DoD Awards $107M Engineering Services Contract to Lockheed Martin, Lasting Over 5 Years
Contract Overview
Contract Amount: $106,955,187 ($107.0M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2004-09-30
End Date: 2009-11-30
Contract Duration: 1,887 days
Daily Burn Rate: $56.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: COST NO FEE
Sector: Defense
Place of Performance
Location: ORLANDO, ORANGE County, FLORIDA, 32825
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $107.0 million to LOCKHEED MARTIN CORPORATION for work described as: Key points: 1. Significant contract value of $107 million awarded to a major defense contractor. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. Contract duration of over 5 years indicates a long-term need for these services. 4. The North American Industry Classification System (NAICS) code 541330 points to engineering services within the defense sector.
Value Assessment
Rating: fair
The contract type is 'COST NO FEE', which can lead to cost overruns if not managed carefully. Benchmarking against similar engineering services contracts is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which generally promotes competitive pricing. However, the 'COST NO FEE' structure might limit the incentive for the contractor to aggressively control costs.
Taxpayer Impact: Taxpayer funds are being used for engineering services. The 'COST NO FEE' structure means the government bears the cost risk, potentially leading to higher overall expenditure than a fixed-price contract.
Public Impact
This contract supports critical defense engineering services, contributing to national security infrastructure. The long-term nature of the contract suggests ongoing requirements for specialized engineering expertise within the Department of Defense. Awarding to Lockheed Martin, a large defense contractor, indicates the scale and complexity of the engineering needs.
Waste & Efficiency Indicators
Waste Risk Score: 56 / 10
Warning Flags
- Cost risk associated with 'COST NO FEE' contract type.
- Potential for cost overruns due to lack of fee incentive for cost control.
- Long contract duration may not adapt well to rapidly changing technological needs.
Positive Signals
- Awarded through full and open competition.
- Supports essential defense engineering services.
- Contractor is a well-established entity in the defense sector.
Sector Analysis
This contract falls within the engineering services sector, specifically supporting defense-related activities. Spending benchmarks for engineering services can vary widely based on complexity and duration, but $107 million over five years represents a substantial investment.
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, which is common for large prime contracts.
Oversight & Accountability
The Department of Defense, through the Defense Contract Management Agency, is responsible for oversight. The 'COST NO FEE' structure necessitates robust oversight to monitor expenditures and ensure contract objectives are met efficiently.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Cost risk due to 'COST NO FEE' contract type.
- Potential for cost overruns.
- Lack of fee incentive for contractor cost efficiency.
- Long contract duration may not be agile enough for evolving needs.
- Limited visibility into specific services procured.
- No explicit mention of small business participation.
Tags
engineering-services, department-of-defense, fl, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $107.0 million to LOCKHEED MARTIN CORPORATION. See the official description on USAspending.
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 $107.0 million.
What is the period of performance?
Start: 2004-09-30. End: 2009-11-30.
What specific engineering services are being procured under this contract, and how do they align with current defense priorities?
The data indicates 'Engineering Services' under NAICS code 541330. Without further details, it's difficult to specify the exact services. However, given the Department of Defense as the agency, these likely encompass areas such as systems engineering, design, development, testing, and integration for military platforms, weapons systems, or related infrastructure. Alignment with current defense priorities would depend on the specific projects undertaken.
What is the rationale behind choosing a 'COST NO FEE' contract type for these engineering services, and what are the associated cost control mechanisms?
A 'COST NO FEE' contract is typically used when the scope of work is uncertain or when the government assumes significant risk. The rationale might be to ensure the contractor is not deterred from performing necessary work due to potential cost overruns, especially in R&D or complex system development. Robust government oversight, detailed cost reporting, and audits are crucial control mechanisms to manage expenditures under this type of contract.
How does the $107 million award compare to typical spending on similar engineering services contracts within the defense sector over a similar timeframe?
The $107 million award over approximately five years averages around $21.4 million annually. This figure is substantial but not necessarily outliers for complex defense engineering projects. Benchmarking requires comparing specific service types, contract complexity, and the specific defense systems involved. Large-scale platform development or modernization programs often involve contracts of this magnitude or larger.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: TRAINING AIDS AND DEVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 4
Pricing Type: COST NO FEE (S)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: 12506 LAKE UNDERHILL ROAD, ORLANDO, FL, 32825
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2004-09-30
Current End Date: 2009-11-30
Potential End Date: 2009-11-30 00:00:00
Last Modified: 2019-04-10
More Contracts from Lockheed Martin Corporation
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Department of Defense)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Department of Defense)
- THE Purpose of This Modification IS to Award F-35A Lrip 15 Usaf Aircraft* Long Lead Funding — $30.1B (Department of Defense)
- THE Purpose of This Contract IS to Award Long Lead Funding for F-35A, F-35B, and F-35C Aircraft for U.S. Services, Non-Dod Partners, and FMS Customers — $24.5B (Department of Defense)
- Lrip 11 AAC — $12.3B (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)