DoD's $15.67M Engineering Services Contract Awarded to Lockheed Martin Corporation Shows Limited Competition

Contract Overview

Contract Amount: $15,667,231 ($15.7M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2019-01-01

End Date: 2026-06-30

Contract Duration: 2,737 days

Daily Burn Rate: $5.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::OT::IGF

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32819

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $15.7 million to LOCKHEED MARTIN CORPORATION for work described as: IGF::OT::IGF Key points: 1. Contract awarded on a firm-fixed-price basis, indicating defined cost expectations. 2. Long performance period of nearly 7.5 years suggests a need for sustained engineering support. 3. The contract was not competed, raising questions about potential cost efficiencies and market alternatives. 4. Geographic location in Florida may indicate specific project needs or contractor presence. 5. The engineering services sector is critical for defense readiness and technological advancement. 6. No small business set-aside was applied, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: questionable

Benchmarking the value of this $15.67 million contract is challenging without specific service details and comparable contract data. However, the lack of competition suggests that the government may not have achieved the most favorable pricing. The firm-fixed-price structure provides cost certainty, but the absence of competitive bids means there's no direct market comparison to assess if the price is aligned with industry standards for similar engineering services. Further analysis would require understanding the scope of work and the specific engineering disciplines involved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not openly competed. This approach is typically used when only one responsible source can provide the required services. The lack of competition limits the government's ability to explore a wider range of solutions and potentially secure better pricing through a competitive bidding process. It also means that market forces were not leveraged to drive innovation or efficiency.

Taxpayer Impact: Taxpayers may not be receiving the best value due to the absence of competitive pressure, which typically leads to lower prices and improved service offerings.

Public Impact

The Department of Defense benefits from specialized engineering services essential for its operations. This contract supports the development and maintenance of critical defense systems. The geographic impact is concentrated in Florida, where the contractor is located. The contract likely supports a workforce of skilled engineers and technical professionals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source awards can limit innovation by not engaging a broader market.
Absence of small business participation may reduce opportunities for smaller, specialized firms.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Long-term nature of the contract ensures continuity of essential engineering services.
Award to a large, established contractor like Lockheed Martin suggests a focus on reliability and proven capability.

Sector Analysis

Engineering services are a vital component of the defense sector, encompassing design, development, testing, and sustainment of complex military systems. The market for these services is characterized by high barriers to entry, specialized expertise, and significant government investment. This contract fits within the broader category of defense contracting, where spending on engineering support is substantial and often directed towards large, established aerospace and defense firms due to the intricate nature of the requirements.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for them based on the provided data. The award to a large prime contractor like Lockheed Martin suggests that opportunities for small businesses would likely be through subcontracts, if any, awarded by the prime. The absence of a direct small business set-aside means that the primary contract does not directly aim to boost the small business ecosystem in this specific instance.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management structures. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver specified services at an agreed-upon price. Transparency might be limited due to the sole-source nature of the award, but contract details and performance reports are usually available through federal procurement databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Engineering Services
Lockheed Martin Contracts
Department of the Army Procurement
Sole Source Defense Contracts
Firm Fixed Price Contracts

Risk Flags

Sole-source award lacks competitive pricing.
Long contract duration may not be optimal for all service types.
Lack of small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.7 million to LOCKHEED MARTIN CORPORATION. IGF::OT::IGF

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 $15.7 million.

What is the period of performance?

Start: 2019-01-01. End: 2026-06-30.

What specific engineering services are being provided under this contract?

The provided data indicates the contract falls under NAICS code 541330 for Engineering Services. However, the specific nature of these services is not detailed. Typically, engineering services for the Department of Defense can range widely, including but not limited to, systems engineering, design and development of new technologies, integration of complex systems, testing and evaluation, technical support for existing platforms, and lifecycle management. Without further information on the Statement of Work (SOW), it is impossible to determine the precise engineering disciplines or project focus. This lack of specificity makes it difficult to benchmark performance or cost-effectiveness accurately.

How does the $15.67 million value compare to similar engineering services contracts awarded by the Department of the Army?

Comparing the $15.67 million value requires access to a database of similar contracts, considering factors like contract duration, scope of work, and specific engineering disciplines. Given this is a sole-source award with a long performance period (ending June 2026), it suggests a significant, ongoing need. However, without knowing the exact services, it's hard to make a direct comparison. Generally, large-scale, long-term engineering support for major defense systems can easily reach tens or hundreds of millions of dollars. The value here appears moderate for a contract with Lockheed Martin, but its appropriateness hinges entirely on the scope and criticality of the engineering tasks required.

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

The primary risks associated with a sole-source award of this magnitude include potential overpayment due to lack of competitive pricing, reduced incentive for the contractor to innovate or improve efficiency, and the possibility that alternative, potentially more cost-effective solutions from other vendors were not considered. There's also a risk of vendor lock-in, where the government becomes overly reliant on a single provider. For a $15.67 million contract, these risks are significant enough to warrant careful justification for the sole-source approach and robust oversight to ensure value for money is achieved despite the limited competition.

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

Lockheed Martin Corporation is a major defense contractor with an extensive history of providing a wide array of services, including engineering, to the Department of the Army and other military branches. Their track record generally involves large, complex programs requiring advanced technological capabilities. While specific performance metrics for this particular contract are not detailed, Lockheed Martin is known for its significant role in developing and supporting major defense platforms. Past performance reviews and contract awards data would provide a more granular view of their reliability, quality of service, and adherence to schedules and budgets on previous Army contracts.

What does the contract duration of nearly 7.5 years imply about the nature of the engineering services required?

A contract duration extending from January 1, 2019, to June 30, 2026 (approximately 2737 days or over 7.5 years) strongly suggests that the engineering services required are long-term, ongoing, and critical to a specific program or system. This duration is typical for sustainment engineering, lifecycle support, modernization efforts, or the development and integration of complex systems that require continuous technical expertise over an extended period. It implies a stable, predictable need rather than a short-term project, and it allows the contractor to build deep institutional knowledge of the systems they are supporting.

Are there any indications of potential cost overruns or performance issues given the contract type and award method?

The contract is a Firm Fixed Price (FFP) type, which is designed to place the risk of cost overruns on the contractor. This structure generally provides cost certainty for the government. However, the sole-source award method means there was no competitive bidding to establish the initial price. Therefore, while the FFP structure aims to control costs, the initial price itself might not be the most competitive. Without specific performance data or audit reports, it's impossible to definitively assess the risk of cost overruns or performance issues. Robust government oversight is crucial to mitigate these risks, especially in sole-source situations.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 5600 W SAND LAKE RD # MP-265, 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: $15,667,231

Exercised Options: $15,667,231

Current Obligation: $15,667,231

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $164,080

Contract Characteristics

Commercial Item: PRODUCTS OR SERVICES PURSUANT TO FAR 12.102(F)

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W52P1J19D0006

IDV Type: IDC

Timeline