Lockheed Martin awarded $17M+ for infrastructure sustainment, a sole-source contract for IT services

Contract Overview

Contract Amount: $17,085,620 ($17.1M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2020-09-10

End Date: 2024-08-30

Contract Duration: 1,450 days

Daily Burn Rate: $11.8K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: INFRASTRURE SUSTAINMENT AND MAINTENANCE SERVICES

Place of Performance

Location: LITTLETON, JEFFERSON County, COLORADO, 80127

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $17.1 million to LOCKHEED MARTIN CORPORATION for work described as: INFRASTRURE SUSTAINMENT AND MAINTENANCE SERVICES Key points: 1. Contract awarded on a sole-source basis, limiting competitive pricing benefits. 2. Significant duration of 1450 days suggests a long-term need for these services. 3. The contract type (Cost Plus Fixed Fee) can lead to cost overruns if not managed carefully. 4. IT systems design services are critical for modern defense operations. 5. The awardee, Lockheed Martin, is a major defense contractor with extensive experience. 6. Geographic location in Colorado may indicate a specific operational need or facility.

Value Assessment

Rating: fair

Benchmarking the value of this $17M+ contract is challenging without more detailed cost breakdowns and comparisons to similar sole-source IT sustainment contracts. The Cost Plus Fixed Fee structure introduces inherent risk for cost escalation. While Lockheed Martin is a reputable contractor, the lack of competition means taxpayers may not be receiving the most competitive pricing possible for these essential IT services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This approach is typically used when only one vendor can provide the required services, often due to proprietary technology, unique capabilities, or urgent needs. The lack of competition means there was no opportunity for multiple bidders to offer proposals, potentially impacting price discovery and the government's ability to secure the lowest possible price.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the price reductions typically achieved through competitive bidding processes. This can result in higher overall costs for the government.

Public Impact

The Department of Defense benefits from sustained and maintained IT infrastructure. Essential computer systems design services are delivered to support defense operations. The primary geographic impact is in Colorado, where the services are likely being performed. The contract supports the workforce of Lockheed Martin, a major defense employer.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Cost Plus Fixed Fee contract type carries a risk of cost overruns if not closely monitored.
Lack of transparency in the justification for sole-source award.
Long contract duration could mask inefficiencies if performance is not rigorously assessed.

Positive Signals

Award to a highly experienced and reputable contractor (Lockheed Martin).
Contract addresses critical infrastructure sustainment and maintenance needs.
Clear delivery order structure within a larger framework.
Defined period of performance with a clear end date.

Sector Analysis

This contract falls within the Information Technology sector, specifically Computer Systems Design Services. The IT services market is vast and highly competitive, but sole-source awards bypass this competition. Comparable spending benchmarks for IT sustainment and design services vary widely based on complexity and scope. However, large sole-source awards to major defense contractors like Lockheed Martin are common for specialized, mission-critical systems where unique expertise is required.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the prime contractor is Lockheed Martin Corporation, a large business. There is no explicit information provided regarding subcontracting plans for small businesses. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem is likely minimal, and opportunities for small businesses to participate in this specific contract are limited.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The 'st': 'CO' designation might indicate specific oversight related to the Colorado region. Transparency regarding the justification for the sole-source award and detailed performance metrics would be crucial for assessing accountability. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Defense IT Modernization Programs
Infrastructure Sustainment Contracts
Computer Systems Design Services
Lockheed Martin Corporation Contracts
Sole-Source IT Awards

Risk Flags

Sole-source award
Cost-plus contract type
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.1 million to LOCKHEED MARTIN CORPORATION. INFRASTRURE SUSTAINMENT AND MAINTENANCE 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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $17.1 million.

What is the period of performance?

Start: 2020-09-10. End: 2024-08-30.

What is the specific justification for awarding this contract on a sole-source basis to Lockheed Martin Corporation?

The provided data indicates the contract was awarded as 'NOT COMPETED' (ct: NOT COMPETED), which is synonymous with a sole-source award. The specific justification for this sole-source determination is not detailed in the provided data. Typically, sole-source awards are justified when only one responsible source is available to meet the government's needs, often due to proprietary technology, unique capabilities, or urgent requirements. Without further documentation, such as a Justification and Approval (J&A) document, the precise reasons remain unknown. This lack of transparency can be a concern for ensuring fair and competitive procurement practices.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other pricing arrangements for similar IT sustainment services?

The Cost Plus Fixed Fee (CPFF) contract type is characterized by the government reimbursing the contractor for allowable costs plus a fixed fee representing profit. This structure is often used when the scope of work is not precisely defined or when there is uncertainty in the costs. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers more flexibility for the contractor but carries a higher risk of cost overruns for the government if costs are not meticulously managed and controlled. Other arrangements like Cost Plus Incentive Fee (CPIF) or Cost Plus Award Fee (CPAF) introduce performance incentives. For IT sustainment, FFP is often preferred for well-defined services to ensure cost certainty, while CPFF might be used for research, development, or complex integration projects where cost estimation is difficult.

What are the potential risks associated with a long-duration contract (1450 days) for IT infrastructure sustainment?

A long-duration contract like this one (1450 days, approximately 4 years) for IT infrastructure sustainment presents several potential risks. Firstly, technology evolves rapidly in the IT sector; a contract spanning several years might not account for necessary upgrades or shifts in technological paradigms, potentially leading to outdated systems or the need for costly modifications. Secondly, long-term reliance on a single contractor, especially under a sole-source arrangement, can reduce incentives for innovation and efficiency over time. Thirdly, the government's ability to adapt to changing requirements or to seek more competitive pricing diminishes significantly. Finally, without robust performance metrics and oversight, there's a risk of complacency or scope creep, leading to increased costs and potentially suboptimal service delivery.

What is the historical spending pattern for 'INFRASTRURE SUSTAINMENT AND MAINTENANCE SERVICES' within the Department of Defense?

The provided data focuses on a single contract award of $17,085,620.05 for 'INFRASTRURE SUSTAINMENT AND MAINTENANCE SERVICES' to Lockheed Martin Corporation. To understand historical spending patterns, one would need to analyze broader contract databases (like FPDS or USASpending.gov) for this specific service category and agency over multiple fiscal years. This would involve identifying trends in total obligated amounts, the number of contracts awarded, the mix of competition types (competed vs. sole-source), and the primary contractors receiving awards. Without this broader dataset, it's impossible to establish a historical spending pattern based solely on this individual contract.

How does the North American Industry Classification System (NAICS) code '541512' (Computer Systems Design Services) typically align with defense infrastructure sustainment needs?

The NAICS code 541512, 'Computer Systems Design Services,' is highly relevant to defense infrastructure sustainment. These services encompass designing and integrating computer hardware and software, often involving complex systems architecture, network design, and the development of custom software solutions. For the Department of Defense, maintaining and upgrading sophisticated IT infrastructure is critical for command, control, communications, intelligence, and logistics. Therefore, contracts under this NAICS code frequently involve ensuring the operability, security, and efficiency of the defense IT backbone, which includes sustainment activities like system updates, troubleshooting, and performance optimization.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 12999 DEER CREEK CANYON RD, LITTLETON, CO, 80127

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

Financial Breakdown

Contract Ceiling: $17,085,620

Exercised Options: $17,085,620

Current Obligation: $17,085,620

Actual Outlays: $2,165,357

Subaward Activity

Number of Subawards: 11

Total Subaward Amount: $577,475

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0003919D0006

IDV Type: IDC

Timeline