DoD's $44.3M contract with Lockheed Martin for engineering services shows a significant duration of 2304 days

Contract Overview

Contract Amount: $44,328,515 ($44.3M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 1999-12-08

End Date: 2006-03-30

Contract Duration: 2,304 days

Daily Burn Rate: $19.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200003!1700!005227!D0222 !SPACE AND NAVAL WARFARE SYSTEMS !N0003900C2206 !A!*!* !19991208!20000930!019710586!834951691!834951691!N!52088!LOCKHEED MARTIN CORPORATION !9500 GODWIN DR !MANASSAS !VA!20110!48952!683!51!MANASSAS !MANASSAS (CITY) !VIRGINIA !0001!+000002279707!N!N!000000000000!K058!MODIFICATION OF EQ/COMMUNICATION EQUIPMENT !S1 !SERVICES !2000!NOT DISCERNABLE OR CLASSIFIED !8711!3!*!*!*!B!A!*!A !N!R!2!002!B!* !C!N!Z!* !* !N!C!*!A!A!A!A!A!A!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: MANASSAS, PRINCE WILLIAM County, VIRGINIA, 20110

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $44.3 million to LOCKHEED MARTIN CORPORATION for work described as: 200003!1700!005227!D0222 !SPACE AND NAVAL WARFARE SYSTEMS !N0003900C2206 !A!*!* !19991208!20000930!019710586!834951691!834951691!N!52088!LOCKHEED MARTIN CORPORATION !9500 GODWIN DR !MANASSAS !VA!20110!48952!683!51!MANASSAS !MAN… Key points: 1. The contract's extended duration suggests a long-term need for the services provided. 2. Lockheed Martin, a major defense contractor, was awarded this contract. 3. The contract type is 'Cost Plus Award Fee', indicating performance incentives. 4. Engineering services are crucial for defense systems development and maintenance. 5. The contract was awarded through full and open competition. 6. The value of the contract is substantial, reflecting the complexity of the services.

Value Assessment

Rating: fair

The contract value of $44.3 million over 2304 days averages to approximately $19,273 per day. Benchmarking this against similar engineering services contracts is challenging without more specific service details. However, the 'Cost Plus Award Fee' structure implies that the final cost could vary based on performance, making a direct price comparison difficult. The long duration suggests a potentially stable, albeit high, cost for sustained support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition', suggesting that multiple bidders had the opportunity to compete. The data does not specify the number of bids received, but the competitive process is intended to foster price discovery and ensure the government receives the best value. The use of full and open competition is generally a positive indicator for market-based pricing.

Taxpayer Impact: A full and open competition process aims to leverage market forces to secure competitive pricing, potentially saving taxpayer dollars compared to less competitive award methods.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Naval Sea Systems Command, which relies on these engineering services. The services likely involve the modification of equipment and communication systems, crucial for naval operations. The geographic impact is centered around Manassas, Virginia, where Lockheed Martin's facility is located. This contract supports a significant number of jobs within Lockheed Martin and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Cost Plus Award Fee' structure can lead to cost overruns if not managed carefully, as contractor incentives are tied to performance rather than strict cost control.
The extended duration of over six years (2304 days) raises questions about the initial cost estimation and potential for scope creep.
Lack of specific details on the 'modification of equipment/communication' makes it difficult to assess the true value and necessity of the services.

Positive Signals

Awarded through 'Full and Open Competition', indicating a robust bidding process.
Lockheed Martin is a well-established defense contractor with a track record in complex systems.
The contract duration suggests a sustained and critical need for these engineering services by the Navy.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader Defense Industrial Base. The market for defense engineering services is substantial, driven by the continuous need for modernization, maintenance, and development of advanced military systems. Comparable spending benchmarks are difficult to establish without knowing the specific nature of the equipment and communication systems involved, but large, long-term contracts with major prime contractors like Lockheed Martin are common in this space.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it explicitly mention subcontracting plans for small businesses. As a large prime contract awarded to Lockheed Martin, there may be opportunities for small businesses to participate as subcontractors, but this is not guaranteed or detailed in the provided information. The primary focus appears to be on the prime contractor's capabilities.

Oversight & Accountability

The contract is managed by the Department of Defense, likely through the Defense Contract Management Agency (DCMA). Oversight mechanisms would typically include regular reporting requirements from the contractor, performance reviews, and financial audits. The 'Cost Plus Award Fee' structure necessitates close monitoring of performance metrics to ensure award fees are justified and that costs remain reasonable relative to the value delivered. Inspector General jurisdiction would apply for any investigations into fraud, waste, or abuse.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Defense Engineering Services
Lockheed Martin Defense Contracts
Communication Systems Modernization
Equipment Modification Contracts

Risk Flags

Long contract duration may indicate potential for cost growth or scope creep.
Lack of specific service details hinders comprehensive value assessment.
CPAF structure requires diligent oversight to manage costs effectively.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $44.3 million to LOCKHEED MARTIN CORPORATION. 200003!1700!005227!D0222 !SPACE AND NAVAL WARFARE SYSTEMS !N0003900C2206 !A!*!* !19991208!20000930!019710586!834951691!834951691!N!52088!LOCKHEED MARTIN CORPORATION !9500 GODWIN DR !MANASSAS !VA!20110!48952!683!51!MANASSAS !MANASSAS (CITY) !VIRGINIA !0001!+000002279707!N!N!000000000000!K058!MODIFICATION OF EQ/COMMUNICATION EQUIPMENT !S1 !SERVICES !2000!NOT DISCERNABLE OR CLASSIFIED !8711!3!*!*!*!B!A!*!A !N!R!

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 $44.3 million.

What is the period of performance?

Start: 1999-12-08. End: 2006-03-30.

What specific types of communication equipment were modified under this contract?

The provided data specifies 'MODIFICATION OF EQ/COMMUNICATION EQUIPMENT' but does not detail the specific types of equipment. This could range from tactical radios and satellite communication systems to shipboard network infrastructure. Understanding the exact nature of the equipment would allow for a more precise assessment of the technical complexity, the criticality of the services, and potential comparisons to industry standards for similar modifications. Without this detail, the scope remains broad, encompassing a wide array of potential naval communication assets.

How did the final cost compare to the initial estimated cost, given the 'Cost Plus Award Fee' structure?

The data provided does not include information on the initial estimated cost or how the final cost of $44,328,515.11 compared to it. For a 'Cost Plus Award Fee' (CPAF) contract, the government agrees to pay the contractor's allowable costs plus a fixed fee that is subject to incentives based on performance. To assess value for money, one would need to compare the final cost against the initial estimate and the performance achieved. If the contractor met or exceeded performance targets, the award fee would be justified. However, CPAF contracts inherently carry a risk of higher costs than fixed-price contracts if performance targets are ambitious or if cost controls are not rigorously applied by the contracting officer.

What were the key performance metrics used to determine the award fee for Lockheed Martin?

The specific performance metrics used to determine the award fee for this contract are not detailed in the provided data. In a 'Cost Plus Award Fee' (CPAF) contract, these metrics are typically defined in the contract's Performance Work Statement (PWS) and outline specific, measurable, achievable, relevant, and time-bound (SMART) objectives. For engineering services related to equipment and communication modification, these could include factors such as on-time delivery of modifications, adherence to technical specifications, system reliability post-modification, successful integration testing, and overall quality of engineering support. The contracting officer would evaluate Lockheed Martin's performance against these criteria to determine the amount of award fee, if any, to be paid.

What is the significance of the contract duration (2304 days) in relation to the total contract value?

A contract duration of 2304 days (approximately 6.3 years) for a total value of $44.3 million indicates a sustained, long-term requirement for the engineering services provided by Lockheed Martin. This translates to an average daily expenditure of roughly $19,273. Such a long duration suggests that the services are not for a one-off project but rather for ongoing support, maintenance, or incremental development of naval communication equipment. It implies a stable, albeit significant, investment by the Department of Defense in maintaining and potentially upgrading critical systems over an extended period, reflecting the lifecycle needs of military hardware.

How does the North American Industry Classification System (NAICS) code '541330' (Engineering Services) align with the contract description?

The North American Industry Classification System (NAICS) code '541330' precisely aligns with the contract description, which involves 'Engineering Services' for the 'MODIFICATION OF EQ/COMMUNICATION EQUIPMENT'. This code covers establishments primarily engaged in providing architectural, engineering, and related design services. Given that the contract involves modifying complex equipment and communication systems for the Navy, it necessitates specialized engineering expertise in areas such as systems integration, hardware/software modification, testing, and documentation. Therefore, the NAICS code accurately categorizes the core service being procured under this contract.

Industry Classification

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

Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 9500 GODWIN DR, MANASSAS, VA, 20110

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline