DoD Awards $835M Engineering Services Contract to Lockheed Martin for AEGIS Program
Contract Overview
Contract Amount: $1,883,315,467 ($1.9B)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 1998-04-14
End Date: 2009-09-30
Contract Duration: 4,187 days
Daily Burn Rate: $449.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Official Description: 199807!1700!2312!BZ005!NAVAL SEA SYSTEMS COMMAND !N0002498C5197 !A!*!* !19980414!19980930!834951691!834951691!834951691!N!02769!LOCKHEED MARTIN CORPORATION !6801 ROCKLEDGE DR !BETHESDA !MD!20817!47850!005!34!MOORESTOWN !BURLINGTON !NEW JERSEY!0001!+000005263606!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A3 !SHIPS !2CNZ!CG-47 AEGIS !8711!3!*!*!*!B!A!*!D !N!R!1!001!N!1A!Z!W!Z!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!D!N!*!*!*!*!*!
Place of Performance
Location: MOORESTOWN, BURLINGTON County, NEW JERSEY, 08057
Plain-Language Summary
Department of Defense obligated $1.88 billion to LOCKHEED MARTIN CORPORATION for work described as: 199807!1700!2312!BZ005!NAVAL SEA SYSTEMS COMMAND !N0002498C5197 !A!*!* !19980414!19980930!834951691!834951691!834951691!N!02769!LOCKHEED MARTIN CORPORATION !6801 ROCKLEDGE DR !BETHESDA !MD!20817!47850!005!34!MOORESTOWN !BURLIN… Key points: 1. The contract, valued at $834,951,691, is for engineering technical services related to the CG-47 AEGIS program. 2. Lockheed Martin Corporation, a major defense contractor, secured this award. 3. The contract was not competed, raising potential concerns about price discovery and value for taxpayer money. 4. The sector is Defense, specifically IT and Ships, with a significant portion allocated to engineering services.
Value Assessment
Rating: questionable
The contract value of $834,951,691 for engineering technical services is substantial. Without competitive bidding, it's difficult to benchmark against similar contracts to definitively assess its pricing.
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 for the government compared to a competitive process.
Taxpayer Impact: The lack of competition for a contract of this magnitude raises concerns about the efficient use of taxpayer funds.
Public Impact
Taxpayers may be paying a premium due to the absence of competitive bidding. The long duration of the contract (from 1998 to 2009) suggests a significant, ongoing need for these services. The AEGIS program is critical for naval defense, making the reliability of these engineering services essential.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus contract type
- Long contract duration
Positive Signals
- Award to a major defense contractor with established expertise
- Services are critical to a key defense program
Sector Analysis
This contract falls within the Defense sector, specifically related to shipbuilding and advanced weapon systems like AEGIS. Engineering services are a critical component of defense procurement, often involving complex technical requirements.
Small Business Impact
The awardee is Lockheed Martin Corporation, a large business. There is no indication in the data provided that small businesses were involved as subcontractors.
Oversight & Accountability
The contract type is 'Cost Plus Award Fee', which requires careful oversight to ensure costs are reasonable and award fees are justified based on performance. The 'not competed' status warrants scrutiny.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition may lead to inflated costs.
- Cost-plus contract type can incentivize higher spending.
- Potential for contractor lock-in due to specialized services.
- Long contract duration increases exposure to cost overruns.
- Limited transparency on pricing due to sole-source nature.
Tags
engineering-services, department-of-defense, nj, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.88 billion to LOCKHEED MARTIN CORPORATION. 199807!1700!2312!BZ005!NAVAL SEA SYSTEMS COMMAND !N0002498C5197 !A!*!* !19980414!19980930!834951691!834951691!834951691!N!02769!LOCKHEED MARTIN CORPORATION !6801 ROCKLEDGE DR !BETHESDA !MD!20817!47850!005!34!MOORESTOWN !BURLINGTON !NEW JERSEY!0001!+000005263606!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A3 !SHIPS !2CNZ!CG-47 AEGIS !8711!3!*!*!*!B!A!*!D !N!R!1!0
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 $1.88 billion.
What is the period of performance?
Start: 1998-04-14. End: 2009-09-30.
What was the justification for awarding this contract on a sole-source basis instead of through a competitive process?
Sole-source awards are typically justified when only one responsible source can provide the required supplies or services, or when there's a compelling urgency. For complex defense systems like AEGIS, specific technical expertise or proprietary knowledge held by a single contractor might be the reason. However, the government must still demonstrate that competition was not feasible or advantageous.
How can the government ensure cost-effectiveness and prevent overspending on a cost-plus contract awarded without competition?
Effective oversight is crucial. This includes rigorous auditing of costs, establishing clear performance metrics for award fees, and negotiating fair and reasonable profit margins. Regular reviews of the contract's necessity and scope can also help prevent scope creep and ensure funds are used efficiently. Benchmarking against similar, competitively awarded contracts, where possible, can also provide cost insights.
What is the long-term strategic value of this engineering support to the AEGIS program and the Navy?
Engineering technical services are vital for the sustainment, modernization, and operational effectiveness of complex systems like AEGIS. This support ensures the platform remains capable against evolving threats, incorporates necessary upgrades, and maintains readiness. The long duration suggests a continuous need for specialized expertise to manage the lifecycle of this critical naval defense asset.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Address: 199 BORTON LANDING RD, MOORESTOWN, NJ, 08057
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NOT OBTAINED - WAIVED
Timeline
Start Date: 1998-04-14
Current End Date: 2009-09-30
Potential End Date: 2009-09-30 00:00:00
Last Modified: 2024-09-26
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