DoD's $75.8M Lockheed Martin Contract for Reliability Growth Efforts Lacks Competition

Contract Overview

Contract Amount: $75,826,868 ($75.8M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2011-12-16

End Date: 2015-12-31

Contract Duration: 1,476 days

Daily Burn Rate: $51.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: RELIABILITY GROWTH EFFORTS:

Place of Performance

Location: RIVIERA BEACH, PALM BEACH County, FLORIDA, 33404

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $75.8 million to LOCKHEED MARTIN CORPORATION for work described as: RELIABILITY GROWTH EFFORTS: Key points: 1. Significant investment in reliability growth for defense systems. 2. Sole-source award to Lockheed Martin suggests limited market options or strategic choice. 3. Contract type (Cost Plus Incentive Fee) aims to balance cost control with performance incentives. 4. Potential for cost overruns exists with CPIF contracts if not managed closely.

Value Assessment

Rating: fair

The contract value of $75.8M for engineering services is substantial. Benchmarking against similar reliability growth contracts is difficult without more specific service details, but the lack of competition raises questions about whether this price represents optimal value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and may result in higher costs compared to a competitive procurement, though justifications for sole-source awards often relate to unique capabilities or national security needs.

Taxpayer Impact: The lack of competition means taxpayers may not be receiving the best possible price for these critical engineering services.

Public Impact

Enhances the reliability of critical defense systems, potentially improving operational effectiveness. Supports a major defense contractor, Lockheed Martin, and its workforce. Funds specialized engineering services essential for maintaining technological superiority. The sole-source nature may limit opportunities for smaller, innovative firms in this specialized area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost-plus contract type can lead to cost overruns
Sole-source award may not reflect market value

Positive Signals

Focus on improving system reliability
Long-term contract duration suggests sustained need
Incentive fee structure encourages performance

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense systems. Spending in this area is crucial for maintaining military readiness and technological advantage. Benchmarks are difficult without specific service scope, but large sole-source engineering contracts are common in defense.

Small Business Impact

The contract was awarded to Lockheed Martin Corporation, a large prime contractor. There is no indication of small business participation in the provided data, suggesting limited direct opportunities for small businesses on this specific award.

Oversight & Accountability

Oversight would typically be managed by the Defense Contract Management Agency (DCMA). Given the sole-source nature and cost-plus contract type, rigorous oversight of costs, performance, and adherence to contract terms is crucial to ensure value for taxpayer money.

Related Government Programs

Engineering Services
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competitive bidding
Potential for cost overruns inherent in CPIF contracts
Limited transparency on sole-source justification
No clear indication of small business subcontracting

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $75.8 million to LOCKHEED MARTIN CORPORATION. RELIABILITY GROWTH EFFORTS:

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $75.8 million.

What is the period of performance?

Start: 2011-12-16. End: 2015-12-31.

What specific technical challenges or requirements justified a sole-source award for these reliability growth efforts, and were alternative solutions or contractors considered?

Justifications for sole-source awards often stem from unique technical capabilities, proprietary technology, or urgent national security needs that only one contractor can meet. The contracting agency would have documented these reasons. Without access to that documentation, it's difficult to definitively assess if alternatives were thoroughly explored or if the chosen path was truly the only viable option.

How effectively has the Cost Plus Incentive Fee (CPIF) structure incentivized Lockheed Martin to achieve reliability goals while managing costs, and what are the projected final costs compared to the

The CPIF structure aims to reward the contractor for exceeding performance targets (like reliability improvements) and penalize them for cost overruns beyond a target. Effectiveness depends on clearly defined metrics and robust oversight. Monitoring the final cost against the target cost and the achievement of incentive fees provides insight into whether the structure successfully balanced cost and performance goals.

What is the long-term strategic value of investing $75.8M in reliability growth for the specific defense systems covered by this contract?

Investing in reliability growth can significantly reduce lifecycle costs by minimizing maintenance, repair, and operational failures. For defense systems, enhanced reliability translates to improved mission success rates, increased platform availability, and potentially reduced risk to personnel. The strategic value lies in ensuring the effectiveness and readiness of critical assets over their operational lifespan.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002411R6316

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 100 E 17TH ST, RIVIERA BEACH, FL, 33404

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: $81,303,910

Exercised Options: $81,303,910

Current Obligation: $75,826,868

Subaward Activity

Number of Subawards: 14

Total Subaward Amount: $748,049

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline