DoD's $198.6M Letter Contract for Engineering Services to Lockheed Martin Raises Questions on Competition
Contract Overview
Contract Amount: $19,864,776 ($19.9M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2015-04-28
End Date: 2022-04-29
Contract Duration: 2,558 days
Daily Burn Rate: $7.8K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Other
Official Description: IGF::CL,CT::IGF CONTRACT ACTION REPORT (CAR) TRANS NO 01 CREATED FOR LETTER CONTRACT W58RGZ-15-C-0045. THE ENTRY FOR "BASE AND ALL OPTIONS VALUE" IN THIS CAR REPRESENTS THE UNFUNDED PORTION OF THE NOT-TO-EXCEED LETTER CONTRACT VALUE.
Place of Performance
Location: ORLANDO, ORANGE County, FLORIDA, 32819
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $19.9 million to LOCKHEED MARTIN CORPORATION for work described as: IGF::CL,CT::IGF CONTRACT ACTION REPORT (CAR) TRANS NO 01 CREATED FOR LETTER CONTRACT W58RGZ-15-C-0045. THE ENTRY FOR "BASE AND ALL OPTIONS VALUE" IN THIS CAR REPRESENTS THE UNFUNDED PORTION OF THE NOT-TO-EXCEED LETTER CONTRACT VALUE. Key points: 1. The contract's base and all options value of $198.6M represents an unfunded portion of a letter contract. 2. Awarded to Lockheed Martin Corporation by the Department of the Army, it falls under Engineering Services. 3. The contract was not available for competition, indicating a sole-source or limited competition scenario. 4. The fixed-price incentive contract type suggests efforts to control costs while incentivizing performance.
Value Assessment
Rating: questionable
The reported value of $198.6M is stated to be the unfunded portion of a letter contract, making direct pricing assessment difficult without the funded amount. Benchmarking is not feasible with this information.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was 'NOT AVAILABLE FOR COMPETITION,' suggesting a sole-source or limited competition award. This lack of broad competition may have impacted price discovery and potentially led to higher costs for the government.
Taxpayer Impact: The absence of competitive bidding for a contract of this magnitude raises concerns about potential overspending and inefficient use of taxpayer funds.
Public Impact
Taxpayers may be paying more than necessary due to the lack of competition. The long duration (2558 days) suggests a significant, ongoing need for these engineering services. Transparency is limited as the funded portion and specific services are not detailed in this report.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Unclear funded value
- Long contract duration
Positive Signals
- Fixed-price incentive contract type aims for cost control
Sector Analysis
This contract falls within the Engineering Services sector (NAICS 541330), which is crucial for defense projects. Spending benchmarks for this sector vary widely based on project scope and complexity.
Small Business Impact
The contract was awarded to Lockheed Martin Corporation, a large prime contractor. There is no indication of small business participation in this specific contract action report.
Oversight & Accountability
The nature of a letter contract and its unfunded value reporting requires careful oversight to ensure proper financial management and accountability. The lack of competition warrants scrutiny.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Potential for inflated pricing due to lack of competition.
- Lack of transparency regarding funded contract value.
- Insufficient justification for sole-source award.
- Long contract duration may indicate scope creep or poor initial planning.
- Limited visibility into small business subcontracting opportunities.
Tags
engineering-services, department-of-defense, fl, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $19.9 million to LOCKHEED MARTIN CORPORATION. IGF::CL,CT::IGF CONTRACT ACTION REPORT (CAR) TRANS NO 01 CREATED FOR LETTER CONTRACT W58RGZ-15-C-0045. THE ENTRY FOR "BASE AND ALL OPTIONS VALUE" IN THIS CAR REPRESENTS THE UNFUNDED PORTION OF THE NOT-TO-EXCEED LETTER CONTRACT VALUE.
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 $19.9 million.
What is the period of performance?
Start: 2015-04-28. End: 2022-04-29.
What was the actual funded value of this letter contract, and how was it determined without competition?
The provided data states the reported value is the unfunded portion of a letter contract. Determining the actual funded value and the justification for its sole-source award is critical for assessing value for money. Without this information, it's impossible to ascertain if the government received a fair price or if competitive processes were bypassed inappropriately.
What specific engineering services were procured, and how do they justify the 'not available for competition' status?
The NAICS code indicates Engineering Services, but the specific nature of these services is not detailed. A thorough justification is required to understand why these services could not be competed. This could involve proprietary technology, unique expertise, or urgent national security needs, but these must be clearly documented and validated.
How will the fixed-price incentive structure effectively manage costs given the lack of initial competition?
The fixed-price incentive (FPI) contract aims to share cost savings or overruns between the government and contractor. However, its effectiveness in managing costs is diminished when competition is absent. The government must ensure the target cost and incentive sharing mechanisms are rigorously negotiated and monitored to prevent contractor overreach.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W58RGZ14R0172
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
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: $32,443,299
Exercised Options: $19,864,776
Current Obligation: $19,864,776
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2015-04-28
Current End Date: 2022-04-29
Potential End Date: 2022-04-29 12:04:00
Last Modified: 2025-05-28
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