DoD's $10.5M contract for engineering and technical support awarded to Lockheed Martin

Contract Overview

Contract Amount: $10,533,457 ($10.5M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2025-02-03

End Date: 2026-02-02

Contract Duration: 364 days

Daily Burn Rate: $28.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: ENGINEERING AND TECHNICAL SUPPORT FOR PARENT CLIN 0001 OF THE IDIQ AND MATERIAL, TRAVEL, AND SUPPORT FOR PARENT CLIN 0002 OF THE IDIQ.

Place of Performance

Location: LIVERPOOL, ONONDAGA County, NEW YORK, 13088

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $10.5 million to LOCKHEED MARTIN CORPORATION for work described as: ENGINEERING AND TECHNICAL SUPPORT FOR PARENT CLIN 0001 OF THE IDIQ AND MATERIAL, TRAVEL, AND SUPPORT FOR PARENT CLIN 0002 OF THE IDIQ. Key points: 1. Contract focuses on critical engineering and technical support for naval systems. 2. Awarded via full and open competition, suggesting a robust bidding process. 3. Performance period spans one year, indicating a focused scope of work. 4. The contract type (Cost Plus Incentive Fee) allows for performance-based adjustments. 5. This award is part of a larger IDIQ, suggesting ongoing support needs. 6. The contractor, Lockheed Martin, is a major defense industry player.

Value Assessment

Rating: good

The contract value of $10.5 million for one year of engineering and technical support appears reasonable given the contractor's expertise and the critical nature of naval systems. Benchmarking against similar contracts for specialized engineering services in the defense sector suggests this pricing is within expected ranges. The Cost Plus Incentive Fee structure incentivizes efficient performance, potentially leading to better value than fixed-price contracts if cost savings are realized.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The specific number of bidders is not provided, but this procurement method generally fosters competitive pricing and encourages contractors to offer their best value. The Department of the Navy's approach suggests a commitment to exploring the market for optimal solutions.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best possible price and quality for essential engineering and technical support services.

Public Impact

The Department of the Navy benefits from specialized engineering and technical support for its critical systems. This contract ensures the continued operational readiness and effectiveness of naval platforms. The services provided are crucial for maintaining advanced search, detection, navigation, guidance, and related systems. The contract's impact is primarily within the defense sector, supporting national security objectives. Work is likely to be performed in New York, potentially supporting the local technical workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Incentive Fee contracts can sometimes lead to cost overruns if not closely managed.
Reliance on a single large prime contractor may limit opportunities for smaller, specialized subcontractors.
The specific technical requirements and performance metrics need careful monitoring to ensure value.

Positive Signals

Awarded through full and open competition, indicating a competitive market.
Lockheed Martin is a reputable contractor with extensive experience in defense systems.
The IDIQ structure suggests a framework for potentially streamlined future task orders.
The incentive fee structure aligns contractor performance with program objectives.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on the manufacturing and support of navigation and guidance systems. The market for such specialized engineering and technical support is dominated by large, established defense contractors. Spending in this area is driven by the need to maintain and upgrade complex military hardware, ensuring technological superiority and operational readiness. Comparable spending benchmarks would typically involve other large-scale engineering support contracts for naval or aerospace platforms.

Small Business Impact

The contract data indicates that small business participation (sb) is false, and there is no mention of a small business set-aside. This suggests that the primary award was not specifically targeted towards small businesses. While the prime contractor is not obligated to subcontract with small businesses under this specific award, large defense contracts often include subcontracting plans that do allocate a portion of the work to small and disadvantaged businesses. Further analysis of subcontracting reports would be needed to determine the actual impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. Accountability measures are embedded within the Cost Plus Incentive Fee structure, which ties contractor profit to performance metrics. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Defense Engineering Services IDIQs
Aerospace and Defense Manufacturing Support
Navigation and Guidance System Development

Risk Flags

Cost Plus Incentive Fee contract type requires careful monitoring to manage costs.
Potential for limited small business subcontracting opportunities.
Reliance on a single large prime contractor for critical support.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.5 million to LOCKHEED MARTIN CORPORATION. ENGINEERING AND TECHNICAL SUPPORT FOR PARENT CLIN 0001 OF THE IDIQ AND MATERIAL, TRAVEL, AND SUPPORT FOR PARENT CLIN 0002 OF THE IDIQ.

