DoD's $70.9M Lockheed Martin ICLS Contract Lacks Competition, Raises Value Concerns
Contract Overview
Contract Amount: $70,898,286 ($70.9M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2023-05-31
End Date: 2026-05-31
Contract Duration: 1,096 days
Daily Burn Rate: $64.7K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Official Description: INTERNATIONAL CONTRACTOR LOGISTICS SUPPORT (ICLS) FOR INTERNATIONAL CUSTOMER WITH VARYING DEGREES OF SERVICES TO INCLUDE REPAIR AND RETURN, FIELD SERVICE REPRESENTATIVE SUPPORT/TRAVEL, PROGRAM MANAGEMENT SUPPORT/TRAVEL
Place of Performance
Location: GRAND PRAIRIE, DALLAS County, TEXAS, 75051
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $70.9 million to LOCKHEED MARTIN CORPORATION for work described as: INTERNATIONAL CONTRACTOR LOGISTICS SUPPORT (ICLS) FOR INTERNATIONAL CUSTOMER WITH VARYING DEGREES OF SERVICES TO INCLUDE REPAIR AND RETURN, FIELD SERVICE REPRESENTATIVE SUPPORT/TRAVEL, PROGRAM MANAGEMENT SUPPORT/TRAVEL Key points: 1. Significant contract value of $70.9 million for international contractor logistics support. 2. Sole-source award to Lockheed Martin Corporation, indicating a lack of competitive bidding. 3. Potential for inflated costs due to limited competition and a Cost Plus Fixed Fee structure. 4. Services include repair, return, field support, and program management, vital for international operations.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee (CPFF) contract type, combined with a sole-source award, raises concerns about cost control and potential overpricing. Benchmarking against similar logistics support contracts is difficult without competitive data.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, suggesting a sole-source award. The lack of competition limits price discovery and may lead to less favorable terms for the government.
Taxpayer Impact: The absence of competition could result in taxpayers paying more than necessary for these critical logistics services.
Public Impact
Ensures continued operational readiness for international customers by providing essential logistics support. Supports U.S. foreign policy objectives through reliable contractor assistance abroad. Potential for cost overruns impacts overall defense budget allocation.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost Plus Fixed Fee contract type
- Potential for cost overruns
Positive Signals
- Provides critical support for international operations
- Long-term contract duration ensures stability
Sector Analysis
This contract falls under professional, scientific, and technical services, specifically logistics consulting. The $70.9 million value is substantial for this sector, especially for a sole-source award.
Small Business Impact
The contract was awarded to Lockheed Martin Corporation, a large business. There is no indication of small business participation in this sole-source award.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and effective service delivery. Regular performance reviews and cost audits are crucial.
Related Government Programs
- Process, Physical Distribution, and Logistics Consulting Services
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award limits competition.
- Cost Plus Fixed Fee structure can incentivize higher costs.
- Lack of transparency in pricing due to no competitive bidding.
- Potential for cost overruns impacting taxpayer funds.
Tags
process-physical-distribution-and-logist, department-of-defense, tx, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $70.9 million to LOCKHEED MARTIN CORPORATION. INTERNATIONAL CONTRACTOR LOGISTICS SUPPORT (ICLS) FOR INTERNATIONAL CUSTOMER WITH VARYING DEGREES OF SERVICES TO INCLUDE REPAIR AND RETURN, FIELD SERVICE REPRESENTATIVE SUPPORT/TRAVEL, PROGRAM MANAGEMENT SUPPORT/TRAVEL
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 Army).
What is the total obligated amount?
The obligated amount is $70.9 million.
What is the period of performance?
Start: 2023-05-31. End: 2026-05-31.
What is the justification for awarding this contract on a sole-source basis, and what steps are being taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities or urgent needs. Without competitive bidding, the Department of Defense must rigorously validate Lockheed Martin's proposed costs, ensuring they align with industry standards and are not inflated due to the lack of market pressure. This requires detailed cost analysis and potentially negotiation to achieve fair pricing.
How is the effectiveness of the contractor's logistics support being measured, especially given the CPFF structure which incentivizes spending?
Effectiveness is likely measured through performance metrics outlined in the contract, such as response times, repair turnaround times, and customer satisfaction. For a CPFF contract, rigorous oversight is essential to monitor expenditures and ensure they are reasonable and allocable to the contract's objectives, preventing the contractor from simply increasing costs to maximize profit.
What is the long-term strategy for ensuring competitive sourcing for future logistics support needs, to avoid recurring sole-source awards?
The long-term strategy should involve market research to identify potential competitors and develop requirements that can be met through competitive solicitations. Breaking down large requirements into smaller, more accessible contracts could also encourage broader participation. Proactive planning and early engagement with industry are key to fostering competition.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Process, Physical Distribution, and Logistics Consulting Services
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W31P4Q23R0022
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp
Address: 1701 W MARSHALL DR, GRAND PRAIRIE, TX, 75051
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: $70,898,287
Exercised Options: $70,898,286
Current Obligation: $70,898,286
Subaward Activity
Number of Subawards: 45
Total Subaward Amount: $5,314,330
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2023-05-31
Current End Date: 2026-05-31
Potential End Date: 2026-05-31 12:05:00
Last Modified: 2026-01-12
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