LLC. TAS::75 0511::TAS

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN SERVICES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Medicare and Medicaid Services).

What is the total obligated amount?

The obligated amount is $990.7 million.

What is the period of performance?

Start: 2009-01-01. End: 2014-12-31.

What was the justification for awarding this contract on a sole-source basis?

The justification for a sole-source award typically involves circumstances where only one responsible source can provide the required supplies or services. This could be due to unique capabilities, proprietary technology, or urgent and compelling needs. Without specific documentation, it's impossible to confirm the validity of the justification in this case.

How does the pricing compare to similar competitively awarded contracts for computer systems design services?

Direct comparison is challenging due to the sole-source nature. However, industry benchmarks for similar IT services procured competitively often show lower per-unit costs and better overall value. The absence of competition here suggests potential for inflated pricing, necessitating a detailed cost analysis.

What is the potential risk to CMS operations if Lockheed Martin Services, LLC fails to perform adequately?

Given the critical nature of computer systems design services for CMS operations, a failure to perform could lead to significant disruptions in healthcare services, data management, and program administration. The reliance on a single vendor for such a substantial contract amplifies this risk.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: NON-COMPETITIVE DELIVERY ORDER

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 2339 ROUTE 70 W, CHERRY HILL, NJ, 08002

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $1,158,003,643

Exercised Options: $990,701,572

Current Obligation: $990,701,572

Actual Outlays: $494,012

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 26301D0054

IDV Type: IDC

Timeline