DoD awards $18.4M for SUITE 5 OFP to Lockheed Martin, citing sole-source justification
Contract Overview
Contract Amount: $18,366,287 ($18.4M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2007-09-17
End Date: 2009-11-30
Contract Duration: 805 days
Daily Burn Rate: $22.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: TIME AND MATERIALS
Sector: Defense
Official Description: SUITE 5 OPERATIONAL FLIGHT PROGRAM (OFP)
Place of Performance
Location: OWEGO, TIOGA County, NEW YORK, 13827
State: New York Government Spending
Plain-Language Summary
Department of Defense obligated $18.4 million to LOCKHEED MARTIN CORPORATION for work described as: SUITE 5 OPERATIONAL FLIGHT PROGRAM (OFP) Key points: 1. High contract value for specialized engineering services. 2. Sole-source award to incumbent Lockheed Martin raises competition concerns. 3. Potential for cost overruns due to Time and Materials pricing. 4. Engineering services sector often involves complex, long-term projects.
Value Assessment
Rating: questionable
The $18.4M award for SUITE 5 OFP is a significant sum. Benchmarking is difficult without detailed scope, but the sole-source nature and T&M pricing suggest potential for higher-than-expected costs compared to competitive, fixed-price contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, awarded sole-source to Lockheed Martin. This limits price discovery and potentially leads to higher costs for taxpayers as there was no competitive pressure to drive down prices.
Taxpayer Impact: The lack of competition for this substantial contract likely results in a higher cost to taxpayers than if it had been competitively bid.
Public Impact
Taxpayers may be paying a premium due to the sole-source award. Lack of transparency in the procurement process could mask inefficiencies. Dependence on a single contractor for critical operational flight programs. Limited opportunities for other qualified firms to participate.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Time and Materials pricing
- Lack of competition
- High contract value
Positive Signals
- Awarded to incumbent contractor with likely relevant expertise
Sector Analysis
This contract falls under Engineering Services (NAICS 541330), a sector characterized by specialized technical expertise. Spending in this area is often driven by defense and aerospace needs, with significant investments in R&D and program management.
Small Business Impact
The sole-source nature of this award, particularly to a large prime contractor like Lockheed Martin, offers no direct benefit or opportunity for small businesses. Subcontracting opportunities are not specified but are unlikely to be prioritized in a sole-source scenario.
Oversight & Accountability
The sole-source justification requires rigorous review to ensure it was truly necessary and that fair and reasonable pricing was achieved. Oversight should focus on monitoring expenditures under the Time and Materials contract to prevent cost creep.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition
- Sole-source justification questionable
- Time and Materials pricing risk
- Potential for cost overruns
- Limited small business participation
- Lack of transparency in procurement
Tags
engineering-services, department-of-defense, ny, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $18.4 million to LOCKHEED MARTIN CORPORATION. SUITE 5 OPERATIONAL FLIGHT PROGRAM (OFP)
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 $18.4 million.
What is the period of performance?
Start: 2007-09-17. End: 2009-11-30.
What specific technical or programmatic reasons necessitated a sole-source award for the SUITE 5 OFP, and were these thoroughly documented and justified?
Sole-source awards are typically justified by unique capabilities, critical program needs, or lack of viable alternatives. For the SUITE 5 OFP, the justification likely centered on Lockheed Martin's proprietary knowledge, existing infrastructure, or specific integration requirements for the operational flight program. A thorough review would examine the documented rationale against established procurement regulations to ensure no reasonable alternatives were overlooked.
How does the Time and Materials pricing structure impact cost control and potential overruns for this $18.4M contract?
Time and Materials (T&M) contracts carry inherent risks of cost overruns as they reimburse the contractor for direct labor hours and materials used, plus a fee. Without strong oversight and defined ceilings, this structure can incentivize longer project durations and higher material costs. Effective cost control requires diligent monitoring of labor hours, material invoices, and task completion rates by the government.
What is the long-term strategic implication of awarding critical operational flight programs on a sole-source basis to a single contractor?
Sole-source awards for critical programs can lead to contractor lock-in, reduced innovation, and potentially higher long-term costs due to the absence of competitive pressure. It also limits the government's flexibility to adapt to new technologies or alternative solutions. Over time, this can diminish the government's bargaining power and create strategic dependencies.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: TIME AND MATERIALS (Y)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: 1801 STATE ROUTE 17C, OWEGO, NY, 23
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $18,366,287
Exercised Options: $18,366,287
Current Obligation: $18,366,287
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA820206D0001
IDV Type: IDC
Timeline
Start Date: 2007-09-17
Current End Date: 2009-11-30
Potential End Date: 2009-11-30 00:00:00
Last Modified: 2014-01-28
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