Lockheed Martin awarded $48.6M for UK Fleet Support, a sole-source engineering services contract

Contract Overview

Contract Amount: $48,565,335 ($48.6M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2017-10-01

End Date: 2019-03-31

Contract Duration: 546 days

Daily Burn Rate: $88.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: FY18 UK FLEET SUPPORT

Place of Performance

Location: UNIONDALE, NASSAU County, NEW YORK, 11553

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $48.6 million to LOCKHEED MARTIN CORPORATION for work described as: FY18 UK FLEET SUPPORT Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Engineering services for UK fleet support indicate a specialized, high-value requirement. 3. Contract duration of 546 days suggests a medium-term project. 4. The cost-plus-fixed-fee structure may incentivize cost overruns. 5. Awarded by the Defense Contract Management Agency, highlighting defense sector focus. 6. The contract's value is significant within the engineering services category.

Value Assessment

Rating: fair

The contract value of $48.6 million for engineering services over approximately 18 months appears substantial. Benchmarking this against similar sole-source contracts for specialized fleet support is challenging due to limited public data. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex services, carries inherent risks of cost escalation if not tightly managed. Without more comparable data, assessing the true value-for-money is difficult, but the lack of competition suggests potential for higher pricing than in a competitive environment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the requirement. The absence of competition means that price discovery through market forces was bypassed, potentially leading to higher costs for the government compared to a fully competed contract.

Taxpayer Impact: Taxpayers may face higher costs due to the lack of competitive bidding. Without multiple offers, the government has less leverage to negotiate the lowest possible price.

Public Impact

The primary beneficiaries are the UK fleet operations, receiving essential engineering support. Services delivered include specialized engineering expertise crucial for maintaining naval assets. The geographic impact is primarily within New York, where the contractor is located. Workforce implications include employment for engineers and technical staff at Lockheed Martin.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost-plus-fixed-fee contract type can lead to cost overruns if not managed stringently.
Lack of transparency in the justification for sole-source award.
Potential for contractor to leverage unique position for future sole-source opportunities.

Positive Signals

Contract awarded to a major defense contractor with established capabilities.
Engineering services are critical for maintaining complex defense assets.
Contract duration suggests a defined scope and manageable project timeline.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense-related operations. The market for specialized defense engineering services is often characterized by high barriers to entry, proprietary knowledge, and long-standing relationships between government agencies and prime contractors. Spending in this area is driven by the need to maintain and modernize complex military assets, such as naval fleets. Comparable spending benchmarks are difficult to establish without detailed knowledge of the specific fleet support requirements.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the contractor, Lockheed Martin Corporation, is a large business. There is no explicit information regarding subcontracting plans for small businesses within this data. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, though large prime contractors often have broader subcontracting programs.

Oversight & Accountability

Oversight for this contract would likely be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures would be embedded in the contract terms, including performance standards and payment schedules tied to milestones. Transparency is limited due to the sole-source nature and the proprietary aspects of defense contracts. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Ship Systems Engineering Support
Defense Engineering and Technical Services
Fleet Maintenance and Modernization Programs
Foreign Military Sales Support (if applicable to UK)

Risk Flags

Sole-source award
Cost-plus-fixed-fee pricing
Lack of competitive bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $48.6 million to LOCKHEED MARTIN CORPORATION. FY18 UK FLEET SUPPORT

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 $48.6 million.

What is the period of performance?

Start: 2017-10-01. End: 2019-03-31.

What is Lockheed Martin Corporation's track record with similar sole-source engineering contracts for defense fleets?

Lockheed Martin Corporation, as a major defense contractor, has a long history of performing complex engineering and support services for various defense platforms, including naval fleets. While specific details on all sole-source awards are not publicly available, the company's extensive experience suggests a strong capability in this domain. Their track record often involves large-scale, multi-year contracts requiring specialized technical expertise. However, the nature of sole-source awards means that direct comparisons of performance and pricing against competitive bids are not readily available. Government accountability reports and contract performance reviews, if publicly accessible, would offer more insight into their specific performance on past sole-source engagements.

How does the $48.6 million contract value compare to other engineering services contracts awarded by the Department of Defense?

The $48.6 million contract value for engineering services is a significant sum, placing it in the mid-to-large range for individual contract awards within this category. The Department of Defense awards billions of dollars annually for engineering and technical services, encompassing a wide spectrum of needs from basic research and development to complex system integration and sustainment. While this specific contract's value is substantial, it is not extraordinary when viewed against the backdrop of the DoD's overall spending. However, its significance is amplified by its sole-source nature and its focus on specialized UK fleet support, suggesting a critical and potentially unique requirement that commanded this level of investment.

What are the primary risks associated with this sole-source, cost-plus-fixed-fee contract?

The primary risks associated with this contract stem from its sole-source and cost-plus-fixed-fee (CPFF) structure. Sole-sourcing eliminates competitive pressure, potentially leading to higher prices and reduced incentive for the contractor to innovate or optimize costs. The CPFF structure, while providing flexibility for evolving requirements, carries the risk of cost overruns. If the contractor's actual costs exceed initial estimates, these increases are borne by the government, up to the agreed-upon fixed fee. Effective oversight, stringent cost controls, and clear performance metrics are crucial to mitigate these risks and ensure value for taxpayer money.

What is the expected program effectiveness and impact of these engineering services on UK fleet readiness?

The expected program effectiveness hinges on Lockheed Martin's ability to deliver the specialized engineering services required for the UK fleet's operational readiness. These services are likely critical for maintaining the functionality, safety, and potentially the modernization of naval assets. If executed successfully, the contract should contribute directly to the UK's defense capabilities by ensuring its fleet remains operational and capable of fulfilling its mission requirements. The impact on readiness is expected to be positive, assuming the contractor meets performance standards and addresses the technical challenges effectively. The specific impact metrics would be defined within the contract's statement of work.

How has federal spending on engineering services for defense fleets evolved over the past five fiscal years?

Federal spending on engineering services for defense fleets has generally remained robust, reflecting the ongoing need to maintain and modernize complex naval assets. While specific figures for 'UK Fleet Support' are not publicly detailed over multiple years, overall spending on defense engineering and technical services fluctuates based on geopolitical factors, modernization programs, and budget allocations. Trends often show increased investment during periods of heightened global security concerns or when major platform upgrades are initiated. Conversely, spending might decrease during periods of fiscal austerity or when older platforms are retired without immediate replacement programs. Analyzing broader defense engineering service categories provides a general context for this contract's spending level.

Industry Classification

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

Product/Service Code: TECHNICAL REPRESENTATIVE SVCS. › TECHNICAL REPRESENTATIVE SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0003018R0002

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 55 CHARLES LINDBERGH BLVD, UNIONDALE, NY, 11553

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $105,830,451

Exercised Options: $52,975,319

Current Obligation: $48,565,335

Subaward Activity

Number of Subawards: 32

Total Subaward Amount: $3,066,447

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline