Lockheed Martin awarded $16.7M for engineering services, with a significant portion for aircraft equipment

Contract Overview

Contract Amount: $16,777,041 ($16.8M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2003-09-29

End Date: 2009-09-30

Contract Duration: 2,193 days

Daily Burn Rate: $7.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200312!000250!5700!GE35 !OO-ALC/PKC/LCK !F0460698D0002 !A!N! !N!QPC2 !20030929!20060201!002232973!002232973!834951691!N!LOCKHEED MARTIN CORPORATION !1801 STATE RT 17C !OWEGO !NY!13827!55882!107!36!OWEGO !TIOGA !NEW YORK !+000010461385!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A1C!OTHER AIRCRAFT EQUIPMENT !3AAK!A-10 !541710!E! !5!B!S! ! ! !99990909!B! ! !A! !A!N!R!2!002!B! !A!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: OWEGO, TIOGA County, NEW YORK, 13827

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $16.8 million to LOCKHEED MARTIN CORPORATION for work described as: 200312!000250!5700!GE35 !OO-ALC/PKC/LCK !F0460698D0002 !A!N! !N!QPC2 !20030929!20060201!002232973!002232973!834951691!N!LOCKHEED MARTIN CORPORATION !1801 STATE RT 17C !OWEGO !NY!13827!55882!107!36!OWEGO !TIOGA… Key points: 1. Contract value of $16.7M for engineering services, primarily supporting aircraft equipment. 2. Full and open competition indicates a competitive bidding process. 3. Contract duration of over 6 years suggests a long-term need for these services. 4. The primary service category is Engineering Services, with a secondary focus on Other Aircraft Equipment. 5. The contract was awarded by the Department of Defense, managed by the Defense Contract Management Agency. 6. The contractor, Lockheed Martin Corporation, is a major defense industry player.

Value Assessment

Rating: good

The contract value of $16.7 million for engineering services appears reasonable given the 6-year duration and the nature of defense contracting. Benchmarking against similar large-scale engineering support contracts for complex aircraft systems would provide a more precise value-for-money assessment. The Cost Plus Award Fee (CPAF) pricing structure allows for flexibility but requires careful monitoring of performance to ensure optimal value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple qualified bidders had the opportunity to submit proposals. This level of competition is generally favorable for price discovery and can lead to better pricing for the government. The presence of two bids indicates a moderate level of competition for this specific award.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down costs and encourage innovation.

Public Impact

The Department of Defense benefits from specialized engineering services to maintain and potentially upgrade aircraft systems. Services delivered likely include design, analysis, testing, and technical support for aircraft equipment. The geographic impact is primarily centered in New York, where Lockheed Martin's Owego facility is located. Workforce implications include employment for engineers, technicians, and support staff at Lockheed Martin.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Award Fee contracts if performance targets are not met efficiently.
Long contract duration could lead to scope creep or evolving requirements that may not be fully captured in initial pricing.
Reliance on a single large contractor for critical engineering services could pose a risk if performance falters.

Positive Signals

Awarded under full and open competition, suggesting a robust selection process.
Contractor has a long-standing relationship with the government, implying experience and reliability.
The contract supports critical defense systems, indicating a high level of technical expertise is being leveraged.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on engineering services for aircraft. The market for such specialized services is dominated by large, established defense contractors like Lockheed Martin. Spending in this area is driven by the need for continuous support, modernization, and sustainment of complex military platforms. Comparable spending benchmarks would typically involve multi-year contracts for system integration, maintenance, and upgrade services for major defense assets.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss' being false. There is no explicit information regarding subcontracting plans for small businesses within the provided data. The focus on a large prime contractor suggests that any small business involvement would likely be through subcontracting opportunities managed by Lockheed Martin.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are built into the Cost Plus Award Fee structure, which incentivizes meeting performance objectives. Transparency is generally maintained through contract reporting mechanisms, though specific details of performance reviews are often internal.

Related Government Programs

Aircraft Maintenance and Repair
Aerospace Engineering Services
Defense Logistics Support
Military Aircraft Modernization
Systems Engineering

Risk Flags

Cost Plus Award Fee (CPAF) structure requires careful monitoring to ensure cost efficiency.
Long contract duration may introduce risks related to scope creep and evolving requirements.
Potential for contractor performance issues impacting critical defense systems.
Reliance on a single large contractor for specialized services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.8 million to LOCKHEED MARTIN CORPORATION. 200312!000250!5700!GE35 !OO-ALC/PKC/LCK !F0460698D0002 !A!N! !N!QPC2 !20030929!20060201!002232973!002232973!834951691!N!LOCKHEED MARTIN CORPORATION !1801 STATE RT 17C !OWEGO !NY!13827!55882!107!36!OWEGO !TIOGA !NEW YORK !+000010461385!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A1C!OTHER AIRCRAFT EQUIPMENT !3AAK!A-10 !541710!E! !5!B!S! ! ! !99990909!B

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 $16.8 million.

What is the period of performance?

Start: 2003-09-29. End: 2009-09-30.

What is Lockheed Martin's track record with similar engineering services contracts for the Department of Defense?

Lockheed Martin Corporation is a major defense contractor with extensive experience in providing engineering, logistics, and technical support services across numerous platforms for the Department of Defense. They have a long history of managing large, complex contracts, including those involving aircraft systems. While specific performance metrics for past contracts are not detailed here, their continued success in securing significant awards suggests a generally positive track record. However, like any large contractor, they may have faced scrutiny or performance issues on specific projects, which would typically be documented in contract performance reports and agency oversight records.

How does the $16.7 million contract value compare to other engineering services contracts for similar aircraft?

The $16.7 million contract value for engineering services over approximately six years is within a typical range for specialized support of military aircraft. However, without knowing the specific aircraft type, the complexity of the engineering tasks, and the scope of services (e.g., sustainment, upgrades, new development), a direct comparison is challenging. Larger, more complex platforms or contracts involving significant research and development would command higher values. Conversely, routine maintenance or basic technical support contracts might be lower. This contract's value suggests a substantial, ongoing engineering effort rather than a minor support task.

What are the primary risks associated with this Cost Plus Award Fee (CPAF) contract?

The primary risks associated with this CPAF contract revolve around cost control and performance management. For the government, the risk is that costs could escalate beyond initial projections if performance targets are not met efficiently, leading to higher-than-expected expenditures. There's also a risk that the 'award fee' component might be paid out even if performance is only marginally satisfactory, depending on the fee structure. For the contractor, the risk lies in not achieving the performance objectives required to earn the maximum award fee, potentially impacting profitability. Effective oversight and clear performance metrics are crucial to mitigate these risks.

How effective is the 'full and open competition' approach in ensuring value for this type of defense engineering service?

The 'full and open competition' approach is generally considered highly effective in ensuring value for defense engineering services. It allows a broad range of qualified contractors to bid, fostering a competitive environment that typically drives down prices and encourages innovation. For the government, this means a wider pool of potential solutions and better leverage in negotiations. The presence of two bidders in this specific case indicates a moderate level of competition, which is still beneficial. The effectiveness is further enhanced when evaluation criteria are clearly defined and rigorously applied to select the best overall value, not just the lowest price.

What is the historical spending trend for engineering services related to 'Other Aircraft Equipment' by the Department of Defense?

Historical spending trends for engineering services related to 'Other Aircraft Equipment' by the Department of Defense are substantial and generally increasing, driven by the need to maintain and modernize aging fleets and develop new capabilities. While this specific contract represents a portion of that spending, the overall DoD budget allocated to aerospace engineering and sustainment is in the billions annually. Factors influencing these trends include geopolitical conditions, technological advancements, and specific platform lifecycle needs. Analyzing broader contract data for the 'Other Aircraft Equipment' PSC code and related NAICS codes would reveal more detailed historical spending patterns and growth rates.

What are the implications of this contract being awarded to Lockheed Martin for the broader defense industrial base?

Awarding this contract to Lockheed Martin, a major defense prime contractor, has several implications for the broader defense industrial base. It reinforces Lockheed Martin's position in the aerospace and defense sector, potentially enabling them to invest further in research, development, and skilled workforce. It also signifies continued reliance on large, established companies for complex defense systems. This can create opportunities for smaller businesses within Lockheed Martin's supply chain, but it also raises questions about market concentration and the ability of smaller, innovative firms to compete for prime contracts. The contract's duration suggests a stable, long-term revenue stream for the company.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 1801 STATE RT 17 C, OWEGO, NY, 13827

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: F0460698D0002

IDV Type: IDC

Timeline