DoD awards $75.6M contract for design agent services to Lockheed Martin, ending in 2025
Contract Overview
Contract Amount: $75,583,263 ($75.6M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2018-09-28
End Date: 2025-08-05
Contract Duration: 2,503 days
Daily Burn Rate: $30.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: DESIGN AGENT SERVICES FOR FY18
Place of Performance
Location: LIVERPOOL, ONONDAGA County, NEW YORK, 13088
State: New York Government Spending
Plain-Language Summary
Department of Defense obligated $75.6 million to LOCKHEED MARTIN CORPORATION for work described as: DESIGN AGENT SERVICES FOR FY18 Key points: 1. The contract value is substantial, indicating significant engineering needs. 2. Lockheed Martin is a major defense contractor, suggesting a competitive landscape for large-scale projects. 3. The duration of the contract (2018-2025) implies a long-term requirement. 4. Engineering services (NAICS 541330) are critical for defense infrastructure and development.
Value Assessment
Rating: fair
The contract is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. Benchmarking against similar engineering services contracts is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a robust price discovery process. However, the specific awardee, Lockheed Martin, is a dominant player, which could influence future competition.
Taxpayer Impact: Taxpayer funds are being used for essential defense engineering services. The full and open competition aims to ensure value, but the CPFF structure warrants oversight.
Public Impact
Supports critical defense infrastructure design and development. Ensures specialized engineering expertise is available for complex projects. Contributes to the operational readiness of the Department of Defense.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee structure can incentivize higher costs.
- Long contract duration may not reflect current market efficiencies.
- Limited visibility into specific cost drivers for the fixed fee.
Positive Signals
- Awarded under full and open competition.
- Secures essential engineering services for national defense.
- Experienced contractor with a proven track record.
Sector Analysis
The defense sector heavily relies on specialized engineering services for R&D, procurement, and sustainment. Spending benchmarks for such services vary widely based on project complexity and duration, but $75.6M over several years for design agent services is within the expected range for major defense programs.
Small Business Impact
This contract was awarded to Lockheed Martin Corporation, a large prime contractor. There is no indication of small business participation in the provided data, suggesting this contract may not directly benefit small businesses as subcontractors.
Oversight & Accountability
The Department of Defense, through the Defense Contract Management Agency, is responsible for overseeing this contract. The CPFF structure necessitates diligent oversight to manage costs and ensure the fixed fee remains reasonable relative to the effort expended.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Cost Plus Fixed Fee structure.
- Long contract duration.
- Potential for limited future competition.
- Lack of small business participation noted.
Tags
engineering-services, department-of-defense, ny, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $75.6 million to LOCKHEED MARTIN CORPORATION. DESIGN AGENT SERVICES FOR FY18
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 $75.6 million.
What is the period of performance?
Start: 2018-09-28. End: 2025-08-05.
What specific design agent services are being procured, and how do they align with current defense modernization priorities?
The contract specifies 'DESIGN AGENT SERVICES' for FY18, falling under NAICS code 541330 (Engineering Services). While the exact services aren't detailed, they likely encompass preliminary design, detailed engineering, technical reviews, and potentially support during manufacturing phases for defense systems or infrastructure. These services are crucial for ensuring that new defense capabilities are designed effectively and meet stringent military requirements, aligning with ongoing modernization efforts.
How will the Cost Plus Fixed Fee structure be managed to prevent cost overruns and ensure fair compensation?
Effective management of a CPFF contract requires robust oversight from the Defense Contract Management Agency. This includes detailed monitoring of direct costs, rigorous justification for indirect costs, and careful negotiation and tracking of the fixed fee. Performance metrics and regular audits are essential to ensure the contractor is incentivized to control costs while delivering the required engineering services, preventing the fee from becoming disproportionate to the effort.
What is the potential impact of awarding this long-term contract to a single large contractor on future competition for similar services?
Awarding a significant, long-term contract like this to a major defense contractor like Lockheed Martin, even under full and open competition, can potentially shape future market dynamics. While competition was present for this award, the contractor's established relationship and deep involvement may create barriers to entry for smaller or less experienced firms in subsequent procurements for related services. This underscores the importance of actively fostering competition in subsequent contract actions.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N0002418R5300
Offers Received: 2
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 497 ELECTRONICS PKWY BLDG 5, LIVERPOOL, NY, 13088
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: $76,663,927
Exercised Options: $76,663,927
Current Obligation: $75,583,263
Actual Outlays: $6,553,432
Subaward Activity
Number of Subawards: 103
Total Subaward Amount: $16,603,139
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2018-09-28
Current End Date: 2025-08-05
Potential End Date: 2025-08-05 00:00:00
Last Modified: 2025-10-07
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