DoD awards $12M cost-plus contract to Lockheed Martin for engineering services, raising value concerns
Contract Overview
Contract Amount: $11,971,883 ($12.0M)
Contractor: Lockheed Martin Services, LLC
Awarding Agency: Department of Defense
Start Date: 2006-07-03
End Date: 2007-08-31
Contract Duration: 424 days
Daily Burn Rate: $28.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Official Description: BASE YEAR
Place of Performance
Location: PORT HUENEME CBC BASE, VENTURA County, CALIFORNIA, 93043
Plain-Language Summary
Department of Defense obligated $12.0 million to LOCKHEED MARTIN SERVICES, LLC for work described as: BASE YEAR Key points: 1. Contract awarded to a single, large business, potentially limiting small business participation. 2. Cost-plus award fee structure can incentivize spending, impacting overall value. 3. Engineering services sector sees significant government investment, but oversight is crucial. 4. Lack of competition raises questions about price discovery and taxpayer efficiency.
Value Assessment
Rating: questionable
The contract's cost-plus award fee structure makes it difficult to assess value without detailed performance metrics. The base year cost of $11.97M for engineering services requires further scrutiny against industry benchmarks for similar scope and complexity.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source or limited competition award. This significantly impacts price discovery, as there was no market pressure to drive down costs or ensure the most advantageous pricing for the government.
Taxpayer Impact: The lack of competition and cost-plus structure may lead to higher costs for taxpayers compared to a competitively awarded fixed-price contract.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. The Department of Defense relies on these services, but the contract's structure warrants close monitoring. Future contracts of this nature should explore competitive strategies to ensure better value.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus award fee structure
- Sole-source award
Positive Signals
- Awarded to a known entity (Lockheed Martin)
- Services are essential for the Department of Defense
Sector Analysis
Engineering services are critical for defense projects, encompassing design, analysis, and technical support. Government spending in this sector is substantial, making efficient procurement and value assessment paramount.
Small Business Impact
The contract was awarded to Lockheed Martin Services, LLC, a large business, and there is no indication of small business subcontracting. This award does not appear to support small business participation.
Oversight & Accountability
The 'CA' (Cost-Plus Award Fee) contract type requires robust oversight to ensure performance standards are met and costs are reasonable. The lack of competition necessitates increased vigilance from contracting officers.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Potential for cost overruns
- Lack of competitive pricing pressure
- Limited transparency in cost justification
- Risk of contractor not achieving optimal performance for cost
Tags
engineering-services, department-of-defense, ca, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $12.0 million to LOCKHEED MARTIN SERVICES, LLC. BASE YEAR
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN SERVICES, LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $12.0 million.
What is the period of performance?
Start: 2006-07-03. End: 2007-08-31.
What specific engineering services were procured, and how does the $11.97M base year cost compare to industry standards for similar projects?
The contract specifies engineering services under NAICS code 541330. A detailed breakdown of the services rendered and their associated costs is needed to benchmark against industry standards. Without this granular data, assessing the value for money is challenging, especially given the cost-plus award fee structure which can obscure true costs.
What are the risks associated with a sole-source, cost-plus award fee contract for essential defense engineering services?
The primary risks include inflated costs due to lack of competition and the incentive structure of cost-plus contracts, potentially leading to reduced cost-consciousness. There's also a risk of suboptimal performance if award fees are not tightly tied to measurable, high-value outcomes, impacting overall program effectiveness and taxpayer return.
How can the effectiveness of this contract be measured, given its non-competitive nature and fee structure?
Effectiveness can be measured by evaluating the successful completion of engineering tasks against defined objectives and timelines. Key performance indicators (KPIs) and milestones within the award fee criteria are crucial. Independent technical reviews and post-award analysis of cost efficiency relative to achieved technical outcomes are also vital for assessing effectiveness.
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: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: 2339 ROUTE 70 WEST, FLOOR, CHERRY HILL, NJ, 01
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $11,975,513
Exercised Options: $11,975,513
Current Obligation: $11,971,883
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N6339406D1170
IDV Type: IDC
Timeline
Start Date: 2006-07-03
Current End Date: 2007-08-31
Potential End Date: 2007-08-31 00:00:00
Last Modified: 2010-04-28
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