DoD awards $22M engineering services contract to Lockheed Martin for Saudi Arabia support

Contract Overview

Contract Amount: $21,954,488 ($22.0M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2014-01-01

End Date: 2017-09-30

Contract Duration: 1,368 days

Daily Burn Rate: $16.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: NEW CONTRACT TO SUPPORT SAUDI ARABIA SRA

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32819

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $22.0 million to LOCKHEED MARTIN CORPORATION for work described as: NEW CONTRACT TO SUPPORT SAUDI ARABIA SRA Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Engineering services are critical for complex defense support operations. 3. The contract duration of over three years suggests a significant, ongoing need. 4. Fixed-price contract type aims to control costs, but scope creep is a potential risk. 5. Awarded by the Department of the Army, indicating a focus on military logistics and support. 6. The geographic focus on Florida for contract administration may imply specific operational or training requirements.

Value Assessment

Rating: fair

The contract value of $21.95 million for engineering services over approximately 3.5 years is difficult to benchmark without more specific details on the services provided. As a sole-source award, direct comparison to competitive bids is not possible. The firm fixed-price structure suggests an attempt to manage costs, but the overall value for money depends heavily on the efficiency and effectiveness of Lockheed Martin's performance in supporting Saudi Arabia's requirements.

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 specialized capabilities, security clearances, or existing knowledge to fulfill the requirement. The lack of competition means that taxpayers did not benefit from potential cost savings that could arise from a competitive bidding process.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as there is no competitive pressure to drive down costs. This contract's value is determined by negotiation rather than market forces.

Public Impact

The primary beneficiary is the U.S. Department of Defense, which receives engineering support for its operations related to Saudi Arabia. Services delivered likely include technical assistance, planning, and potentially training related to defense systems or operations. The contract's administration in Florida suggests a potential impact on the defense industry workforce and related businesses in that state. While not directly a public service, the contract supports national defense objectives and international security cooperation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits transparency and potential cost savings.
Lack of competition may result in a higher price than a competitively bid contract.
The specific nature of 'engineering services' for a foreign partner requires careful oversight to ensure alignment with U.S. interests.

Positive Signals

Firm fixed-price contract type helps to establish cost certainty.
Lockheed Martin is a major defense contractor with extensive experience, suggesting a high likelihood of capability.
The contract duration indicates a sustained need and potential for long-term partnership.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader aerospace and defense industry. This sector provides specialized technical expertise for complex projects, often involving high-value, sensitive government procurements. The market is characterized by a few large, established players like Lockheed Martin, alongside numerous smaller, specialized firms. Government spending in this area is substantial, driven by national security needs and the complexity of modern defense systems.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there information suggesting significant subcontracting opportunities for small businesses. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless Lockheed Martin voluntarily engages small businesses for specific support roles.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Army contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified services within the agreed price. Transparency is limited due to the sole-source nature, but contract performance data and financial expenditures would typically be tracked internally and potentially reported through government systems.

Related Government Programs

Foreign Military Sales (FMS) support contracts
Defense Engineering Services
International Security Cooperation Programs
Aerospace and Defense Contractor Support

Risk Flags

Sole-source award
Potential for cost overruns without competition
Lack of detailed service scope in public data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.0 million to LOCKHEED MARTIN CORPORATION. NEW CONTRACT TO SUPPORT SAUDI ARABIA SRA

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 $22.0 million.

What is the period of performance?

Start: 2014-01-01. End: 2017-09-30.

What specific engineering services are being provided under this contract to Saudi Arabia?

The provided data indicates the contract is for 'Engineering Services' (NAICS 541330) supporting Saudi Arabia. However, the specific nature of these services is not detailed. Typically, such contracts could encompass a wide range of activities including systems engineering, technical support, logistics planning, integration of defense systems, training development, or operational analysis. Given the sole-source nature and the client (Saudi Arabia), these services likely relate to specific defense equipment or operational capabilities that Lockheed Martin is involved with, requiring specialized expertise not readily available elsewhere or necessitating continuity with existing systems.

How does the $21.95 million contract value compare to similar engineering support contracts for international partners?

Benchmarking this $21.95 million contract value is challenging without knowing the precise scope and duration of the engineering services. Contracts for international defense support can vary significantly based on the complexity of the systems, the level of technical expertise required, and the duration of the engagement. Lockheed Martin, as a major defense contractor, often handles large-scale, multi-year contracts. This particular award, spanning over three years, suggests a substantial but not exceptionally large value for a sole-source engagement of this nature, especially when compared to major platform sales or extensive training programs. A more accurate comparison would require access to data on contracts with similar service descriptions and client nations.

What are the primary risks associated with a sole-source award for engineering services in a defense context?

The primary risks associated with a sole-source award for engineering services in a defense context include potential overpricing due to the lack of competitive pressure, reduced incentive for the contractor to innovate or optimize costs, and a lack of transparency in the procurement process. Taxpayers may not receive the best possible value for their money. Furthermore, reliance on a single provider can create dependency and limit future flexibility if alternative solutions or providers emerge. Ensuring robust oversight and performance management becomes even more critical to mitigate these risks and ensure the services delivered meet requirements effectively and efficiently.

What is Lockheed Martin's track record in providing engineering services for international defense partners?

Lockheed Martin Corporation is a global leader in the aerospace, defense, and security industry, with extensive experience in providing a wide array of engineering services to international partners. Their track record includes supporting numerous foreign military sales (FMS) programs, often involving complex systems integration, sustainment, training, and technical support for advanced platforms such as fighter aircraft, missile defense systems, and helicopters. They have a long history of working with governments worldwide, including those in the Middle East. While specific details of past performance on similar Saudi Arabia-related contracts would require deeper research, Lockheed Martin's overall profile suggests a high capability and established relationships in this domain.

How has federal spending on engineering services for international defense support evolved over the past five years?

Federal spending on engineering services for international defense support has generally remained robust, driven by ongoing geopolitical security needs and the U.S. role in global security partnerships. While specific figures for 'engineering services' tied solely to 'international defense support' are difficult to isolate without granular data, the broader categories of Foreign Military Sales (FMS) and defense security cooperation funding indicate consistent, significant investment. Trends often reflect shifts in global threats, specific regional security requirements (e.g., Middle East, Indo-Pacific), and the lifecycle needs of major defense equipment provided to allies. The overall demand for specialized engineering expertise to maintain, upgrade, and operate advanced U.S.-origin defense systems abroad continues to be a substantial component of defense appropriations.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W58RGZ13R0059

Offers Received: 1

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: $21,954,488

Exercised Options: $21,954,488

Current Obligation: $21,954,488

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline