DoD's $29.7M Engineering Services Contract Awarded to Lockheed Martin Corporation
Contract Overview
Contract Amount: $29,687,168 ($29.7M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2013-09-17
End Date: 2018-09-27
Contract Duration: 1,836 days
Daily Burn Rate: $16.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: IGF::CT::IGF DESIGN AGENT ENGINEERING SERVICES
Place of Performance
Location: PORT HUENEME CBC BASE, VENTURA County, CALIFORNIA, 93043
Plain-Language Summary
Department of Defense obligated $29.7 million to LOCKHEED MARTIN CORPORATION for work described as: IGF::CT::IGF DESIGN AGENT ENGINEERING SERVICES Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, indicating potential for cost overruns. 2. Sole-source award limits competitive pressure, potentially impacting price efficiency. 3. Long contract duration of 1836 days suggests a significant, ongoing need for services. 4. The contract falls under Engineering Services, a broad category with varying market dynamics. 5. Awarded by the Department of the Navy, a major defense procurement entity. 6. The contractor, Lockheed Martin Corporation, is a large, established defense prime. 7. No small business set-aside was utilized for this procurement.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging without specific performance metrics or comparable sole-source awards. The cost-plus-fixed-fee structure inherently carries more risk for the government compared to fixed-price contracts, as costs can escalate. However, for complex engineering services where scope may evolve, this structure can be justified. Further analysis would require understanding the specific engineering tasks performed and whether the fixed fee was reasonable for the effort.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. Sole-source awards are typically justified when only one vendor possesses the necessary capabilities, proprietary technology, or when urgency precludes a competitive process. The lack of competition means that the government did not benefit from the price discovery that typically occurs in a competitive bidding environment.
Taxpayer Impact: Taxpayers may have paid a higher price than if the contract had been competed. Without competition, there is less incentive for the contractor to offer the most cost-effective solution.
Public Impact
The Department of the Navy benefits from specialized engineering expertise for its projects. Services delivered likely support naval engineering, design, and technical solutions. The contract's geographic impact is centered in California, where the contractor is located. Workforce implications include employment for engineers and technical staff at Lockheed Martin.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition.
- Cost-plus-fixed-fee structure can lead to cost escalation.
- Long contract duration may mask inefficiencies if not closely managed.
- Lack of transparency on specific engineering deliverables makes value assessment difficult.
Positive Signals
- Award to a large, experienced contractor like Lockheed Martin suggests a high likelihood of technical capability.
- Engineering services are critical for defense modernization and operational readiness.
- The contract supports a significant defense agency, aligning with national security objectives.
Sector Analysis
This contract falls within the Engineering Services sector, a critical component of the broader aerospace and defense industry. This sector is characterized by high technical expertise, significant R&D investment, and long-term program cycles. The market is dominated by large, established firms like Lockheed Martin, though specialized engineering firms also play a role. Spending in this category is often driven by government procurement for complex defense systems and infrastructure.
Small Business Impact
This contract did not include a small business set-aside. Given the sole-source nature and the prime contractor being Lockheed Martin, a large corporation, there is no direct indication of subcontracting opportunities for small businesses within this specific award. The absence of a set-aside means that small businesses did not have a dedicated portion of this procurement to compete for.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and program management office within the Department of the Navy. Accountability measures would be tied to the terms of the Cost Plus Fixed Fee contract, including regular reporting on costs and progress. Transparency is limited due to the sole-source nature and the proprietary aspects of engineering services, but contract actions and payments are generally recorded in federal databases.
Related Government Programs
- Defense Engineering Services
- Naval Ship Systems Engineering
- Aerospace Engineering Support
- Department of Defense Research and Development
Risk Flags
- Sole-source award
- Cost-plus-fixed-fee pricing
- Long contract duration
Tags
defense, department-of-the-navy, engineering-services, lockheed-martin-corporation, sole-source, cost-plus-fixed-fee, definitive-contract, california, large-contract, design-agent
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $29.7 million to LOCKHEED MARTIN CORPORATION. IGF::CT::IGF DESIGN AGENT 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 $29.7 million.
What is the period of performance?
Start: 2013-09-17. End: 2018-09-27.
What specific engineering services were provided under this contract?
The data provided indicates the contract was for 'IGF::CT::IGF DESIGN AGENT ENGINEERING SERVICES'. While the specific nature of 'IGF' is not detailed, it suggests a role in design, agent, or integrated government functions related to engineering. These services could encompass a wide range of activities, including conceptual design, detailed engineering, systems integration, technical analysis, prototyping support, and lifecycle engineering for naval systems or platforms. Without further documentation, the precise scope remains broad, but it clearly falls under specialized engineering support critical for defense programs.
How does the $29.7 million award compare to other engineering services contracts awarded by the Navy?
The $29.7 million award is a substantial sum, indicative of a significant engineering effort. However, to contextualize it, one would need to compare it against the distribution of contract values for engineering services within the Department of the Navy. The Navy procures a vast array of engineering services, ranging from small, specialized studies to multi-billion dollar platform development contracts. This particular award falls into the mid-to-large range for a single definitive contract, especially considering its duration. Benchmarking against similar sole-source, cost-plus-fixed-fee engineering contracts for specialized design agent roles would provide a more precise comparison of its relative scale and potential value.
What are the primary risks associated with a sole-source, cost-plus-fixed-fee contract for engineering services?
The primary risks associated with this contract type are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher prices than could be achieved through a competitive bidding process. The government does not benefit from the price discovery mechanism inherent in open competition. Secondly, the cost-plus-fixed-fee (CPFF) structure means the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This can incentivize cost overruns, as the contractor is guaranteed their fee regardless of cost efficiency, although they are motivated to stay within the overall contract ceiling. Effective oversight and robust cost tracking are crucial to mitigate these risks.
What is the significance of Lockheed Martin Corporation being the contractor for this award?
Lockheed Martin Corporation is one of the largest defense contractors globally, with extensive experience and a deep portfolio in aerospace, defense, and security. Their involvement suggests the engineering services required were complex, mission-critical, and likely integrated with broader defense systems or platforms where Lockheed Martin holds a significant role. Awarding to such a prime contractor often implies a need for specialized knowledge, existing program familiarity, or unique capabilities that only a major player like Lockheed Martin possesses. It also suggests a high level of confidence in their technical proficiency and ability to execute demanding engineering tasks.
How does the contract duration of 1836 days (approximately 5 years) impact the assessment of value?
A contract duration of approximately five years for engineering services suggests a long-term, strategic need for the capabilities being procured. This extended period allows for deeper integration of the contractor's expertise into the program lifecycle, potentially leading to more optimized designs and solutions. However, it also increases the risk of cost escalation over time, especially with a CPFF structure. Effective program management and regular performance reviews are essential to ensure continued value delivery throughout the contract's life. The long duration necessitates careful monitoring to prevent scope creep and ensure alignment with evolving technological and operational requirements.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N6339413R1307
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: 200 LOCKHEED MARTIN BLVD, ORLANDO, FL, 32819
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $38,574,075
Exercised Options: $38,574,075
Current Obligation: $29,687,168
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2013-09-17
Current End Date: 2018-09-27
Potential End Date: 2018-09-27 00:00:00
Last Modified: 2019-09-19
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