DoD's $10.9M FY18 Engineering Services Contract with Lockheed Martin Raises Concerns Over Competition and Value
Contract Overview
Contract Amount: $10,916,160 ($10.9M)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2018-03-01
End Date: 2020-04-25
Contract Duration: 786 days
Daily Burn Rate: $13.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: FY18 MSPA
Place of Performance
Location: SUNNYVALE, SANTA CLARA County, CALIFORNIA, 94089
Plain-Language Summary
Department of Defense obligated $10.9 million to LOCKHEED MARTIN CORP for work described as: FY18 MSPA Key points: 1. Significant contract value of over $10.9 million awarded. 2. Sole-source award to Lockheed Martin limits competitive pricing. 3. Potential for inflated costs due to lack of competition. 4. Engineering services sector is critical for defense operations.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee (CPFF) structure, combined with a lack of competition, raises concerns about cost control and potential overpricing. Benchmarking against similar CPFF contracts for engineering services is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning no other vendors were considered. This significantly limits price discovery and potentially leads to higher costs for taxpayers as there was no competitive pressure to offer the best value.
Taxpayer Impact: The lack of competition in this sole-source award may result in taxpayers paying more than necessary for the engineering services provided.
Public Impact
Taxpayers may be overpaying for essential engineering services due to the absence of competitive bidding. The Department of Defense relies on these services, making oversight crucial to ensure effective use of funds. Lack of transparency in sole-source contracts can erode public trust in government spending.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of competition
- Potential for cost overruns
Positive Signals
- Awarded to a known defense contractor
- Contract duration aligns with project needs
Sector Analysis
This contract falls within the Engineering Services sector, which is vital for the Department of Defense's research, development, and maintenance activities. Spending in this sector can vary widely based on project complexity and technological requirements.
Small Business Impact
The contract was awarded to Lockheed Martin, a large prime contractor, and there is no indication of small business participation. This suggests a missed opportunity to support small businesses within the defense supply chain.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the contractor is delivering services efficiently and at a reasonable cost. Accountability can be strengthened by requiring detailed performance metrics and cost justifications.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competitive bidding
- Potential for cost overruns
- Limited transparency
- No small business participation
- Cost-plus contract type
Tags
engineering-services, department-of-defense, ca, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $10.9 million to LOCKHEED MARTIN CORP. FY18 MSPA
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORP.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $10.9 million.
What is the period of performance?
Start: 2018-03-01. End: 2020-04-25.
What specific engineering services were procured under this contract, and how do they align with the Department of the Navy's strategic objectives?
The contract was for engineering services under NAICS code 541330. While specific details are not provided, these services typically encompass design, consulting, and technical support for defense systems. Alignment with strategic objectives would require a review of the contract's statement of work and the Navy's acquisition priorities for FY18.
Given the sole-source award, what mechanisms were in place to ensure the fixed fee was fair and reasonable, and what was the basis for its determination?
For sole-source Cost Plus Fixed Fee contracts, agencies typically rely on contractor cost proposals, historical pricing data, and independent government cost estimates to determine a fair and reasonable fixed fee. The specific mechanisms and basis for determination for this contract would be detailed in the contract file.
How does the duration and cost of this contract compare to similar engineering services contracts awarded competitively by the Department of Defense?
Direct comparison is challenging due to the sole-source nature and lack of detailed cost data. However, competitively awarded contracts often achieve lower overall costs and better value. The 786-day duration suggests a substantial project, and without competition, the risk of inflated costs over this period is elevated.
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
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 1111 LOCKHEED MARTIN WAY, SUNNYVALE, CA, 94089
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $10,916,160
Exercised Options: $10,916,160
Current Obligation: $10,916,160
Subaward Activity
Number of Subawards: 29
Total Subaward Amount: $10,162,502
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2018-03-01
Current End Date: 2020-04-25
Potential End Date: 2020-04-25 00:00:00
Last Modified: 2025-09-30
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