DoD Awards Lockheed Martin $52.8M for Simulation Framework, Raising Questions on Value and Competition

Contract Overview

Contract Amount: $52,828,692 ($52.8M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2024-12-04

End Date: 2026-10-15

Contract Duration: 680 days

Daily Burn Rate: $77.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS AWARD FEE

Sector: IT

Official Description: DEVELOPMENT OF OBJECTIVE SIMULATION FRAMEWORK CAPABILITIES TO PROVIDE A MODELING AND SIMULATION AUGMENTATION SYSTEM

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35898

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $52.8 million to LOCKHEED MARTIN CORPORATION for work described as: DEVELOPMENT OF OBJECTIVE SIMULATION FRAMEWORK CAPABILITIES TO PROVIDE A MODELING AND SIMULATION AUGMENTATION SYSTEM Key points: 1. Significant investment in advanced simulation capabilities for missile defense. 2. Sole contractor identified, raising concerns about competitive pricing. 3. Potential for cost overruns given the Cost Plus Award Fee contract type. 4. Focus on IT services within the defense sector.

Value Assessment

Rating: questionable

The contract's Cost Plus Award Fee structure allows for potential cost growth beyond the initial estimate. Benchmarking against similar custom computer programming services is difficult without more detailed cost breakdowns, but the award amount appears substantial for the stated objective.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

While advertised as full and open competition, the specific nature of the 'Objective Simulation Framework Capabilities' may have limited the pool of qualified bidders. The award type (Delivery Order) suggests this is part of a larger contract vehicle, and the price discovery for this specific order needs further scrutiny.

Taxpayer Impact: Taxpayer funds are allocated for advanced defense simulation, aiming to enhance national security. However, the lack of clear competitive pressure could lead to less efficient use of these funds.

Public Impact

Enhances U.S. missile defense capabilities through advanced modeling and simulation. Supports technological advancement in a critical national security sector. Potential for job creation within the aerospace and defense industry. Ensures U.S. military readiness through sophisticated training and analysis tools.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Positive Signals

Sector Analysis

This contract falls under Information Technology (IT) services, specifically custom computer programming, within the broader defense sector. Spending benchmarks for similar complex simulation development projects are highly variable, but this award represents a significant investment in specialized software capabilities.

Small Business Impact

The contract was awarded to Lockheed Martin Corporation, a large prime contractor. There is no indication that small businesses were significantly involved in this specific award, either as subcontractors or direct awardees, suggesting limited direct benefit to the small business sector for this particular contract.

Oversight & Accountability

The Department of Defense, through the Missile Defense Agency, is responsible for oversight. The Cost Plus Award Fee structure necessitates robust monitoring to ensure performance objectives are met and costs are controlled effectively. Further review of performance reports and cost audits would be beneficial.

Related Government Programs

Risk Flags

Tags

custom-computer-programming-services, department-of-defense, al, delivery-order, 10m-plus

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $52.8 million to LOCKHEED MARTIN CORPORATION. DEVELOPMENT OF OBJECTIVE SIMULATION FRAMEWORK CAPABILITIES TO PROVIDE A MODELING AND SIMULATION AUGMENTATION SYSTEM

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Missile Defense Agency).

What is the total obligated amount?

The obligated amount is $52.8 million.

What is the period of performance?

Start: 2024-12-04. End: 2026-10-15.

What specific performance metrics will be used to evaluate the success of the 'Objective Simulation Framework Capabilities' and justify potential award fees?

The success of the simulation framework will likely be evaluated based on its ability to accurately model complex missile defense scenarios, provide actionable insights for strategic planning, and integrate seamlessly with existing defense systems. Specific metrics might include simulation fidelity, processing speed, user feedback on utility, and successful validation against real-world or simulated test data. The award fee structure would be tied to achieving predefined milestones and exceeding baseline performance targets.

How does the Missile Defense Agency ensure competitive pricing and value for money when awarding contracts for highly specialized, potentially niche capabilities like this simulation framework?

The agency typically initiates full and open competition to maximize bidder participation. However, for highly specialized needs, the pool of capable contractors may be limited. Price discovery is attempted through market research, historical cost data, and negotiation. The Cost Plus Award Fee structure aims to incentivize efficiency, but requires diligent oversight to prevent excessive costs and ensure the final price reflects true value delivered.

What is the long-term strategy for maintaining and updating this simulation framework, and how will future costs be managed to ensure continued cost-effectiveness?

The long-term strategy likely involves phased development, incorporating user feedback, and planning for technology refreshes. Future costs will be managed through competitive follow-on contracts, potentially using fixed-price or other more cost-certain structures for sustainment and upgrades. Continuous market analysis and benchmarking will be crucial to ensure ongoing cost-effectiveness and prevent vendor lock-in.

Industry Classification

NAICS: Professional, Scientific, and Technical ServicesComputer Systems Design and Related ServicesCustom Computer Programming Services

Product/Service Code: IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HQ014717R0047

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 9970 FEDERAL DR, COLORADO SPRINGS, CO, 80921

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $93,319,206

Exercised Options: $93,319,206

Current Obligation: $52,828,692

Subaward Activity

Number of Subawards: 27

Total Subaward Amount: $7,391,315

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HQ014719D0002

IDV Type: IDC

Timeline

Start Date: 2024-12-04

Current End Date: 2026-10-15

Potential End Date: 2026-10-15 00:00:00

Last Modified: 2026-01-14

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