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $10.5 million.

What is the period of performance?

Start: 2025-02-03. End: 2026-02-02.

What is Lockheed Martin's track record with the Department of the Navy for similar engineering and technical support contracts?

Lockheed Martin Corporation has a long-standing and extensive track record of performing complex engineering and technical support services for the Department of the Navy across a wide array of platforms and systems. They are a primary contractor for many critical naval programs, including shipbuilding, combat systems, and aviation support. Their history with the Navy includes numerous large-scale contracts, often awarded through competitive processes, demonstrating their capability to meet demanding technical requirements and delivery schedules. While specific performance metrics for past contracts are not detailed here, their continued selection for significant awards suggests a generally positive performance history and a strong working relationship with the Navy. This specific contract, as a delivery order under an IDIQ, builds upon an existing contractual relationship, implying prior successful engagements.

How does the $10.5 million value compare to similar engineering support contracts for naval systems?

The $10.5 million value for one year of engineering and technical support for naval systems is a moderate-sized award within the defense sector. Larger, more complex contracts for system development or sustainment can range from tens of millions to billions of dollars. However, for specialized engineering and technical support, particularly as a single delivery order under an IDIQ, this amount is consistent with the scope of work described. Contracts for similar services, such as system integration, testing, maintenance planning, and technical documentation for naval platforms, often fall within this range. The Cost Plus Incentive Fee (CPIF) structure also influences the total potential cost, but the initial award value provides a baseline for comparison. Without knowing the specific technical complexity and duration of support, a precise benchmark is difficult, but it does not appear to be an outlier for this type of service.

What are the primary risks associated with this Cost Plus Incentive Fee (CPIF) contract?

The primary risks associated with a Cost Plus Incentive Fee (CPIF) contract revolve around cost control and the potential for scope creep. While CPIF aims to incentivize efficiency by sharing cost savings or overruns between the government and the contractor, it requires robust government oversight to ensure that costs are reasonable and allocable. There is a risk that the contractor may not achieve the target profit if performance objectives are not met, or conversely, that costs could escalate beyond projections if not managed diligently. Furthermore, the 'plus' nature of the contract means that the final cost is not fixed upfront, introducing a degree of cost uncertainty for the government. Effective management of the incentive structure, clear definition of performance metrics, and rigorous cost auditing are crucial to mitigate these risks and ensure value for taxpayer money.

How does this contract contribute to the operational effectiveness of the Department of the Navy?

This contract is crucial for maintaining and enhancing the operational effectiveness of the Department of the Navy's systems. By providing essential engineering and technical support, it ensures that critical naval platforms, particularly those involving search, detection, navigation, and guidance, remain functional, up-to-date, and reliable. This support likely encompasses activities such as system diagnostics, troubleshooting, maintenance planning, software updates, and potentially minor modifications or upgrades. Such services are vital for ensuring that naval assets can perform their missions successfully in complex and demanding environments, contributing directly to national security and maritime dominance. Without this specialized support, the performance and longevity of sophisticated naval equipment could be compromised.

What are the historical spending patterns for engineering and technical support within the Department of the Navy for similar systems?

Historical spending patterns for engineering and technical support within the Department of the Navy for similar systems typically show consistent and significant investment. The Navy operates highly complex and technologically advanced platforms that require ongoing specialized support throughout their lifecycle. Spending in this category often occurs through Indefinite Delivery/Indefinite Quantity (IDIQ) contracts, allowing for flexible task order issuance as needs arise. Major defense contractors like Lockheed Martin are frequent recipients of such awards due to their established expertise and infrastructure. Annual spending can fluctuate based on modernization programs, new platform acquisitions, and sustainment requirements, but it generally represents a substantial portion of the Navy's overall procurement and R&D budgets. The $10.5 million for this specific delivery order aligns with the ongoing need for such support.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0002423R6211

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Address: 497 ELECTRONICS PKWY, 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: $125,406,457

Exercised Options: $21,656,457

Current Obligation: $10,533,457

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0002425D6211

IDV Type: IDC

Timeline