DoD's $29M Lockheed Martin contract for engineering services awarded without competition

Contract Overview

Contract Amount: $29,073,531 ($29.1M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2024-09-23

End Date: 2027-08-31

Contract Duration: 1,072 days

Daily Burn Rate: $27.1K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ATI-D REQUIREMENT

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32819

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $29.1 million to LOCKHEED MARTIN CORPORATION for work described as: ATI-D REQUIREMENT Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, which can lead to higher costs if not carefully managed. 2. The sole-source award raises questions about potential missed opportunities for competitive pricing. 3. Performance period of over two years suggests a significant, ongoing need for these engineering services. 4. The contract is managed by the Defense Logistics Agency, indicating a focus on supporting military operations. 5. The lack of small business set-aside suggests this contract is not specifically aimed at fostering small business participation. 6. The geographic location in Florida may indicate a specific operational or logistical hub for these services.

Value Assessment

Rating: questionable

Without a competitive bidding process, it is difficult to benchmark the value for money. The cost-plus-fixed-fee structure requires diligent oversight to ensure costs remain reasonable and do not escalate beyond initial projections. Comparing this to similar engineering services contracts, especially those awarded competitively, would be necessary to assess if the pricing is fair. The absence of a clear per-unit cost makes direct value assessment challenging.

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 potential vendors. This typically occurs when a specific contractor is deemed uniquely qualified or when circumstances prevent a full and open competition. The lack of bidders means there was no opportunity for price discovery through a competitive process, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure to drive down costs. The government did not leverage the benefits of multiple bids to secure the best possible price and value.

Public Impact

The Department of Defense benefits from specialized engineering services crucial for its operations. This contract supports the maintenance and enhancement of defense systems and infrastructure. The primary geographic impact is in Florida, suggesting a concentration of defense activities or support in that state. The contract likely supports a workforce of engineers and technical specialists employed by Lockheed Martin.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs.
Cost-plus-fixed-fee contracts can incentivize cost overruns if not managed tightly.
Lack of transparency in the justification for sole-source award.
No explicit small business subcontracting goals mentioned.

Positive Signals

Award to a major defense contractor with a known track record.
Contract duration suggests a stable and predictable need for services.
Managed by a key defense logistics agency, indicating alignment with strategic priorities.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader aerospace and defense industry. The market for defense engineering services is substantial, with significant government spending allocated annually. This specific contract likely supports specialized technical expertise required for complex defense systems, fitting within the large ecosystem of contractors supporting the Department of Defense. Comparable spending benchmarks would typically be found within DLA's historical procurement data for similar engineering support.

Small Business Impact

The contract does not appear to have a small business set-aside, nor is there an indication of mandatory subcontracting goals for small businesses. This suggests that the primary contractor, Lockheed Martin, will likely handle the majority of the work internally. Consequently, the direct impact on the small business ecosystem in terms of subcontracting opportunities may be limited for this specific award.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Logistics Agency's contracting officers and potentially the Department of Defense's Inspector General. Accountability measures are inherent in the cost-plus-fixed-fee structure, requiring detailed reporting and justification of costs. Transparency regarding the sole-source justification and performance metrics would be key areas for oversight.

Related Government Programs

Department of Defense Engineering Services
Defense Logistics Agency Contracts
Lockheed Martin Defense Contracts
Sole Source Defense Procurements
Cost Plus Fixed Fee Contracts

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.1 million to LOCKHEED MARTIN CORPORATION. ATI-D REQUIREMENT

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 Logistics Agency).

What is the total obligated amount?

The obligated amount is $29.1 million.

What is the period of performance?

Start: 2024-09-23. End: 2027-08-31.

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

Lockheed Martin Corporation is a major defense contractor with extensive experience providing engineering and technical services to the Department of Defense across numerous programs and platforms. Their track record includes work on aircraft, missile systems, space technology, and command and control systems. Historically, they have secured numerous large-scale contracts, often through competitive processes but also via sole-source awards when deemed necessary by the government. Performance reviews and past contract data from DoD sources like the Federal Procurement Data System (FPDS) would provide specific details on their past performance, including any issues or commendations related to cost control, schedule adherence, and technical execution in similar engineering service contracts.

How does the $29 million value compare to other engineering services contracts awarded by the DoD?

The $29 million value for this engineering services contract is moderate within the context of the Department of Defense's overall budget, which runs into hundreds of billions of dollars annually. However, for specific engineering support requirements, this amount represents a significant investment. To assess its comparability, one would need to examine the scope and duration of similar engineering services contracts awarded by the DoD, particularly those managed by the Defense Logistics Agency or for comparable weapon systems or infrastructure projects. Contracts for specialized R&D, system integration, or sustainment engineering can range from a few million to hundreds of millions of dollars. The 'cost-plus-fixed-fee' structure also influences how the total value is realized over time.

What are the primary risks associated with a sole-source, cost-plus-fixed-fee contract for engineering services?

The primary risks associated with a sole-source, cost-plus-fixed-fee (CPFF) contract for engineering services are twofold. Firstly, the sole-source nature eliminates competitive pressure, which can lead to higher prices than might be achieved through a competitive bidding process. The government does not benefit from the price discovery that competition provides. Secondly, the CPFF structure, while allowing for flexibility in scope, carries the risk of cost escalation. The contractor is reimbursed for allowable costs plus a fixed fee, which can incentivize less stringent cost control if oversight is inadequate. This structure requires robust government oversight to ensure costs are reasonable and allocable, and that the fixed fee remains appropriate for the effort.

What is the justification for awarding this contract to Lockheed Martin without competition?

The provided data indicates the contract was awarded as 'NOT COMPETED,' which is a designation for sole-source procurements. The specific justification for this sole-source award is not detailed in the provided data snippet. Typically, sole-source awards are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required services, there is a compelling urgency, or the services are a continuation of previous work where competition is not feasible or cost-effective. A formal Justification for Other Than Full and Open Competition (JOFOC) would normally be required and publicly available for such awards, detailing the rationale.

What are the historical spending patterns for engineering services by the Defense Logistics Agency?

The Defense Logistics Agency (DLA) procures a wide array of services and supplies to support the U.S. military. Historical spending patterns for engineering services by the DLA would likely show a consistent need for technical expertise across various domains, including logistics systems, equipment maintenance, infrastructure support, and readiness operations. DLA often contracts for services that ensure the operability and efficiency of military supply chains and support systems. Analyzing DLA's historical procurement data, particularly from sources like FPDS, would reveal trends in the types of engineering services sought, the primary contractors involved, contract values, and the prevalence of different contract types (e.g., competitive vs. sole-source, fixed-price vs. cost-reimbursable).

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

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 5600 W SAND LAKE RD, ORLANDO, FL, 32819

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $29,073,531

Exercised Options: $29,073,531

Current Obligation: $29,073,531

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $3,186,935

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: SPRRA224D0020

IDV Type: IDC

Timeline