DoD's $95M IT contract to Lockheed Martin for custom programming services awarded via full and open competition

Contract Overview

Contract Amount: $95,027,604 ($95.0M)

Contractor: Lockheed Martin Services, LLC

Awarding Agency: Department of Defense

Start Date: 2008-04-03

End Date: 2013-06-30

Contract Duration: 1,914 days

Daily Burn Rate: $49.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: PSDT-SP

Place of Performance

Location: RANDOLPH AFB, BEXAR County, TEXAS, 78150

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $95.0 million to LOCKHEED MARTIN SERVICES, LLC for work described as: PSDT-SP Key points: 1. Contract value represents a significant investment in IT services for the Air Force. 2. Awarded through full and open competition, suggesting a robust market for these services. 3. The fixed-price contract type aims to control costs and manage contractor risk. 4. Duration of nearly 5 years indicates a long-term need for these specialized programming services. 5. The contract falls under custom computer programming, a critical area for defense operations. 6. The specific NAICS code (541511) points to a focus on software development and IT integration.

Value Assessment

Rating: good

The contract's value of approximately $95 million over five years suggests a substantial investment. Benchmarking this against similar custom computer programming contracts within the Department of Defense is crucial for a precise value-for-money assessment. The firm fixed-price structure generally indicates a commitment to cost control, but the actual value is realized through the successful delivery of services and the absence of cost overruns. Without specific performance metrics or comparable contract data, a definitive value assessment is challenging, but the competitive award process is a positive indicator.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 5 bids suggests a healthy level of competition for this requirement. A competitive process like this typically drives prices down and encourages innovation as contractors vie for the award. The number of bidders provides a reasonable basis for price discovery and ensures the government receives offers from multiple qualified providers.

Taxpayer Impact: Taxpayers benefit from a competitive award process through potentially lower prices and better service quality due to contractor rivalry. This ensures that public funds are used efficiently by leveraging market forces to secure the best possible value.

Public Impact

The Department of the Air Force is the primary beneficiary, receiving custom computer programming services. These services are critical for supporting various defense operations and IT infrastructure. The contract's impact is likely concentrated within the IT and defense sectors, potentially involving specialized software engineers and developers. Workforce implications may include the employment of skilled IT professionals by the contractor and potentially by the government for oversight.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if requirements are not clearly defined and managed.
Dependence on a single large contractor for critical IT services could pose a risk.
Ensuring continued relevance and adaptability of custom software to evolving defense needs.

Positive Signals

Awarded through full and open competition, indicating a competitive market.
Firm fixed-price contract type helps manage cost certainty.
Long contract duration suggests a stable, ongoing requirement for these services.

Sector Analysis

The custom computer programming services sector is a vital component of the IT industry, supporting government and commercial entities with specialized software development, integration, and maintenance. This contract, valued at approximately $95 million, falls within a segment of the IT market that is essential for national security and operational efficiency. Comparable spending benchmarks in this sector often vary widely based on complexity, duration, and the specific technologies involved. The Department of Defense is a significant consumer of such services, frequently awarding large contracts to support its vast and complex technological infrastructure.

Small Business Impact

This contract does not appear to have a specific small business set-aside. The award to Lockheed Martin Services, LLC, a large defense contractor, suggests that subcontracting opportunities may arise for small businesses within the IT and software development ecosystem. The extent to which small businesses will participate depends on Lockheed Martin's subcontracting plan and the specific needs of the project. Without explicit set-aside provisions, the direct impact on small business prime contracting is limited.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program management office within the Department of the Air Force. Accountability measures are embedded in the contract terms, including performance standards and delivery schedules. Transparency is facilitated through contract award databases and reporting requirements. Inspector General jurisdiction may apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Information Systems Agency (DISA) IT Contracts
Air Force Enterprise IT Services
Custom Software Development Contracts
Federal Civilian IT Services
Department of Defense IT Modernization Programs

Risk Flags

Potential for cost overruns if scope is not well-defined.
Risk of technology obsolescence over the contract's 5-year term.
Dependence on contractor's ability to attract and retain skilled personnel.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $95.0 million to LOCKHEED MARTIN SERVICES, LLC. PSDT-SP

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 Air Force).

What is the total obligated amount?

The obligated amount is $95.0 million.

What is the period of performance?

Start: 2008-04-03. End: 2013-06-30.

What is Lockheed Martin Services, LLC's track record with similar custom computer programming contracts for the Department of Defense?

Lockheed Martin Services, LLC, as a major defense contractor, has a extensive history of performing IT and software development services for the Department of Defense. Their track record typically includes large-scale system integration, software engineering, and sustainment contracts across various military branches. Analyzing past performance on similar firm-fixed-price, full-and-open competition contracts would reveal their ability to deliver within budget and schedule, manage complex technical requirements, and meet performance standards. Specific contract databases and performance reports (if publicly available) would provide detailed insights into their success rates, any past issues, and their overall reliability in executing complex programming services for defense clients.

How does the $95 million value of this contract compare to other custom computer programming services awarded by the Air Force in the last five years?

The $95 million contract value for custom computer programming services awarded to Lockheed Martin is a substantial figure, indicative of a significant IT requirement. To benchmark its value, one would compare it against similar contracts awarded by the Air Force for NAICS code 541511 (Custom Computer Programming Services) over the past five years. If the average contract value for similar scope and duration falls within a similar range, it suggests the pricing is market-aligned. Conversely, if this contract is an outlier, it warrants further investigation into the specific services, complexity, and duration. Data from sources like FPDS or specialized contract databases would be essential for this comparative analysis, looking at factors like the number of bidders and contract type.

What are the primary risks associated with a nearly five-year firm-fixed-price contract for custom computer programming?

A primary risk with a long-term, firm-fixed-price contract for custom computer programming is the potential for the contractor to underbid or for requirements to evolve significantly over the contract's lifespan. If the initial cost estimates are inaccurate or if unforeseen technical challenges arise, Lockheed Martin could face reduced profit margins or even losses. Conversely, if the government's needs change substantially, adapting the software to new requirements under a fixed-price structure can be complex and may lead to change orders or disputes. Ensuring robust change management processes and clear initial scope definition are critical to mitigating these risks for both parties.

How effective is the 'full and open competition' approach in ensuring optimal value for taxpayer money in this specific IT contract?

The 'full and open competition' approach is generally considered the most effective method for ensuring optimal value for taxpayer money in IT contracts. By allowing all responsible sources to bid, it fosters a competitive environment that drives down prices and encourages innovation. For this $95 million contract, the fact that five bids were received indicates a healthy market and provides a strong basis for price discovery. This competition likely pressured bidders to offer their best pricing and technical solutions, increasing the likelihood that the Air Force secured a cost-effective and high-quality service. The alternative, such as sole-source or limited competition, typically results in higher prices and less incentive for efficiency.

What are the historical spending patterns for custom computer programming services by the Department of the Air Force, and how does this contract fit within them?

The Department of the Air Force historically spends billions of dollars annually on IT services, including custom computer programming. Spending patterns are often driven by modernization efforts, cybersecurity needs, and the sustainment of existing systems. This $95 million contract fits within these patterns as a significant, but not necessarily unprecedented, investment in specialized software development. Analyzing historical data would reveal trends in contract values, types of services procured, and the primary contractors. This contract's duration and value suggest it aligns with the Air Force's ongoing commitment to maintaining and enhancing its technological capabilities through tailored software solutions.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming 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: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 700 N FREDERICK AVE, GAITHERSBURG, MD, 20879

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $303,041,137

Exercised Options: $180,440,659

Current Obligation: $95,027,604

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA873408D0003

IDV Type: IDC

Timeline