DoD awards $7.6M engineering support contract to Lockheed Martin, highlighting long-term engagement

Contract Overview

Contract Amount: $7,664,776 ($7.7M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2018-08-01

End Date: 2026-03-31

Contract Duration: 2,799 days

Daily Burn Rate: $2.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ENGINEERING AND SUBJECT MATTER EXPERT (SME) SUPPORT SERVICES

Place of Performance

Location: VIRGINIA BEACH, VIRGINIA BEACH CITY County, VIRGINIA, 23454

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $7.7 million to LOCKHEED MARTIN CORPORATION for work described as: ENGINEERING AND SUBJECT MATTER EXPERT (SME) SUPPORT SERVICES Key points: 1. Contract value represents a significant investment in specialized engineering expertise. 2. Sole awardee suggests a focused selection process for critical support services. 3. Extended performance period indicates a need for sustained technical assistance. 4. Contract type (Cost Plus Fixed Fee) may allow for flexibility but requires careful cost monitoring. 5. The Department of the Navy is the primary beneficiary of these engineering services. 6. Virginia is the state associated with this contract's performance location.

Value Assessment

Rating: good

The contract value of $7.6 million for engineering and SME support services appears reasonable given the duration and the contractor's established presence. Benchmarking against similar long-term, specialized engineering contracts within the Department of Defense would provide a more precise value-for-money assessment. The Cost Plus Fixed Fee (CPFF) pricing structure, while common for complex services, necessitates diligent oversight to ensure costs remain within expected parameters and that the fixed fee is justified by the scope and risk involved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited and evaluated. The presence of a single award suggests that Lockheed Martin Corporation was deemed the most advantageous offer, potentially based on technical capabilities, past performance, or a combination of factors. The competitive process, in theory, should drive price discovery and ensure fair market value, though the specific number of bids received is not detailed here.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to better pricing and innovative solutions, preventing potential overcharges associated with less competitive solicitations.

Public Impact

The Department of the Navy benefits from specialized engineering and subject matter expert support, crucial for its operational readiness and technological advancement. This contract ensures the availability of critical technical services that may not be readily available in-house. The primary geographic impact is in Virginia, where the contractor is located and likely performs the services. The contract supports a workforce of engineers and subject matter experts, contributing to specialized employment within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize cost overruns if not managed rigorously.
Long-term contracts may not always reflect the most current market pricing without periodic re-evaluation.
Reliance on a single contractor for extended periods could reduce future competitive opportunities.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
Lockheed Martin Corporation is a well-established defense contractor with a proven track record.
The extended duration indicates a stable and predictable need for these critical services.
The contract supports specialized engineering expertise vital for defense operations.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader aerospace and defense industry. The market for specialized engineering support services is substantial, driven by the complex technological needs of government agencies, particularly the Department of Defense. Spending in this area is often characterized by long-term engagements and high barriers to entry due to required expertise and security clearances. Comparable spending benchmarks would involve analyzing other large-scale engineering support contracts awarded by the Navy or other military branches for similar technical domains.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large prime contract awarded to Lockheed Martin Corporation, there may be opportunities for small businesses to participate as subcontractors. However, the extent of small business subcontracting is not detailed in the provided information and would require further investigation into the contract's specific clauses and performance reports.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy's contracting officers and program managers. Accountability measures are typically embedded within the contract terms, including performance metrics, reporting requirements, and payment schedules tied to deliverables. Transparency is facilitated through contract databases like FPDS, which provide basic award information. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Defense Engineering Services
Naval Support Contracts
Aerospace Engineering
Subject Matter Expert Services
Cost Plus Fixed Fee Contracts
Department of Defense IT and Engineering Support

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage potential cost overruns.
Long-term engagement may warrant periodic reviews to ensure continued market competitiveness.
Lack of detail on specific deliverables makes direct performance assessment challenging without further information.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $7.7 million to LOCKHEED MARTIN CORPORATION. ENGINEERING AND SUBJECT MATTER EXPERT (SME) SUPPORT 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 $7.7 million.

What is the period of performance?

Start: 2018-08-01. End: 2026-03-31.

What is Lockheed Martin Corporation's track record with similar engineering support contracts for the Department of the Navy?

Lockheed Martin Corporation has a long and extensive history of providing a wide array of engineering, technical, and subject matter expert (SME) support services to the Department of the Navy and other branches of the Department of Defense. Their portfolio includes complex systems engineering, integration, testing, and lifecycle support for major naval platforms and programs. Analyzing their past performance on similar Cost Plus Fixed Fee (CPFF) contracts would reveal their ability to manage costs, meet technical requirements, and deliver within schedule. Publicly available contract databases and agency performance reviews often provide insights into contractor performance trends, including any past issues related to cost overruns, schedule delays, or technical deficiencies. Given their status as a major defense contractor, their track record is generally characterized by significant program involvement, though like any large entity, specific contract performance can vary.

How does the $7.6 million contract value compare to similar engineering support contracts awarded by the Department of the Navy?

The $7.6 million total contract value, spanning from August 2018 to March 2026 (approximately 7.6 years), suggests an average annual value of roughly $1 million. This figure needs to be contextualized within the specific type of engineering and SME support required. Contracts for highly specialized, niche expertise or those supporting critical, complex systems (like advanced naval platforms or weapon systems) can command higher values. Conversely, more general engineering services might be procured at lower rates. Benchmarking against other Department of the Navy contracts for 'Engineering Services' (NAICS code 541330) awarded around the same period, with similar durations and competition levels, would provide a clearer picture. Without specific comparable data points, it's difficult to definitively state if $7.6 million represents a high, low, or average investment for this type of long-term support.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract structure?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract structure is the potential for cost overruns. In a CPFF arrangement, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fixed fee provides the government with some cost certainty regarding profit, it can incentivize the contractor to incur higher costs, as their fee remains constant regardless of the total cost. This necessitates robust government oversight to ensure that all costs claimed are reasonable, allocable, and allowable according to the contract terms. Without diligent monitoring and control, the total contract cost could exceed initial estimates, diminishing the overall value for the taxpayer. The government must actively manage the scope and ensure efficient performance to mitigate these risks.

What is the expected program effectiveness or outcome of these engineering and SME support services?

The expected program effectiveness hinges on the successful application of specialized engineering knowledge and subject matter expertise to support the Department of the Navy's objectives. This could encompass a range of outcomes, such as the design, development, or sustainment of naval systems; providing critical technical advice for decision-making; enhancing operational capabilities; or ensuring compliance with technical standards and regulations. The long duration of the contract suggests a need for sustained support that contributes to the ongoing success and modernization of naval programs. Ultimately, the effectiveness will be measured by the contractor's ability to deliver high-quality technical solutions, timely advice, and reliable support that directly contributes to the Navy's mission readiness and technological superiority.

How does this contract fit into the broader historical spending patterns for engineering services within the Department of the Navy?

This $7.6 million contract represents a component of the Department of the Navy's consistent and substantial investment in engineering and technical support services, which historically forms a significant portion of its overall procurement budget. The Navy, like other major defense agencies, relies heavily on external expertise for complex engineering challenges related to shipbuilding, weapons systems, C4ISR, and platform modernization. Spending in this category often fluctuates based on major acquisition programs, modernization initiatives, and sustainment requirements. A contract of this size and duration is typical for providing specialized, long-term support rather than representing a massive surge or deviation from historical spending trends. Analyzing historical data would show a continuous demand for such services, with individual contract values varying based on scope, complexity, and competition.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0017817R3054

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

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, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $10,194,567

Exercised Options: $10,071,067

Current Obligation: $7,664,776

Actual Outlays: $228,952

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4079

IDV Type: IDC

Timeline