DoD's $15.1M Engineering Services Contract Awarded to Lockheed Martin Corporation

Contract Overview

Contract Amount: $15,185,494 ($15.2M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2008-03-14

End Date: 2008-12-31

Contract Duration: 292 days

Daily Burn Rate: $52.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Defense

Official Description: M6/M6+ PHASE II

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76108

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $15.2 million to LOCKHEED MARTIN CORPORATION for work described as: M6/M6+ PHASE II Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Significant duration of 292 days for a single delivery order. 3. Engineering services are critical for complex defense systems. 4. Contractor has a substantial presence in the defense sector. 5. Geographic location of performance is Texas. 6. No small business set-aside was applied to this award.

Value Assessment

Rating: fair

The contract value of $15.1 million for engineering services appears to be within a reasonable range for a large defense contractor like Lockheed Martin, especially considering the specialized nature of defense engineering. However, without specific details on the scope of work and deliverables, a precise value-for-money assessment is challenging. The 'NOT COMPETED' status suggests potential for higher costs than a competitive process might yield. Benchmarking against similar sole-source engineering contracts within the DoD would be necessary for a more robust evaluation.

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. This approach is typically used when only one vendor possesses the necessary capabilities, security clearances, or proprietary knowledge. The lack of competition means that taxpayers did not benefit from the price discovery and potential cost savings that a competitive bidding process could have provided. The rationale for the sole-source award would need to be thoroughly documented by the agency.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as there is no competitive pressure to drive down costs. This limits the government's ability to secure the best possible value.

Public Impact

The Department of Defense benefits from specialized engineering services for its complex systems. This contract supports the development and maintenance of critical defense capabilities. Work is performed in Texas, potentially impacting the local economy and workforce. The services provided are essential for national security objectives.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs.
Sole-source awards can reduce transparency in pricing.
Limited visibility into the specific technical requirements and justification for sole-sourcing.

Positive Signals

Award to a major defense contractor suggests access to specialized expertise.
Engineering services are crucial for maintaining technological superiority in defense.

Sector Analysis

The defense sector is characterized by high-value, complex contracts often awarded to a few large prime contractors. Engineering services are a fundamental component of this sector, encompassing design, development, testing, and sustainment of advanced military platforms and systems. Spending in this area is driven by national security needs and technological advancements. Comparable spending benchmarks would typically involve other large-scale engineering support contracts for major defense programs.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the sole-source nature and the prime contractor being Lockheed Martin Corporation, it is unlikely that significant subcontracting opportunities for small businesses were mandated or actively pursued through this specific award. Further analysis would be needed to determine if any subcontracting plans were part of the sole-source justification or if small businesses were involved in prior phases of the program.

Oversight & Accountability

Oversight for this contract would fall under the Department of Defense's established procurement regulations and contract management processes. The specific oversight mechanisms would depend on the contracting office and the nature of the engineering services. Transparency is limited due to the sole-source award, and accountability would be managed through contract performance monitoring and reporting. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Research and Development
Defense Engineering Support Services
Lockheed Martin Corporation Contracts

Risk Flags

Sole-source award lacks competitive pricing pressure.
Time and Materials pricing type can lead to cost uncertainty.
Limited public information on specific deliverables and justification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.2 million to LOCKHEED MARTIN CORPORATION. M6/M6+ PHASE II

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 $15.2 million.

What is the period of performance?

Start: 2008-03-14. End: 2008-12-31.

What was the specific justification for awarding this contract on a sole-source basis to Lockheed Martin Corporation?

The provided data indicates the contract was 'NOT COMPETED,' signifying a sole-source award. The specific justification for this sole-source determination is not detailed in the provided data. Typically, sole-source justifications are based on factors such as unique capabilities, proprietary technology, urgent and compelling needs, or the unavailability of other sources. For a contract of this magnitude ($15.1M) awarded to a major defense contractor like Lockheed Martin, the justification would likely stem from specialized expertise or proprietary systems integral to the Department of the Air Force's mission requirements. A thorough review of the contract file and associated documentation would be necessary to ascertain the precise rationale behind the sole-source decision.

How does the $15.1 million contract value compare to similar engineering services contracts within the Department of Defense?

Benchmarking the $15.1 million contract value for engineering services requires comparing it to similar contracts awarded by the Department of Defense (DoD) for comparable services. Given that this is a sole-source award to Lockheed Martin Corporation, direct comparisons to competitively bid contracts may not be entirely apples-to-apples. However, engineering services for major defense programs can range from millions to billions of dollars. A contract of $15.1 million for a specific phase or set of services is substantial but not exceptionally large within the context of the DoD's overall spending. To provide a more precise comparison, one would need to analyze contracts with similar North American Industry Classification System (NAICS) codes (like 541330 for Engineering Services), similar scope of work, and awarded to contractors of similar size and capability, ideally within the same branch of service (Air Force).

What are the potential risks associated with awarding a contract of this size on a sole-source basis?

The primary risk associated with awarding a contract of this size ($15.1M) on a sole-source basis is the potential for reduced value for money. Without competition, there is less incentive for the contractor to offer the lowest possible price, potentially leading to higher costs for the government and taxpayers. Other risks include a lack of innovation that might arise from a competitive environment, and a reduced ability to scrutinize pricing and performance against market alternatives. Furthermore, sole-source awards can sometimes raise concerns about fairness and equal opportunity for other capable contractors. The agency must have robust internal controls and justification processes to mitigate these risks.

What is the track record of Lockheed Martin Corporation in delivering engineering services for the Department of Defense?

Lockheed Martin Corporation is a major defense contractor with an extensive track record of delivering a wide array of engineering services to the Department of Defense (DoD) across numerous programs and platforms. They are involved in the design, development, integration, testing, and sustainment of complex military systems, including aircraft, missiles, satellites, and command and control systems. Their performance history with the DoD is generally characterized by large-scale, high-technology projects. While specific performance metrics for individual contracts vary, Lockheed Martin is a well-established entity within the defense industrial base, consistently securing significant government contracts due to its capabilities and existing relationships.

How does the contract's 'TIME AND MATERIALS' pricing type potentially impact cost control?

The 'TIME AND MATERIALS' (T&M) pricing type for this $15.1 million contract presents inherent cost control challenges. Under T&M, the government pays the contractor for the actual labor hours expended at agreed-upon hourly rates, plus the cost of materials used. This structure shifts much of the cost risk to the government, as the final contract price is not fixed and can fluctuate based on the actual effort required. Effective cost control with T&M contracts relies heavily on robust government oversight, including detailed monitoring of labor hours, verification of material costs, and ensuring that the effort is efficient and necessary. Without strong oversight, T&M contracts can lead to cost overruns compared to fixed-price arrangements.

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: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

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: $30,638,621

Exercised Options: $30,638,621

Current Obligation: $15,185,494

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: F4262001D0058

IDV Type: IDC

Timeline