DoD Awards $27M for Engineering Services to Lockheed Martin, Raising Oversight Concerns
Contract Overview
Contract Amount: $10,717,356 ($10.7M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2004-01-15
End Date: 2009-03-31
Contract Duration: 1,902 days
Daily Burn Rate: $5.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: 200404!000047!5700!GU82 !ASC/YPK !F4262001D0058 !A!N! !N!SC29 ! !20040115!20040518!008016958!008016958!834951691!N!LOCKHEED MARTIN CORPORATION !LOCKHEED BLVD !FORT WORTH !TX!76101!27000!439!48!FORT WORTH !TARRANT !TEXAS !+000001047500!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !541330!E! !5!B!S! ! ! !99990909!B! ! !N!Z!D!U!V!1!001!N!1A!Z!Y!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!N! ! ! !Y! ! !0001! !
Place of Performance
Location: FORT WORTH, TARRANT County, TEXAS, 76108
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $10.7 million to LOCKHEED MARTIN CORPORATION for work described as: 200404!000047!5700!GU82 !ASC/YPK !F4262001D0058 !A!N! !N!SC29 ! !20040115!20040518!008016958!008016958!834951691!N!LOCKHEED MARTIN CORPORATION !LOCKHEED BLVD !FORT WORTH !TX!76101!27000!439!48!FORT WORTH !TARR… Key points: 1. Contract awarded to a single, large defense contractor, limiting competition. 2. Significant contract value of $27 million for engineering services. 3. Potential for cost overruns due to Cost Plus Incentive Fee contract type. 4. Sector is Defense, specifically IT/Electronics, with high spending benchmarks.
Value Assessment
Rating: questionable
The contract value of $27 million for engineering services appears high compared to typical contracts in this category. Without specific benchmarks for similar 'Engineering Services' contracts for 'Electronics and Communication Equipment', a precise comparison is difficult, but the scale warrants scrutiny.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This lack of competition limits price discovery and may lead to higher costs for taxpayers. The 'NOT COMPETED' status is a significant factor.
Taxpayer Impact: The absence of competition in this $27 million award means taxpayers may not have received the best possible price for these engineering services.
Public Impact
Taxpayers may be overpaying due to the lack of competitive bidding. The Department of Defense is relying on a single contractor for critical engineering services. Potential for scope creep and cost escalation given the contract type.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Incentive Fee contract type
- Lack of transparency in pricing
Positive Signals
- Award to a well-established defense contractor
- Contract duration of nearly 5 years
Sector Analysis
This contract falls within the Defense sector, specifically for engineering services related to electronics and communication equipment. Spending in this area is substantial, and competitive bidding is crucial to ensure value for money.
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 in the provided data, suggesting limited small business participation.
Oversight & Accountability
The sole-source nature of this award raises questions about the oversight process. Robust oversight is needed to ensure the contractor is delivering value and managing costs effectively under the Cost Plus Incentive Fee structure.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award lacks competition.
- Cost Plus Incentive Fee structure can lead to cost overruns.
- Potential for lack of transparency in pricing.
- Limited visibility into small business participation.
- High contract value warrants close scrutiny.
Tags
engineering-services, department-of-defense, tx, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $10.7 million to LOCKHEED MARTIN CORPORATION. 200404!000047!5700!GU82 !ASC/YPK !F4262001D0058 !A!N! !N!SC29 ! !20040115!20040518!008016958!008016958!834951691!N!LOCKHEED MARTIN CORPORATION !LOCKHEED BLVD !FORT WORTH !TX!76101!27000!439!48!FORT WORTH !TARRANT !TEXAS !+000001047500!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !541330!E! !5!B!S! ! ! !999
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 Air Force).
What is the total obligated amount?
The obligated amount is $10.7 million.
What is the period of performance?
Start: 2004-01-15. End: 2009-03-31.
What specific engineering services are being provided under this contract, and how do they align with the stated PSC code (541330)?
The contract specifies 'SYSTEMS ENGINEERING SERVICES' and is categorized under PSC 541330, which covers 'Engineering Services'. While the broad categories align, the exact nature of the systems engineering work, particularly concerning 'ELECTRONICS AND COMMUNICATION EQUIP', would require further detail from the contract's statement of work to fully understand its scope and necessity.
What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?
The provided data indicates the contract was 'NOT COMPETED'. A formal justification for this sole-source award should exist within the contracting agency (Department of Defense, Air Force). Without this justification, it's impossible to assess if fair and reasonable pricing was achieved, as competitive market forces were bypassed.
How will the performance and costs of this Cost Plus Incentive Fee contract be monitored to ensure effective delivery and prevent excessive profit?
Effective oversight of a Cost Plus Incentive Fee (CPIF) contract requires rigorous monitoring of both cost and performance metrics. The Air Force must establish clear incentive targets and track Lockheed Martin's progress against them. Regular audits and reviews of incurred costs are essential to ensure the government pays only for necessary and efficient expenditures.
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: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp
Address: 1 LOCKHEED BLVD, FORT WORTH, TX, 76108
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $61,246
Exercised Options: $61,246
Current Obligation: $10,717,356
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: F4262001D0058
IDV Type: IDC
Timeline
Start Date: 2004-01-15
Current End Date: 2009-03-31
Potential End Date: 2009-03-31 00:00:00
Last Modified: 2022-11-16
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