DoD Awards $805M Engineering Services Contract to Lockheed Martin for AEGIS Ships

Contract Overview

Contract Amount: $38,805,097 ($38.8M)

Contractor: Lockheed Martin Services, LLC

Awarding Agency: Department of Defense

Start Date: 2000-09-01

End Date: 2012-10-31

Contract Duration: 4,443 days

Daily Burn Rate: $8.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200012!1700!003605!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002400C5135 !A!*!* !20000901!20100831!805258373!805258373!834951691!N!77609!LOCKHEED MARTIN SERVICES, INC.!2339 ROUTE 70 W !CHERRY HILL !NJ!08002!82720!001!51!WALLOPS FLIGHT CTR !ACCOMACK !VIRGINIA !0001!+000000059688!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A3 !SHIPS !2CNZ!CG-47 AEGIS !8711!3!*!*!*!B!A!*!A !N!R!2!001!B!* !Z!N!Z!* !* !N!C!*!A!A!A!A!A!A!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: GAITHERSBURG, MONTGOMERY County, MARYLAND, 20879

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $38.8 million to LOCKHEED MARTIN SERVICES, LLC for work described as: 200012!1700!003605!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002400C5135 !A!*!* !20000901!20100831!805258373!805258373!834951691!N!77609!LOCKHEED MARTIN SERVICES, INC.!2339 ROUTE 70 W !CHERRY HILL !NJ!08002!82720!001!51!WALLOPS FLIGHT CTR !ACC… Key points: 1. Contract awarded for engineering technical services related to CG-47 AEGIS ships. 2. Significant value of over $805 million over a 10-year period. 3. Competition was full and open, suggesting potential for competitive pricing. 4. Sector is Defense, specifically IT and engineering services for naval platforms.

Value Assessment

Rating: good

The contract value of $805M over 10 years for engineering technical services appears reasonable given the scope and duration. Benchmarking against similar complex defense contracts is necessary for a definitive assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically allows for the widest range of potential bidders and can lead to more competitive pricing. The price discovery mechanism is likely robust due to this competitive environment.

Taxpayer Impact: Taxpayer funds are being used for critical defense infrastructure support, with the expectation of value derived from competitive bidding.

Public Impact

Supports the operational readiness of the U.S. Navy's AEGIS-equipped cruisers. Ensures continued development and maintenance of advanced naval combat systems. Contributes to the technological superiority of U.S. naval forces. Impacts the defense industrial base and associated workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (10 years) may introduce scope creep risks.
Cost Plus Award Fee structure can incentivize contractor performance but requires careful monitoring.
Reliance on a single contractor for critical engineering services.

Positive Signals

Full and open competition should drive cost efficiencies.
Contract supports a vital national defense asset (AEGIS ships).
Experienced contractor (Lockheed Martin) likely brings significant expertise.

Sector Analysis

This contract falls within the Defense sector, specifically focusing on IT and engineering services for naval platforms. Spending in this area is critical for maintaining national security and technological advantage, with significant government investment typical for complex weapon systems.

Small Business Impact

While the primary awardee is Lockheed Martin Services, Inc., the contract details do not specify subcontracting goals for small businesses. Further investigation would be needed to determine the extent of small business participation.

Oversight & Accountability

The Department of Defense, through the Naval Sea Systems Command and Defense Contract Management Agency, is responsible for oversight. The contract type (Cost Plus Award Fee) necessitates robust oversight to ensure cost control and performance.

Related Government Programs

Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Long-term contract duration (10 years) increases risk of cost escalation and scope creep.
Cost Plus Award Fee (CPAF) contract type requires diligent oversight to manage costs.
Potential for contractor lock-in due to specialized knowledge of AEGIS systems.
Dependence on a single contractor for critical engineering services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.8 million to LOCKHEED MARTIN SERVICES, LLC. 200012!1700!003605!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002400C5135 !A!*!* !20000901!20100831!805258373!805258373!834951691!N!77609!LOCKHEED MARTIN SERVICES, INC.!2339 ROUTE 70 W !CHERRY HILL !NJ!08002!82720!001!51!WALLOPS FLIGHT CTR !ACCOMACK !VIRGINIA !0001!+000000059688!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A3 !SHIPS !2CNZ!CG-47 AEGIS !8711!3!*!*!*!B!A!*!A !N!R!

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN SERVICES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $38.8 million.

What is the period of performance?

Start: 2000-09-01. End: 2012-10-31.

What specific engineering technical services are included under this contract, and how do they align with the current and future needs of the AEGIS fleet?

The contract specifies engineering technical services for CG-47 AEGIS class ships. This likely encompasses a broad range of activities including system design, integration, testing, maintenance support, and upgrades. Alignment with future needs would depend on the contract's flexibility for incorporating new technologies and addressing evolving threats, which requires detailed review of the SOW and any modifications.

How effectively did the full and open competition process ensure competitive pricing and prevent potential cost overruns, given the Cost Plus Award Fee structure?

Full and open competition is designed to foster a competitive environment, potentially leading to better initial pricing. However, the Cost Plus Award Fee (CPAF) structure means the final cost is influenced by performance incentives. Effective oversight by the government is crucial to ensure that the award fee criteria are met without incentivizing unnecessary costs, and that the overall price remains fair and reasonable.

What are the key performance indicators (KPIs) and award fee criteria used to measure Lockheed Martin's performance and ensure value for taxpayer money?

Specific KPIs and award fee criteria are not detailed in the provided data. Typically, for such contracts, KPIs would relate to system availability, reliability, technical performance metrics, schedule adherence, and successful completion of engineering tasks. The award fee criteria would be directly tied to achieving or exceeding these KPIs, ensuring that contractor compensation reflects successful delivery of critical services.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

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

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline