DoD awards $25M engineering services task order to Lockheed Martin for Sentinel A4 program
Contract Overview
Contract Amount: $25,018,406 ($25.0M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2025-06-03
End Date: 2026-06-02
Contract Duration: 364 days
Daily Burn Rate: $68.7K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: SENTINEL A4 ENGINEERING SERVICES TASK ORDER 04.
Place of Performance
Location: LIVERPOOL, ONONDAGA County, NEW YORK, 13088
State: New York Government Spending
Plain-Language Summary
Department of Defense obligated $25.0 million to LOCKHEED MARTIN CORPORATION for work described as: SENTINEL A4 ENGINEERING SERVICES TASK ORDER 04. Key points: 1. Contract value represents a significant investment in critical defense engineering capabilities. 2. The full and open competition suggests a robust market for these specialized services. 3. Potential risks include cost overruns inherent in Cost Plus Fixed Fee contracts. 4. Performance will be assessed against the needs of the Sentinel A4 program, a key defense initiative. 5. This contract positions Lockheed Martin as a key provider within the defense engineering sector.
Value Assessment
Rating: good
The $25 million award for engineering services appears reasonable given the scope and duration of the task order, which supports the Sentinel A4 program. Benchmarking against similar large-scale defense engineering contracts, this value falls within expected ranges for specialized technical support. The Cost Plus Fixed Fee (CPFF) pricing structure, while offering flexibility, necessitates close monitoring to ensure value for money and prevent cost creep.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This task order was awarded under full and open competition, indicating that multiple qualified contractors had the opportunity to bid. The specific number of bidders is not provided, but the competitive nature of the award process is a positive sign for price discovery and ensuring the government receives competitive offers for these engineering services.
Taxpayer Impact: A full and open competition process generally leads to better pricing for taxpayers by fostering a competitive environment among potential contractors.
Public Impact
The primary beneficiaries are the Department of Defense and the Army, receiving critical engineering support for the Sentinel A4 program. Services delivered include specialized engineering expertise essential for the development and sustainment of advanced defense systems. The contract's geographic impact is centered in New York, where the contractor is located. Workforce implications include the potential for skilled engineering jobs to be supported or created by this contract.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contracts can lead to higher final costs if not managed diligently.
- Reliance on a single large contractor for critical engineering tasks may present supply chain risks.
- The specialized nature of the work could limit the pool of qualified personnel, potentially impacting schedule.
- Long-term sustainment costs for the Sentinel A4 program are not fully detailed in this award.
Positive Signals
- Awarded through full and open competition, suggesting a competitive pricing environment.
- Lockheed Martin is a well-established defense contractor with a proven track record.
- The contract supports a critical defense program, aligning with national security objectives.
- The task order has a defined period of performance, allowing for periodic reassessment of needs.
- Engineering services are crucial for maintaining technological superiority in defense.
Sector Analysis
The defense engineering services sector is characterized by high barriers to entry, significant R&D investment, and long-term government contracts. This contract fits within the broader landscape of defense procurement, where specialized engineering expertise is essential for developing and maintaining complex weapon systems. Comparable spending benchmarks in this sector often involve multi-year, multi-billion dollar programs, making this $25 million task order a significant but focused investment.
Small Business Impact
The data indicates this contract was awarded under full and open competition and does not specify any small business set-aside. While Lockheed Martin is a large business, there may be opportunities for small businesses to participate as subcontractors. Further analysis would be needed to determine the extent of small business subcontracting planned for this task order and its impact on the small business ecosystem.
Oversight & Accountability
Oversight for this contract will likely be managed by the Department of the Army contracting and program management offices. Accountability measures will be tied to the performance metrics outlined in the task order and the Cost Plus Fixed Fee structure, requiring diligent financial and progress reporting. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive.
Related Government Programs
- Sentinel A4 Program
- Department of the Army Procurement
- Defense Engineering Services Contracts
- Lockheed Martin Defense Contracts
Risk Flags
- Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
- Potential for cost overruns inherent in CPFF contracts.
- Reliance on a single large contractor for critical services.
Tags
defense, department-of-defense, department-of-the-army, engineering-services, lockheed-martin-corporation, cost-plus-fixed-fee, full-and-open-competition, sentinel-a4, new-york, delivery-order, large-business
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $25.0 million to LOCKHEED MARTIN CORPORATION. SENTINEL A4 ENGINEERING SERVICES TASK ORDER 04.
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 $25.0 million.
What is the period of performance?
Start: 2025-06-03. End: 2026-06-02.
What is Lockheed Martin's track record with similar engineering services contracts for the Department of Defense?
Lockheed Martin Corporation is a major defense contractor with extensive experience providing engineering services across numerous platforms and programs for the Department of Defense. They have a long history of supporting complex weapon systems, including missile defense, aviation, and space systems. Their track record typically involves large-scale, multi-year contracts requiring advanced technical expertise, program management, and integration capabilities. While specific performance metrics for past contracts are often proprietary or detailed in separate reports, Lockheed Martin is generally considered a reliable provider of such services, though like any large contractor, they have faced scrutiny on specific program costs and schedules in the past. This contract's success will likely depend on effective program management and adherence to the specific requirements of the Sentinel A4 program.
How does the $25 million value compare to other engineering services contracts for similar defense programs?
The $25 million value for this task order is a substantial amount for a single engineering services contract, reflecting the complexity and critical nature of the Sentinel A4 program. When compared to the broader defense sector, this figure is moderate; major defense programs often involve hundreds of millions or even billions of dollars in engineering support over their lifecycle. However, for a specific task order with a 364-day duration, $25 million indicates a significant allocation of resources. Benchmarking against other Army or DoD engineering services contracts for advanced systems development or sustainment, this award appears to be within a typical range for specialized, high-demand technical support, especially when considering the specialized nature of the Sentinel A4's mission.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude?
The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude revolve around cost control and contractor incentive. For the government, the risk is that the 'cost' portion could escalate beyond initial projections, leading to a higher total price than anticipated, even with a fixed fee. While the fee is fixed, the contractor has less incentive to control costs aggressively compared to fixed-price contracts, as their profit margin is based on a percentage of the allowable costs. This necessitates robust government oversight, detailed cost tracking, and clear definition of allowable costs to prevent overruns. For Lockheed Martin, the risk lies in accurately estimating all costs and ensuring the fixed fee adequately compensates them for the work and associated risks, especially if unforeseen technical challenges arise.
How effective is full and open competition in ensuring value for money for specialized defense engineering services?
Full and open competition is generally considered the most effective method for ensuring value for money, even for specialized defense engineering services. By allowing all responsible sources to submit bids, it creates a competitive environment that drives down prices and encourages innovation. For specialized services, the challenge lies in ensuring that the pool of bidders possesses the requisite technical expertise and capacity. While a broader competition might yield more bids, the government must carefully define evaluation criteria to select the offer that represents the best value, considering both technical merit and price. In this case, the fact that the contract was awarded under full and open competition suggests that the Army believes sufficient competition exists in the market for Sentinel A4 engineering services, which should translate to better value.
What are the historical spending patterns for engineering services related to advanced defense systems like the Sentinel A4?
Historical spending patterns for engineering services related to advanced defense systems like the Sentinel A4 typically show a consistent and significant allocation of resources. Programs involving cutting-edge technology, such as missile defense or advanced sensor systems, require substantial investment in research, development, testing, and evaluation (RDT&E), as well as ongoing sustainment engineering. This spending often occurs over many years, with peak investment during the development and initial fielding phases. Contracts are frequently structured as Cost Plus variants (like CPFF) due to the inherent uncertainties in advanced R&D. Annual spending can fluctuate based on program milestones, budget allocations, and evolving threat assessments. The overall trend is one of sustained, high-value investment in specialized engineering expertise to maintain technological superiority.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 497 ELECTRONICS PKWY BLDG 5, LIVERPOOL, NY, 13088
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: $25,018,406
Exercised Options: $25,018,406
Current Obligation: $25,018,406
Actual Outlays: $6,321,922
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W31P4Q22D0024
IDV Type: IDC
Timeline
Start Date: 2025-06-03
Current End Date: 2026-06-02
Potential End Date: 2026-06-02 12:06:00
Last Modified: 2025-09-23
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