Lockheed Martin awarded $620M for engineering services, a cost-plus award fee contract

Contract Overview

Contract Amount: $62,032,480 ($62.0M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2000-09-30

End Date: 2005-12-31

Contract Duration: 1,918 days

Daily Burn Rate: $32.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200012!1700!005507!D0222 !SPACE AND NAVAL WARFARE SYSTEMS !N0003900C2223 !A!*!BASIC !20000930!20011231!019710586!834951691!834951691!N!52088!LOCKHEED MARTIN CORPORATION !9500 GODWIN DR !MANASSAS !VA!20110!48952!683!51!MANASSAS !MANASSAS (CITY) !VIRGINIA !0001!+000003827382!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A7 !ELECTRONICS AND COMMUNICATION !2000!NOT DISCERNABLE OR CLASSIFIED !8711!3!*!*!*!B!A!*!D !N!R!1!001!N!1B!Z!Y!Z!* !* !N!C!*!B!B!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 $62.0 million to LOCKHEED MARTIN CORPORATION for work described as: 200012!1700!005507!D0222 !SPACE AND NAVAL WARFARE SYSTEMS !N0003900C2223 !A!*!BASIC !20000930!20011231!019710586!834951691!834951691!N!52088!LOCKHEED MARTIN CORPORATION !9500 GODWIN DR !MANASSAS !VA!20110!48952!683!51!MANASSAS !MAN… Key points: 1. Contract awarded for engineering and technical services, indicating a need for specialized expertise. 2. The cost-plus award fee structure incentivizes performance while managing costs. 3. A long contract duration of 1918 days suggests a significant, ongoing requirement. 4. The contract was not competed, raising questions about potential cost efficiencies. 5. The primary contractor, Lockheed Martin, is a major defense industry player. 6. Services are being provided in Virginia, a key hub for defense contracting.

Value Assessment

Rating: fair

The total award amount of $620,324,80 is substantial. Without specific benchmarks for comparable engineering technical services contracts, it is difficult to definitively assess value for money. The cost-plus award fee (CPAF) structure allows for flexibility but can sometimes lead to higher costs if not managed rigorously. The contract's duration of over five years suggests a long-term need, and the pricing will depend heavily on the specific technical services rendered and the efficiency of the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This could be due to the specialized nature of the services required, the contractor's unique qualifications, or other factors that precluded a competitive bidding process. The lack of competition means that the government did not benefit from the price discovery that typically occurs in a competitive environment, potentially leading to higher costs.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure to drive down prices. The government's ability to negotiate the best possible price is limited in a sole-source scenario.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Naval Sea Systems Command, which requires advanced engineering and technical support. The services delivered are critical for the development, maintenance, and enhancement of naval warfare systems. The geographic impact is concentrated in Manassas, Virginia, where the contractor is located. This contract supports a significant number of highly skilled jobs in engineering and technical fields within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher costs for taxpayers.
Cost-plus award fee contracts can sometimes incentivize cost overruns if not closely monitored.
Long contract duration could lead to vendor lock-in and reduced flexibility.

Positive Signals

Award to a major defense contractor with extensive experience.
Cost-plus award fee structure can incentivize high performance and quality.
Contract duration suggests a stable, long-term requirement being met.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader defense industrial base. The market for specialized engineering and technical services for defense applications is dominated by a few large, established companies like Lockheed Martin. Spending in this area is often driven by complex weapon system development and sustainment requirements. Benchmarks for comparable contracts are difficult to establish publicly due to the proprietary and specialized nature of the services.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by the 'ss' field being false. There is no explicit information provided regarding subcontracting plans for small businesses. The large value and sole-source nature of this award suggest that opportunities for small businesses may be limited unless they are direct subcontractors to Lockheed Martin.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor compliance with terms and conditions. The cost-plus award fee structure necessitates rigorous financial and performance oversight to ensure value for money. Transparency may be limited due to the sole-source nature and potential classification of the specific services provided.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Defense Engineering Services
Lockheed Martin Defense Contracts
Cost-Plus Award Fee Contracts
Sole-Source Defense Procurements

Risk Flags

Sole-source award lacks competitive pricing.
Cost-plus structure requires diligent oversight to control costs.
Potential for cost overruns if performance metrics are not strictly managed.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $62.0 million to LOCKHEED MARTIN CORPORATION. 200012!1700!005507!D0222 !SPACE AND NAVAL WARFARE SYSTEMS !N0003900C2223 !A!*!BASIC !20000930!20011231!019710586!834951691!834951691!N!52088!LOCKHEED MARTIN CORPORATION !9500 GODWIN DR !MANASSAS !VA!20110!48952!683!51!MANASSAS !MANASSAS (CITY) !VIRGINIA !0001!+000003827382!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A7 !ELECTRONICS AND COMMUNICATION !2000!NOT DISCERNABLE OR CLASSIFIED !8711!3!*!*!*!B!A!*!D !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 $62.0 million.

What is the period of performance?

Start: 2000-09-30. End: 2005-12-31.

What is the historical spending pattern for engineering and technical services by the Department of Defense, and how does this contract compare?

The Department of Defense consistently allocates significant portions of its budget to engineering and technical services, essential for maintaining its technological edge and supporting complex weapon systems. Historical data shows billions of dollars spent annually across various branches and agencies on R&D, system integration, and sustainment engineering. This $620 million contract, while substantial for a single award, represents a fraction of the DoD's overall annual expenditure in this category. Comparing it requires analyzing trends in contract types (e.g., CPAF vs. FFP), duration, and the specific services procured. Without more granular data on comparable contracts, it's challenging to pinpoint its exact position relative to historical norms, but its sole-source nature and CPAF structure are notable characteristics.

What specific engineering and technical services are being provided under this contract?

The provided data indicates the contract is for 'ENGINEERING TECHNICAL SERVICES' under PSC code R425. While the specific details of these services are not fully elaborated in the abbreviated data, this category typically encompasses a wide range of activities crucial for defense systems. This can include research and development support, system design and integration, testing and evaluation, lifecycle management, cybersecurity engineering, and technical support for operational systems. Given the awardee is Lockheed Martin and the awarding agency is Naval Sea Systems Command (NAVSEA), it is highly probable that these services relate to naval platforms, including ships, submarines, and associated combat systems, requiring specialized expertise in areas like electronics, communications, and weapons platforms.

What are the risks associated with a sole-source Cost Plus Award Fee (CPAF) contract of this magnitude?

Sole-source CPAF contracts present several risks. The primary risk is the potential for inflated costs due to the lack of competitive bidding, as the government cannot leverage market competition to ensure the lowest possible price. For CPAF, there's a risk that the 'award fee' component could be achieved even with suboptimal performance or cost control if the criteria are not stringently defined and monitored. Furthermore, the contractor might have less incentive to innovate or find efficiencies if their base costs are covered and award fees are attainable through less demanding means. Robust government oversight, clear performance metrics, and stringent negotiation are critical to mitigate these risks.

How does Lockheed Martin's track record influence the assessment of this contract's performance potential?

Lockheed Martin is one of the largest and most experienced defense contractors globally, with a long history of delivering complex systems and services to the U.S. military and its allies. Their extensive track record suggests a high probability of technical capability and program execution. However, past performance is not a guarantee of future success. While their size and experience can be seen as a positive signal for capability, it also means they handle numerous large contracts simultaneously, potentially stretching resources. Assessing this specific contract's performance potential also requires looking at their performance on similar NAVSEA contracts and their ability to manage costs effectively within the CPAF structure.

What is the potential impact of this contract on the small business ecosystem?

Given that this contract was awarded on a sole-source basis and does not appear to have a small business set-aside, its direct positive impact on the small business ecosystem is likely minimal. Large sole-source contracts often mean that the prime contractor receives the bulk of the funding. While prime contractors like Lockheed Martin are often required to have small business subcontracting plans for their overall portfolio, the specific subcontracting opportunities generated by this particular contract are not detailed in the provided data. Without explicit subcontracting goals tied to this award, small businesses may not see significant direct benefits unless they are already established suppliers to Lockheed Martin in this domain.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL 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

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 9500 GODWIN DR, MANASSAS, VA, 20110

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline