Lockheed Martin awarded $54.6M for JLCCTC Bridge Contract, a follow-on to a previous award

Contract Overview

Contract Amount: $54,641,623 ($54.6M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2018-12-13

End Date: 2020-09-11

Contract Duration: 638 days

Daily Burn Rate: $85.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: THIS IS A CONTRACT AWARD FOR THE JOINT LAND COMPONENT CONSTRUCTIVE TRAINING CAPABILITY (JLCCTC) BRIDGE CONTRACT. THIS CONTRACT AWARD IS A FOLLOW ON TO CONTRACT NUMBER: W900KK-13-D-0002.

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32826

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $54.6 million to LOCKHEED MARTIN CORPORATION for work described as: THIS IS A CONTRACT AWARD FOR THE JOINT LAND COMPONENT CONSTRUCTIVE TRAINING CAPABILITY (JLCCTC) BRIDGE CONTRACT. THIS CONTRACT AWARD IS A FOLLOW ON TO CONTRACT NUMBER: W900KK-13-D-0002. Key points: 1. Contract is a follow-on, suggesting a need for continued services and potential for contractor familiarity. 2. Awarded as a definitive contract, indicating a clear scope and pricing structure. 3. The contract type is Cost Plus Fixed Fee, which can incentivize cost control by the contractor. 4. The contract duration is substantial, spanning over 600 days, implying a significant project. 5. The contractor, Lockheed Martin, is a major defense industry player with extensive experience. 6. The North American Industry Classification System (NAICS) code 541512 points to computer systems design services. 7. The contract was not competed, raising questions about potential cost savings and market exploration.

Value Assessment

Rating: questionable

The contract value of $54.6 million for a two-year period for computer systems design services requires careful benchmarking. Without specific deliverables or performance metrics, it is difficult to assess value for money. The Cost Plus Fixed Fee (CPFF) contract type means the government pays costs plus a fixed fee, which can lead to cost overruns if not managed tightly. Comparing this to similar JLCCTC-related contracts or general IT services contracts of similar scope and duration would be necessary for a robust assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This typically occurs when a specific contractor possesses unique capabilities, intellectual property, or when urgency dictates. The lack of competition means potential savings from a competitive bidding process were not realized, and it limits the government's ability to explore alternative solutions or pricing from the market.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure, potentially leading to higher costs than if multiple vendors had bid.

Public Impact

The primary beneficiaries are the Department of the Army, which will receive continued support for the JLCCTC program. The services delivered are related to computer systems design, likely involving software development, integration, and maintenance for training simulations. The geographic impact is primarily Florida, where the contract is being performed. Workforce implications include employment opportunities for IT professionals and support staff within Lockheed Martin and potentially its subcontractors in Florida.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Cost Plus Fixed Fee contract type requires diligent oversight to prevent cost overruns.
Follow-on nature of the contract could indicate a lack of market research for alternative solutions.
The specific nature of 'bridge contract' suggests a temporary solution, raising questions about long-term strategy and cost-effectiveness.

Positive Signals

Contract continuation suggests successful performance on the previous award.
Lockheed Martin's established presence in the defense sector implies technical expertise.
Definitive contract structure provides a clear framework for services and payment.

Sector Analysis

The contract falls within the IT services sector, specifically computer systems design. The defense industry heavily relies on such services for training, simulation, and operational support. The market for defense IT services is substantial, with significant government spending allocated annually. This contract for the JLCCTC Bridge appears to be a specialized component within the broader defense simulation and training market.

Small Business Impact

The data indicates that small business participation (sb) is false, and there is no indication of a small business set-aside (ss). This suggests that the contract was not specifically targeted towards small businesses, and opportunities for small business subcontracting may be limited or not explicitly mandated within this award.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures would be tied to the terms of the Cost Plus Fixed Fee contract, requiring detailed reporting of costs and progress. Transparency may be limited due to the sole-source nature of the award and the proprietary aspects of the JLCCTC system. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Joint Land Component Constructive Training Capability (JLCCTC)
Army Training Simulation Programs
Defense IT Services Contracts
Computer Systems Design Services

Risk Flags

Sole-source award may limit cost savings.
CPFF contract requires robust cost oversight.
Lack of competition could stifle innovation.
Potential for contractor lock-in.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $54.6 million to LOCKHEED MARTIN CORPORATION. THIS IS A CONTRACT AWARD FOR THE JOINT LAND COMPONENT CONSTRUCTIVE TRAINING CAPABILITY (JLCCTC) BRIDGE CONTRACT. THIS CONTRACT AWARD IS A FOLLOW ON TO CONTRACT NUMBER: W900KK-13-D-0002.

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 $54.6 million.

What is the period of performance?

Start: 2018-12-13. End: 2020-09-11.

What specific capabilities does the JLCCTC Bridge Contract provide, and how do they differ from the previous contract?

The provided data indicates this is a 'bridge contract' and a follow-on to a previous award (W900KK-13-D-0002). While the exact technical specifications are not detailed, bridge contracts typically serve to maintain continuity of services or operations during a period when a new, long-term contract is being established or when there's an urgent need. It's likely that the JLCCTC Bridge Contract ensures the continued functionality, support, and potentially minor enhancements of the Joint Land Component Constructive Training Capability simulation system. This could involve maintaining software, hardware, network infrastructure, and providing technical support to ensure the training environment remains operational for the Army. The difference from the previous contract might lie in the scope of maintenance, the specific systems being supported, or the duration, designed to fill a gap until a more comprehensive solution is procured.

Why was this contract awarded on a sole-source basis instead of being competed?

The contract was awarded as 'NOT COMPETED,' indicating a sole-source procurement. Common justifications for sole-source awards include the unique capabilities of a specific contractor, the need for compatibility with existing systems where only one vendor can provide the necessary integration, or urgent and compelling circumstances that preclude full and open competition. Given this is a follow-on to a previous contract for the JLCCTC, Lockheed Martin may possess proprietary knowledge, specialized tools, or unique expertise essential for maintaining or bridging the JLCCTC system. Without further details on the justification provided by the Department of the Army, it's presumed that competitive procurement was deemed impractical or not in the government's best interest at the time of award.

How does the Cost Plus Fixed Fee (CPFF) contract type influence cost management and contractor incentives?

The Cost Plus Fixed Fee (CPFF) contract type means the contractor (Lockheed Martin) is reimbursed for all allowable costs incurred during the performance of the contract, plus a predetermined fixed fee representing profit. This structure incentivizes the contractor to complete the work efficiently to maximize their profit margin, as the fee is fixed regardless of the final cost. However, it also places a significant burden on the government to meticulously monitor and audit the contractor's costs to ensure they are reasonable, allocable, and allowable. Unlike fixed-price contracts, CPFF offers less cost certainty for the government, as the final price can fluctuate based on actual costs. Effective oversight is crucial to prevent potential cost overruns and ensure value for money.

What is the historical spending trend for the JLCCTC program or similar simulation training capabilities?

Analyzing historical spending for the JLCCTC program or similar simulation training capabilities is crucial for context. The provided data shows this specific award is $54.6 million, following a previous contract (W900KK-13-D-0002). To understand trends, one would need to examine the total obligated amounts and contract actions for the JLCCTC program over several fiscal years, identifying the primary contractors and the nature of their awards (e.g., development, sustainment, upgrades). Comparing this spending to overall Army training budgets or broader Department of Defense simulation and training investments would reveal whether spending on JLCCTC is increasing, decreasing, or stable. Understanding these patterns helps assess the program's long-term viability and the government's commitment to this type of training technology.

What are the potential risks associated with a sole-source, follow-on contract for complex IT systems like JLCCTC?

Sole-source, follow-on contracts for complex IT systems like the JLCCTC present several risks. Firstly, the lack of competition can lead to reduced innovation and potentially higher prices, as the incumbent contractor faces less pressure to improve efficiency or offer cost savings. Secondly, there's a risk of contractor 'lock-in,' where the government becomes overly reliant on the incumbent's specific knowledge and infrastructure, making it difficult and costly to switch providers in the future. Thirdly, without competitive benchmarking, it can be challenging to ascertain if the services provided represent true market value. Finally, if the original procurement process was flawed or if the follow-on award lacks clear performance metrics, there's a risk of substandard service delivery or cost overruns, especially with CPFF contracts.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: RESEARCH AND DEVELOPMENT › OTHER RESEARCH/DEVELOPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W900KK19R0008

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 100 GLOBAL INNOVATION CIR, ORLANDO, FL, 32825

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: $71,084,950

Exercised Options: $58,489,797

Current Obligation: $54,641,623

Subaward Activity

Number of Subawards: 17

Total Subaward Amount: $1,759,681

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline