DoD's $14M Engineering Services Contract with Lockheed Martin: A 5-Year Award Under Full and Open Competition
Contract Overview
Contract Amount: $13,995,681 ($14.0M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2018-09-24
End Date: 2023-09-23
Contract Duration: 1,825 days
Daily Burn Rate: $7.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Other
Official Description: ENGINEERING SERVICES
Place of Performance
Location: MANASSAS, PRINCE WILLIAM County, VIRGINIA, 20110
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $14.0 million to LOCKHEED MARTIN CORPORATION for work described as: ENGINEERING SERVICES Key points: 1. Significant contract value of $13.99M awarded to a major defense contractor. 2. Full and open competition was utilized, suggesting a robust price discovery process. 3. Contract type is Cost Plus Incentive Fee, which can lead to cost overruns if not managed closely. 4. The contract spans 5 years, indicating a long-term need for these engineering services.
Value Assessment
Rating: good
The contract value of $13.99M for 5 years of engineering services appears reasonable given the contractor and the nature of the services. Benchmarking against similar large-scale engineering contracts would provide a more definitive assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The use of full and open competition is a positive indicator for price discovery. This method allows multiple bidders to compete, theoretically driving down costs and ensuring the government receives the best value.
Taxpayer Impact: The competitive bidding process is expected to have resulted in a fair price, maximizing taxpayer value for the engineering services procured.
Public Impact
Ensures continued engineering support for critical Department of the Navy programs. Supports a major defense contractor, potentially impacting employment and the defense industrial base. The long-term nature of the contract suggests ongoing strategic importance of these services.
Waste & Efficiency Indicators
Waste Risk Score: 76 / 10
Warning Flags
- Cost Plus Incentive Fee structure requires careful monitoring to control costs.
- Long contract duration (5 years) may not adapt well to rapidly changing technological needs.
Positive Signals
- Full and open competition utilized.
- Awarded to a reputable and experienced contractor.
- Clear contract end date provides a defined period for services.
Sector Analysis
This contract falls within the professional, scientific, and technical services sector, specifically engineering. Spending in this sector is substantial within the DoD, supporting complex weapon systems and infrastructure development.
Small Business Impact
The contract was awarded to Lockheed Martin Corporation, a large prime contractor. There is no indication of subcontracting opportunities for small businesses within the provided data.
Oversight & Accountability
The contract is managed by the Department of the Navy, a component of the Department of Defense. Standard DoD oversight mechanisms should be in place to ensure performance and financial accountability.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Potential for cost overruns due to CPIF structure.
- Long contract duration may not be agile to technological shifts.
- Lack of explicit small business participation noted.
- Limited detail on specific engineering services provided.
Tags
engineering-services, department-of-defense, va, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $14.0 million to LOCKHEED MARTIN CORPORATION. ENGINEERING SERVICES
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $14.0 million.
What is the period of performance?
Start: 2018-09-24. End: 2023-09-23.
What specific engineering services are being provided under this contract, and how do they align with current and future naval capabilities?
The contract specifies 'Engineering Services' under NAICS code 541330. While the exact nature of these services isn't detailed, they likely encompass design, development, testing, and integration for naval platforms or systems. Understanding the specific technical requirements is crucial to assess their alignment with evolving naval technological needs and strategic objectives.
What are the potential risks associated with the Cost Plus Incentive Fee (CPIF) contract type, and how are they being mitigated?
CPIF contracts carry the risk of cost overruns if the contractor's costs exceed targets, although the incentive fee aims to reward efficiency. Mitigation strategies typically involve robust government oversight, clear performance metrics, detailed cost tracking, and negotiation of realistic target costs and fee structures to ensure contractor alignment with cost-saving goals.
How does the $14M contract value compare to industry benchmarks for similar long-term engineering support contracts within the defense sector?
Benchmarking this $14M, 5-year contract requires detailed comparison with similar scope, complexity, and duration contracts. Factors like the specific engineering disciplines, security requirements, and the contractor's overhead rates influence pricing. Without access to proprietary cost data or a comprehensive market analysis, a precise benchmark is difficult, but the value appears substantial for specialized defense engineering.
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: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N0003917R0056
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp
Address: 9500 GODWIN DR, MANASSAS, VA, 20110
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $15,050,129
Exercised Options: $15,050,129
Current Obligation: $13,995,681
Actual Outlays: $209,057
Subaward Activity
Number of Subawards: 8
Total Subaward Amount: $367,818
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2018-09-24
Current End Date: 2023-09-23
Potential End Date: 2023-09-23 00:00:00
Last Modified: 2025-09-08
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