DHS awarded $11M to Lockheed Martin for TWIC Bridge, raising questions about competition and value

Contract Overview

Contract Amount: $49,057,921 ($49.1M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Homeland Security

Start Date: 2012-06-29

End Date: 2013-09-03

Contract Duration: 431 days

Daily Burn Rate: $113.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: THIS PR # 21-12-202TTC447 FOR $11,000,000.00 IS TO FUND THE TWIC BRIDGE CONTRACT. CONTRACTOR: LOCKHEED MARTIN CONTRACT #: TBD POF/POP: 06/29/2012 TO 01/28/2013 VALUE: $11,000,000.00 CO: GLORIA URIA COTR: DEBRA GRAHAM POC FOR QUESTIONS: DEBRA GRAHAM 571-227-5450

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22202

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $49.1 million to LOCKHEED MARTIN CORPORATION for work described as: THIS PR # 21-12-202TTC447 FOR $11,000,000.00 IS TO FUND THE TWIC BRIDGE CONTRACT. CONTRACTOR: LOCKHEED MARTIN CONTRACT #: TBD POF/POP: 06/29/2012 TO 01/28/2013 VALUE: $11,000,000.00 CO: GLORIA URIA COTR: DEBRA GRAHAM POC FOR QUESTIONS: DEBRA GRAHAM 571-227-5450 Key points: 1. The contract's value of $11 million for a 15-month period warrants scrutiny for cost-effectiveness. 2. Awarded to a single, large contractor, the lack of competition may have inflated prices. 3. The 'NOT COMPETED' status is a significant risk indicator, suggesting potential for overspending. 4. Performance period of 15 months for the TWIC Bridge contract needs to be assessed against deliverables. 5. This contract falls within the IT services sector, specifically Computer Systems Design. 6. The absence of small business set-asides or subcontracting plans is noted.

Value Assessment

Rating: questionable

The $11 million award for a 15-month period for the TWIC Bridge contract, awarded to Lockheed Martin, appears high given the 'NOT COMPETED' status. Without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar contracts. The cost-plus-fixed-fee structure, while offering flexibility, can also lead to cost overruns if not rigorously managed. Further analysis of the specific services rendered and their necessity is required to fully assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was explicitly marked as 'NOT COMPETED,' indicating a sole-source award. This means that Lockheed Martin was likely the only vendor considered or approached for this requirement. The lack of competition limits price discovery and may prevent the government from securing the most favorable terms and pricing. It raises concerns about whether alternative solutions or more cost-effective providers were overlooked.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure, potentially leading to higher costs than if multiple bids had been solicited.

Public Impact

The TWIC Bridge program, funded by this contract, aims to enhance transportation security. The primary beneficiaries are likely government agencies responsible for transportation security and potentially users of the TWIC system. The contract supports IT infrastructure and services related to the Transportation Worker Identification Credential (TWIC) program. Workforce implications are likely within Lockheed Martin's IT and project management divisions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs.
Cost-plus-fixed-fee contract type can incentivize higher spending.
Short performance period for a significant IT project might indicate rushed implementation or scope limitations.
Sole-source awards reduce transparency and accountability in pricing.

Positive Signals

Awarded to a major defense contractor with extensive experience.
The contract supports a critical national security program (TWIC).
The contract is for IT services, a necessary component of modern government operations.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically Computer Systems Design Services. The market for such services is vast and highly competitive, with numerous large and small businesses offering solutions. The Transportation Security Administration (TSA), part of DHS, frequently procures IT services to maintain and upgrade its systems. Benchmarking this $11 million contract would require comparing it to other IT service contracts of similar scope and duration within the federal government, particularly those related to identity management and security.

Small Business Impact

The contract data indicates that this was not a small business set-aside and that small business participation was not explicitly mentioned. Given the sole-source nature of the award, opportunities for small businesses to subcontract were likely limited or non-existent. This contract does not appear to contribute to the government's small business contracting goals.

Oversight & Accountability

Oversight for this contract would fall under the Department of Homeland Security (DHS) and the Transportation Security Administration (TSA). The Contracting Officer's Representative (COR), Debra Graham, is the point of contact for questions, suggesting a level of direct oversight. However, the 'NOT COMPETED' status and cost-plus-fixed-fee structure necessitate robust monitoring to ensure funds are used efficiently and effectively. Inspector General jurisdiction would apply if any fraud or mismanagement were suspected.

Related Government Programs

Transportation Worker Identification Credential (TWIC) Program
Department of Homeland Security IT Procurement
Transportation Security Administration Contracts
Lockheed Martin Federal Contracts

Risk Flags

Sole-source award
Lack of competition
Cost-plus-fixed-fee contract type
Limited transparency on justification for non-competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $49.1 million to LOCKHEED MARTIN CORPORATION. THIS PR # 21-12-202TTC447 FOR $11,000,000.00 IS TO FUND THE TWIC BRIDGE CONTRACT. CONTRACTOR: LOCKHEED MARTIN CONTRACT #: TBD POF/POP: 06/29/2012 TO 01/28/2013 VALUE: $11,000,000.00 CO: GLORIA URIA COTR: DEBRA GRAHAM POC FOR QUESTIONS: DEBRA GRAHAM 571-227-5450

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Transportation Security Administration).

What is the total obligated amount?

The obligated amount is $49.1 million.

What is the period of performance?

Start: 2012-06-29. End: 2013-09-03.

What specific services did Lockheed Martin provide under the TWIC Bridge contract?

The provided data indicates the contract is for 'Computer Systems Design Services' related to the 'TWIC Bridge' project. While the exact deliverables are not detailed, this typically encompasses the design, development, integration, and maintenance of computer systems. For the TWIC program, this could involve enhancements to the identity verification systems, database management, network infrastructure supporting TWIC card readers, or software updates for the overall TWIC system. The 'TWIC Bridge' likely refers to a specific component or upgrade within the larger TWIC ecosystem, possibly related to bridging different systems or data sources for enhanced security or functionality. Further documentation would be needed to ascertain the precise technical scope and outcomes.

Why was this contract not competed, and what was the justification for a sole-source award?

The provided data explicitly states 'NOT COMPETED' for Contract PR # 21-12-202TTC447. Federal procurement regulations allow for non-competitive (sole-source) awards under specific circumstances, such as when only one responsible source can satisfy the agency's needs, or in cases of urgent and compelling need. Without the agency's justification documentation (e.g., a Justification and Approval - J&A), the specific reason for not competing this $11 million contract remains unknown. This lack of competition is a significant concern as it bypasses the standard process designed to ensure fair pricing and maximize value for taxpayers.

How does the $11 million cost compare to similar IT service contracts for transportation security systems?

Benchmarking the $11 million cost for this 15-month contract is challenging without more specific details on the services rendered and the exact nature of the 'TWIC Bridge' project. However, $11 million for a little over a year of IT systems design services is a substantial amount. Comparable contracts within the federal government for IT modernization or system integration projects can range widely, from a few million to tens or hundreds of millions of dollars, depending on complexity, duration, and the contractor. Given that this was a sole-source award to a large prime contractor like Lockheed Martin, the price may be higher than if it had been competed among multiple vendors, including potentially smaller, more specialized firms.

What is Lockheed Martin's track record with the Department of Homeland Security and the TWIC program?

Lockheed Martin is a major defense and aerospace contractor with a significant presence across various U.S. federal agencies, including the Department of Homeland Security (DHS). While the provided data doesn't detail Lockheed Martin's specific history with the TWIC program prior to this contract, the company has a broad portfolio in IT services, cybersecurity, and systems integration. Their extensive experience suggests they possess the technical capabilities to undertake complex projects. However, the 'NOT COMPETED' status of this particular $11 million contract warrants scrutiny regardless of the contractor's general reputation, focusing on the value and necessity of this specific award.

What are the potential risks associated with a 'NOT COMPETED' contract of this magnitude?

The primary risk associated with a 'NOT COMPETED' contract, especially one valued at $11 million, is the potential for inflated pricing due to the absence of market competition. Without bids from multiple vendors, the government may not be securing the best possible price or value. Other risks include a lack of innovation, as the chosen contractor may not be incentivized to explore novel solutions, and reduced transparency in the procurement process. Furthermore, it can create a perception of favoritism or missed opportunities for other capable businesses, including small businesses, to compete for government work.

What oversight mechanisms were in place for this cost-plus-fixed-fee contract?

For a Cost-Plus-Fixed-Fee (CPFF) contract, oversight typically involves rigorous monitoring of the contractor's incurred costs to ensure they are reasonable, allocable, and allowable under the contract terms. The Contracting Officer's Representative (COR), identified as Debra Graham, plays a crucial role in overseeing the technical aspects and performance. The agency (TSA/DHS) would be responsible for ensuring that Lockheed Martin meets the contract's objectives and that the fixed fee remains appropriate. However, the effectiveness of oversight is often amplified when coupled with competitive pressure, which was absent in this sole-source award.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 700 N FREDERICK AVE, LOCATION A, GAITHERSBURG, MD, 20879

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: $54,999,046

Exercised Options: $49,057,921

Current Obligation: $49,057,921

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline