Lockheed Martin awarded $40.9M for Army training aids, devices, simulators, and simulations maintenance

Contract Overview

Contract Amount: $40,919,067 ($40.9M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2022-07-01

End Date: 2023-06-30

Contract Duration: 364 days

Daily Burn Rate: $112.4K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ESTABLISH AND INCREMENTALLY FUND CONTRACT LINE ITEM NUMBERS 4001-4004, 4006-4011, AND 4200 VIA PR# 0011747815-0001 FOR ARMY TRAINING AIDS, DEVICES, SIMULATORS, & SIMULATIONS MAINTENANCE PROGRAM ORDERING PERIOD 5.

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32801

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $40.9 million to LOCKHEED MARTIN CORPORATION for work described as: ESTABLISH AND INCREMENTALLY FUND CONTRACT LINE ITEM NUMBERS 4001-4004, 4006-4011, AND 4200 VIA PR# 0011747815-0001 FOR ARMY TRAINING AIDS, DEVICES, SIMULATORS, & SIMULATIONS MAINTENANCE PROGRAM ORDERING PERIOD 5. Key points: 1. Contract focuses on essential maintenance for Army training systems, ensuring operational readiness. 2. Awarded via full and open competition, suggesting a competitive bidding process. 3. The contract is a firm-fixed-price delivery order, providing cost certainty for the government. 4. Performance period spans one year, indicating a need for ongoing, short-term support. 5. The value of this contract is moderate within the broader defense training and simulation sector. 6. This award contributes to the Army's modernization efforts in training technologies.

Value Assessment

Rating: good

The contract value of $40.9 million for a one-year period for maintenance of training aids, devices, simulators, and simulations appears reasonable given the scope of support for a major military branch. Benchmarking against similar large-scale maintenance contracts for complex defense systems suggests this pricing is within expected ranges. The firm-fixed-price structure helps control costs for the government, although the specific value-for-money assessment would require deeper analysis of the service level agreements and performance metrics.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The specific number of bidders is not provided, but this procurement method generally fosters price discovery and encourages competitive pricing. The Army's decision to use full and open competition suggests confidence in the availability of multiple sources capable of meeting the complex requirements for maintaining advanced training systems.

Taxpayer Impact: A full and open competition is beneficial for taxpayers as it is expected to yield the most competitive pricing and potentially higher quality services by allowing a wide range of capable contractors to participate.

Public Impact

Directly benefits Army personnel by ensuring the reliability and availability of critical training systems. Supports the operational readiness and effectiveness of soldiers through realistic simulation and training environments. The contract's impact is primarily within the Army's training command infrastructure. Maintains the technological capabilities of advanced training simulators, indirectly supporting the defense industrial workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if maintenance requirements are highly specialized and tied to specific Lockheed Martin systems.
Reliance on a single contractor for critical maintenance could pose risks if performance degrades or if the contractor faces financial instability.

Positive Signals

Award to a well-established defense contractor with a proven track record in aerospace and defense.
Firm-fixed-price contract provides cost predictability for the government.
Full and open competition suggests a robust market exists for these services.

Sector Analysis

The defense training and simulation sector is a significant segment of the broader aerospace and defense industry, characterized by high technological complexity and substantial government investment. This contract fits within the maintenance and sustainment sub-sector, which is crucial for ensuring the long-term operational effectiveness of military equipment. Spending in this area is driven by the need to maintain readiness, adapt to evolving threats, and incorporate new technologies into training programs. Comparable spending benchmarks would typically involve multi-year sustainment contracts for major weapon systems or simulation platforms.

Small Business Impact

This contract does not appear to have a small business set-aside, as indicated by 'sb': false. Furthermore, the prime contractor, Lockheed Martin Corporation, is a large defense contractor. While there is no direct set-aside, there may be opportunities for small businesses to participate as subcontractors to Lockheed Martin, depending on the specific maintenance tasks and supply chain requirements. The extent of small business subcontracting would need further investigation.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. The firm-fixed-price nature of the contract provides a degree of financial oversight by establishing a set cost. Performance monitoring would be conducted to ensure Lockheed Martin meets the specified maintenance requirements and service level agreements. Transparency is generally maintained through contract award databases, though detailed performance reports may not be publicly accessible.

Related Government Programs

Army Training Aids, Devices, Simulators, and Simulations (TADSS) Program
Defense Maintenance and Sustainment Contracts
Military Simulation and Training Systems

Risk Flags

Potential for cost overruns if scope is not clearly defined.
Risk of performance degradation if contractor prioritizes profit over service quality.
Dependence on a single contractor for critical training system maintenance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.9 million to LOCKHEED MARTIN CORPORATION. ESTABLISH AND INCREMENTALLY FUND CONTRACT LINE ITEM NUMBERS 4001-4004, 4006-4011, AND 4200 VIA PR# 0011747815-0001 FOR ARMY TRAINING AIDS, DEVICES, SIMULATORS, & SIMULATIONS MAINTENANCE PROGRAM ORDERING PERIOD 5.

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 $40.9 million.

What is the period of performance?

Start: 2022-07-01. End: 2023-06-30.

What is Lockheed Martin's track record with the Army's Training Aids, Devices, Simulators, and Simulations (TADSS) program?

Lockheed Martin Corporation has a long-standing and significant presence in the defense sector, including extensive experience with simulation and training systems for various military branches. While specific details on their historical performance solely for the Army's TADSS program under this particular contract line item structure (CLINs 4001-4004, 4006-4011, and 4200) require deeper database analysis, the company is a prime contractor for numerous complex training and simulation solutions. Their broader portfolio includes developing, manufacturing, and sustaining advanced simulators, virtual training environments, and related support systems. Given their size and scope, it is probable they have been involved in various aspects of TADSS maintenance and upgrades over the years, either directly or through predecessor contracts and programs. Assessing their specific performance on this contract would involve reviewing past performance evaluations, delivery order history, and any documented issues or commendations related to their support of Army training systems.

How does the $40.9 million contract value compare to previous spending on Army training aids maintenance?

To accurately compare this $40.9 million contract value to previous spending, a historical analysis of the Army Training Aids, Devices, Simulators, & Simulations (TADSS) Maintenance Program Ordering Period 5 (and potentially prior ordering periods) would be necessary. This would involve examining contract awards for similar maintenance services over the past several fiscal years. Factors such as inflation, changes in the scope of required maintenance (e.g., introduction of new training technologies, decommissioning of older systems), and the number of active training systems would influence year-over-year spending. Without access to specific historical contract data for this program, it's challenging to provide a precise comparison. However, the value suggests a substantial, ongoing requirement for sustainment, consistent with the large scale of the U.S. Army's training infrastructure.

What are the primary risks associated with this firm-fixed-price contract for maintenance services?

The primary risks associated with this firm-fixed-price (FFP) contract for maintenance services, while offering cost certainty, revolve around potential impacts on service quality and scope creep. If the fixed price is set too low or if unforeseen maintenance issues arise that are not adequately covered by the contract's scope, the contractor (Lockheed Martin) might be incentivized to cut corners on service quality, use lower-cost parts, or limit the extent of maintenance performed to maintain profitability. Conversely, if the scope is not clearly defined, the government might face challenges in ensuring all necessary maintenance is covered without incurring additional costs. Another risk is the potential for the contractor to become overly reliant on the FFP structure, leading to resistance in addressing emergent issues that fall outside the narrowly defined scope, potentially impacting training readiness. Effective oversight and clear performance metrics are crucial to mitigate these risks.

How effective is the full and open competition process in ensuring value for money for this type of defense maintenance contract?

The full and open competition process is generally considered effective in ensuring value for money for defense maintenance contracts like this one, as it maximizes the pool of potential bidders, thereby increasing the likelihood of receiving competitive pricing. By allowing any responsible source to submit an offer, the government can leverage market forces to drive down costs and encourage innovation. However, the effectiveness is contingent on several factors: the clarity and completeness of the solicitation requirements, the technical complexity of the services, and the government's ability to accurately evaluate the proposals received. For specialized maintenance of advanced training systems, ensuring that all bidders possess the necessary technical expertise and that the evaluation criteria adequately weigh technical merit alongside price is critical. If the competition is robust (i.e., multiple capable bidders submit offers), it strongly suggests that the awarded price reflects a competitive market rate.

What are the potential workforce implications of this contract award for Lockheed Martin and its subcontractors?

This contract award is likely to have positive workforce implications for Lockheed Martin and potentially its subcontractors, particularly in specialized fields related to simulation, electronics, and mechanical maintenance. The $40.9 million value over one year suggests a need for a dedicated team of technicians, engineers, logistics personnel, and program managers to execute the maintenance tasks effectively. For Lockheed Martin, this contract contributes to maintaining a stable workforce engaged in sustainment operations. Depending on the specific maintenance requirements and the company's internal resource allocation, this could involve assigning existing personnel or hiring new staff. If subcontractors are utilized, particularly for specialized components or regional support, it would create employment opportunities within those smaller firms, potentially boosting the regional economies where these subcontractors are located.

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: FIRM FIXED PRICE (J)

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: $41,013,844

Exercised Options: $41,013,844

Current Obligation: $40,919,067

Subaward Activity

Number of Subawards: 58

Total Subaward Amount: $3,995,718

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