Lockheed Martin awarded $33.9M for Army training systems maintenance, exceeding benchmark by 15%

Contract Overview

Contract Amount: $33,906,473 ($33.9M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2019-07-01

End Date: 2021-05-28

Contract Duration: 697 days

Daily Burn Rate: $48.6K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST NO FEE

Sector: Defense

Official Description: ARMY TRAINING AIDS, DEVICES, SIMULATORS AND SIMULATIONS (TADSS) MAINTENANCE PROGRAM (ATMP) AWARD OF TASK ORDER 0210.

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32801

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $33.9 million to LOCKHEED MARTIN CORPORATION for work described as: ARMY TRAINING AIDS, DEVICES, SIMULATORS AND SIMULATIONS (TADSS) MAINTENANCE PROGRAM (ATMP) AWARD OF TASK ORDER 0210. Key points: 1. Value for money appears fair, with a per-unit cost slightly above the benchmark. 2. Full and open competition was utilized, suggesting a competitive pricing environment. 3. Risk indicators are low, with a clear scope of work and established contractor. 4. Performance context shows a multi-year contract for essential training support. 5. Sector positioning is within defense engineering services, supporting critical military readiness.

Value Assessment

Rating: fair

The contract's total value of $33.9 million for maintenance services over approximately two years appears reasonable given the scope. However, the per-unit cost of $48,646 is approximately 15% higher than the benchmark of $42,300. This suggests that while the overall price is within an acceptable range, there may be opportunities for cost savings through more aggressive negotiation or by exploring alternative service providers in the future.

Cost Per Unit: $48,646 per unit, 15% above benchmark

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors were likely invited to bid. The presence of a single award suggests that Lockheed Martin was selected as the most advantageous offer. The competitive process should have driven pricing towards market rates, although the per-unit cost exceeding the benchmark warrants further investigation into the specific services provided.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure fair pricing, though the observed cost premium suggests potential for improved value.

Public Impact

Directly benefits the U.S. Army by ensuring the operational readiness of critical training aids, devices, simulators, and simulations. Supports the delivery of realistic and effective training environments for soldiers, enhancing combat preparedness. Geographic impact is primarily within Florida, where the services are likely performed or where the training assets are located. Workforce implications include employment for skilled technicians and engineers involved in maintaining complex simulation systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Per-unit cost exceeds benchmark, indicating potential for cost efficiencies.
Contract duration of nearly two years could lead to price escalation if not managed closely.
Reliance on a single contractor for maintenance could create future dependency.

Positive Signals

Awarded through full and open competition, promoting a competitive environment.
Contractor has a strong track record in defense systems maintenance.
Clear scope of work for essential training support services.

Sector Analysis

This contract falls within the Defense Engineering Services sector, a critical component of the broader aerospace and defense industry. This sector is characterized by high technological complexity, stringent quality requirements, and significant government investment. Spending in this area is driven by the need to maintain and modernize military equipment and training capabilities. Comparable spending benchmarks in this niche are often derived from similar maintenance and support contracts for complex defense systems.

Small Business Impact

The contract was awarded under full and open competition and does not indicate any specific small business set-aside. While Lockheed Martin is a large prime contractor, there is potential for subcontracting opportunities to small businesses within their supply chain. The extent of small business participation would depend on Lockheed Martin's subcontracting plan and the availability of qualified small business vendors for specialized maintenance tasks.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army contracting officers and program managers. Accountability measures are embedded in the contract terms, including performance standards and delivery schedules. Transparency is facilitated through contract award databases, though detailed performance metrics and cost breakdowns may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Army Training Aids, Devices, Simulators and Simulations (TADSS) Program
Defense Training and Simulation Contracts
Military Readiness Support Services
Engineering Services for Defense Systems

Risk Flags

Per-unit cost exceeds benchmark
Contract type (CNF) may reduce contractor incentive for efficiency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.9 million to LOCKHEED MARTIN CORPORATION. ARMY TRAINING AIDS, DEVICES, SIMULATORS AND SIMULATIONS (TADSS) MAINTENANCE PROGRAM (ATMP) AWARD OF TASK ORDER 0210.

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 $33.9 million.

What is the period of performance?

Start: 2019-07-01. End: 2021-05-28.

What is Lockheed Martin's track record with similar Army training systems maintenance contracts?

Lockheed Martin Corporation has a substantial and long-standing track record with the Department of Defense, including extensive experience in maintaining and supporting complex training systems. They are a primary contractor for various simulation and training programs across multiple military branches. Their history includes managing large-scale sustainment contracts, often involving advanced technologies and integrated logistics support. While specific performance data for this particular task order is not detailed here, their overall profile suggests a capability to handle the technical demands of the Army Training Aids, Devices, Simulators and Simulations (TADSS) Maintenance Program (ATMP). Past performance evaluations and contract close-out reports would provide more granular insights into their success rates, adherence to schedules, and cost control on similar endeavors.

How does the per-unit cost of $48,646 compare to industry benchmarks for similar maintenance services?

The per-unit cost of $48,646 for the maintenance of Army Training Aids, Devices, Simulators and Simulations (TADSS) is approximately 15% higher than the provided benchmark of $42,300. This suggests that the cost for this specific contract is on the higher side when compared to similar services. Factors contributing to this premium could include the complexity of the specific training systems being maintained, the specialized skills required for their upkeep, the geographic location of service delivery, or the specific terms and conditions negotiated within the contract. A thorough analysis would involve comparing the scope of work, service level agreements, and the types of equipment serviced against other publicly available data for defense simulation maintenance contracts to determine if this premium is justified by unique contract requirements or represents an area for potential cost savings.

What are the primary risks associated with this contract, and how are they mitigated?

The primary risks associated with this contract include potential cost overruns if maintenance needs are underestimated or if unforeseen technical issues arise, performance degradation impacting training effectiveness, and contractor dependency. Mitigation strategies are typically embedded within the contract structure. Cost risks are managed through the Cost No Fee (CNF) contract type, which places the financial risk on the contractor for cost overruns, although this is a Delivery Order under a larger IDIQ, so the overall contract type might differ. Performance risks are addressed through defined service level agreements (SLAs) and key performance indicators (KPIs) that the contractor must meet. Dependency risks are mitigated by the competitive nature of the initial award and the potential for future competition upon contract expiration, encouraging the contractor to maintain high performance standards to secure follow-on work.

What is the historical spending pattern for the Army Training Aids, Devices, Simulators and Simulations (TADSS) Maintenance Program (ATMP)?

Historical spending for the Army Training Aids, Devices, Simulators and Simulations (TADSS) Maintenance Program (ATMP) indicates a consistent and significant investment by the Department of the Army in maintaining its training infrastructure. While specific annual totals for ATMP are not provided in this data snippet, the existence of multiple task orders and delivery orders, such as the one awarded to Lockheed Martin, suggests a sustained program requirement. The total value of this single task order ($33.9 million) points to the substantial financial commitment involved in ensuring the operational readiness of these complex systems. Over the years, spending on TADSS maintenance has likely fluctuated based on modernization efforts, equipment lifecycle, and evolving training requirements, but it remains a critical budget item for the Army's training and readiness initiatives.

How does the 'Cost No Fee' (CNF) contract type influence contractor performance and taxpayer value?

The 'Cost No Fee' (CNF) contract type, as indicated by 'pt': 'COST NO FEE', is a variation of a cost-reimbursement contract where the contractor is reimbursed for allowable costs but receives no fee or profit. This structure is typically used for research and development efforts or when the scope of work is uncertain and cannot be easily defined upfront, making it difficult to establish a fixed price or incentive fee. For the contractor, the primary motivation is cost control, as any savings achieved do not result in additional profit, and any cost overruns are absorbed by the contractor. From a taxpayer perspective, CNF contracts aim to minimize profit margins, potentially leading to lower overall costs, especially in situations where the government wants to encourage innovation or exploration without the contractor bearing excessive financial risk. However, it can also reduce the contractor's incentive to perform efficiently or innovate beyond the basic requirements, as there is no direct financial reward for doing so.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W900KK17R0034

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

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: $35,023,867

Exercised Options: $35,023,867

Current Obligation: $33,906,473

Subaward Activity

Number of Subawards: 156

Total Subaward Amount: $412,965,095

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W900KK18D0018

IDV Type: IDC

Timeline