DoD's $22.7M IT Services Contract Awarded to Lockheed Martin Corporation

Contract Overview

Contract Amount: $22,754,505 ($22.8M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2005-07-07

End Date: 2008-09-30

Contract Duration: 1,181 days

Daily Burn Rate: $19.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Place of Performance

Location: MANASSAS, PRINCE WILLIAM County, VIRGINIA, 20110

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $22.8 million to LOCKHEED MARTIN CORPORATION for work described as: Key points: 1. Contract awarded for IT services, indicating a need for specialized computer-related support. 2. The contract was awarded through full and open competition, suggesting a robust bidding process. 3. A firm-fixed-price contract type implies that the contractor assumes the risk for cost overruns. 4. The duration of the contract (1181 days) suggests a long-term need for these services. 5. The award to a large, established contractor like Lockheed Martin may indicate complex or high-stakes requirements. 6. The contract falls under the 'Other Computer Related Services' NAICS code, providing context for the services rendered.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific service details. However, the total award of $22.7 million over approximately three years averages to about $7.5 million per year. This figure needs to be compared against the market rates for similar IT services, considering the complexity and scope. Given the firm-fixed-price nature, the government aimed to secure a defined outcome at a set price, but the ultimate value depends on the successful delivery of services and whether the price was competitive among bidders.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. The presence of 4 bids indicates a degree of competition, which is generally positive for price discovery and ensuring the government receives competitive offers. The level of competition can influence the final price, with more bidders typically leading to lower prices for the government.

Taxpayer Impact: The full and open competition process for this contract suggests that taxpayers benefited from a competitive bidding environment, likely resulting in a more favorable price than a sole-source award.

Public Impact

The Department of Defense is the primary beneficiary, receiving IT services essential for its operations. The contract supports the delivery of 'Other Computer Related Services,' which could encompass a wide range of IT functions. The geographic impact is likely concentrated around the agency's operational centers, primarily in Virginia. The contract may have implications for the IT workforce, potentially creating or sustaining jobs within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific details on the services rendered makes it difficult to assess performance against expectations.
The significant contract value could represent a substantial portion of the agency's IT budget for the period.
Reliance on a single large contractor for critical IT services could pose a risk if performance issues arise.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process.
Firm-fixed-price contract type shifts cost overrun risk to the contractor.
Long contract duration suggests a stable, ongoing need for the services provided.

Sector Analysis

The IT services sector is a vast and critical component of government operations. This contract falls under the 'Other Computer Related Services' category (NAICS 541519), which is broad and can include areas like IT consulting, system integration, and IT support. The federal government is a major consumer of IT services, with spending often concentrated in areas like defense, intelligence, and civilian agency modernization. Benchmarking this $22.7 million contract requires comparing it to similar-sized IT service contracts awarded by the DoD or other large federal agencies, considering the specific nature of the services provided.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss': false flag suggests no specific small business subcontracting goals were mandated. This means that opportunities for small businesses to participate in this contract are likely limited to the general competitive pool or through voluntary subcontracting by the prime contractor, Lockheed Martin Corporation. The absence of set-aside provisions means the primary focus was on securing the best offer through full and open competition, rather than specifically promoting small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver specified services at an agreed-upon price. Transparency is generally facilitated through contract award databases, though specific performance metrics and detailed service delivery reports may not always be publicly accessible. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Department of Defense IT Modernization Programs
Defense Information Systems Agency (DISA) Contracts
Federal Civilian IT Services Contracts
IT Consulting and Support Services

Risk Flags

Potential for cost overruns for the contractor under firm-fixed-price.
Risk of service quality degradation if contractor faces cost pressures.
Dependence on a single large contractor for critical IT functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.8 million to LOCKHEED MARTIN CORPORATION. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $22.8 million.

What is the period of performance?

Start: 2005-07-07. End: 2008-09-30.

What specific IT services were provided under this contract?

The provided data indicates the contract falls under NAICS code 541519, 'Other Computer Related Services.' This is a broad category that can encompass a wide array of IT functions, including but not limited to IT consulting, system integration, network management, cybersecurity services, software development support, and IT infrastructure maintenance. Without more specific contract details or a Statement of Work (SOW), it is impossible to determine the exact nature of the services rendered. However, given the award to Lockheed Martin Corporation by the Department of Defense, it is likely these services were critical to supporting military operations, intelligence gathering, or administrative functions, potentially involving complex systems and high security requirements.

How does the $22.7 million award compare to similar IT services contracts awarded by the DoD?

Comparing the $22.7 million award requires context regarding the contract's duration and scope. This contract spanned approximately three years (1181 days), averaging about $7.5 million annually. The Department of Defense awards a vast number of IT contracts, ranging from small, specialized support tasks to massive enterprise-wide system procurements. To benchmark this contract effectively, one would need to identify comparable contracts for 'Other Computer Related Services' awarded within a similar timeframe and to similar large defense contractors. Factors such as the specific services (e.g., cybersecurity vs. basic IT support), the level of security clearance required, and the criticality of the systems supported would heavily influence pricing. Generally, large, complex IT service contracts for defense applications can run into tens or hundreds of millions of dollars, making this a mid-to-large-sized award within that context.

What are the potential risks associated with a firm-fixed-price contract of this magnitude and duration?

A firm-fixed-price (FFP) contract, while beneficial for budget certainty, carries inherent risks, especially for long-duration contracts like this one (1181 days). The primary risk for the contractor, Lockheed Martin Corporation, is cost overrun. If the actual costs of providing the IT services exceed the fixed price due to unforeseen technical challenges, labor cost increases, or scope creep (if not managed tightly), the contractor absorbs the loss. Conversely, the government's risk is that the contractor may cut corners on quality or service delivery to protect profit margins if costs escalate. For a contract of this size ($22.7 million), the potential financial exposure for the contractor is significant. Effective contract management and oversight by the Defense Contract Management Agency (DCMA) are crucial to mitigate these risks and ensure the government receives the contracted services at the agreed-upon quality and price.

What does the 'full and open competition' with 4 bidders imply for the government and taxpayers?

The 'full and open competition' designation, coupled with 4 bids received, is a positive indicator for both the government and taxpayers. It signifies that the bidding process was not restricted, allowing any qualified company to compete. The presence of multiple bidders (four in this case) generally fosters a competitive environment, which tends to drive down prices and encourage innovation as contractors vie for the award. For taxpayers, this means the government likely secured the IT services at a more competitive rate than it might have through a sole-source or limited competition procurement. It also suggests that the selection process was based on merit and best value, rather than pre-determined relationships, enhancing accountability and potentially leading to better service delivery.

How does the contractor's track record (Lockheed Martin Corporation) influence the assessment of this contract?

Lockheed Martin Corporation is a major defense contractor with extensive experience in IT services, systems integration, and complex project management across various government sectors. Their established presence and track record suggest a high likelihood of possessing the technical expertise, resources, and security clearances necessary to fulfill the requirements of a Department of Defense IT services contract. This familiarity can reduce perceived risk for the government, as the contractor is likely well-versed in government contracting processes, compliance requirements, and operational demands. However, a strong track record does not eliminate the need for diligent oversight. The government must still ensure that Lockheed Martin delivers the contracted services effectively and efficiently, adhering to the terms of the firm-fixed-price agreement throughout the contract's duration.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 9500 GODWIN DR, LOCATION A, MANASSAS, VA, 20110

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline