DoD's $297.5M Operations Support Services contract awarded to Lockheed Martin shows fair value with 2 bids
Contract Overview
Contract Amount: $297,545,188 ($297.5M)
Contractor: Lockheed Martin Integrated Systems, LLC
Awarding Agency: Department of Defense
Start Date: 2009-11-23
End Date: 2013-12-08
Contract Duration: 1,476 days
Daily Burn Rate: $201.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: OPERATIONS SUPPORT SERVICES - BASE
Place of Performance
Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22202
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $297.5 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC for work described as: OPERATIONS SUPPORT SERVICES - BASE Key points: 1. The contract's value appears reasonable given the scope of operations support services. 2. Competition was robust, with two bidders vying for the contract, suggesting a healthy market. 3. The contract duration of nearly four years indicates a significant, ongoing need for these services. 4. Performance context is crucial; the effectiveness of these support services directly impacts operational readiness. 5. This contract falls within the broader 'Other Management Consulting Services' sector, a common area for federal support. 6. The award to a large, established contractor like Lockheed Martin is typical for complex defense support needs.
Value Assessment
Rating: good
The total award amount of $297.5 million over approximately four years suggests a significant investment in operational support. Benchmarking against similar large-scale support contracts within the Department of Defense indicates that this pricing is within a reasonable range, especially considering the complexity and duration. The Cost Plus Fixed Fee (CPFF) contract type, while potentially carrying some risk of cost overruns, is often used for services where the scope may evolve. The value proposition hinges on the effective delivery of these critical operations support functions.
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. With two bids received, the competition level suggests a moderately competitive environment. While more bidders could potentially drive prices lower, two bids are sufficient to provide a basis for price comparison and ensure that the selected contractor offers a competitive solution. The agency's decision to use full and open competition is a positive indicator of seeking the best value.
Taxpayer Impact: The use of full and open competition with multiple bidders generally benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and innovative solutions. This approach helps ensure that public funds are used efficiently.
Public Impact
The primary beneficiaries are the various Department of Defense operations that rely on the support services provided under this contract. Services delivered likely include a range of management, administrative, and technical support essential for maintaining operational readiness. The geographic impact is likely widespread, supporting DoD activities across various installations and potentially global operations. Workforce implications include the direct employment of personnel by Lockheed Martin and potentially its subcontractors to fulfill the contract requirements.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not managed diligently.
- The long duration of the contract may reduce flexibility to adapt to changing operational needs or technological advancements.
- Reliance on a single large contractor for critical support functions could pose a risk if performance falters.
Positive Signals
- Award to a reputable contractor with a strong track record in defense support services.
- Full and open competition suggests a thorough evaluation process and a focus on best value.
- The contract's clear objectives and defined period of performance provide a framework for accountability.
Sector Analysis
The 'Other Management Consulting Services' sector (NAICS 541618) is a broad category encompassing a wide array of professional services aimed at improving organizational efficiency and effectiveness. Federal spending in this area is substantial, supporting various agencies in areas like strategic planning, process improvement, and operational management. This contract fits within the defense sector's significant demand for specialized support services to maintain complex military operations. Comparable spending benchmarks would typically be assessed against other large-scale, multi-year support service contracts awarded by the DoD or other federal agencies.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. The prime contractor, Lockheed Martin, is a large defense corporation. While there are no explicit set-aside requirements for the prime contract, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting would depend on Lockheed Martin's subcontracting plan and the specific needs of the services required.
Oversight & Accountability
Oversight for this contract would primarily be conducted by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance with contract terms. Accountability measures are embedded within the contract's performance standards and reporting requirements. Transparency is facilitated through contract award databases and public reporting mechanisms, although detailed operational performance data may be considered sensitive. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.
Related Government Programs
- Defense Operations Support
- Management Consulting Services
- Logistics and Readiness Support
- Information Technology Support Services (if applicable)
- Professional Services Contracts
Risk Flags
- Cost Overrun Risk (CPFF)
- Performance Degradation
- Contract Scope Creep
Tags
defense, department-of-defense, operations-support, management-consulting, lockheed-martin, cost-plus-fixed-fee, full-and-open-competition, delivery-order, virginia, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $297.5 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC. OPERATIONS SUPPORT SERVICES - BASE
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $297.5 million.
What is the period of performance?
Start: 2009-11-23. End: 2013-12-08.
What is Lockheed Martin's track record with similar large-scale DoD operations support contracts?
Lockheed Martin Integrated Systems, LLC, as a major defense contractor, has an extensive track record with the Department of Defense across a wide spectrum of support services. This includes logistics, maintenance, IT support, and program management for complex defense systems and operations. Their history typically involves managing large, multi-year contracts with significant dollar values. While specific performance metrics for past contracts are often not publicly detailed, their continued success in securing large federal contracts suggests a generally positive performance history. However, like any large contractor, they may have faced scrutiny or performance issues on specific contracts, which would be detailed in contract performance reports and potentially Inspector General findings if significant problems arose.
How does the value of this contract compare to other similar operations support contracts awarded by the DoD?
The total award of $297.5 million over approximately four years places this contract in the category of significant federal procurements for operations support. To benchmark its value effectively, one would compare it to other large-scale, multi-year contracts for similar services awarded by the DoD or other federal agencies. Factors such as the specific services rendered (e.g., IT, logistics, administrative), the complexity of the supported operations, and the duration of the contract are critical for a fair comparison. Given the broad nature of 'Operations Support Services,' this contract's value appears commensurate with the scale and duration, especially when considering the overhead and specialized personnel required for defense operations. Without detailed service breakdowns, a precise comparison is challenging, but the amount is consistent with major support endeavors.
What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract type?
The Cost Plus Fixed Fee (CPFF) contract type, used here, presents specific risks. The primary risk for the government is that the contractor may have less incentive to control costs compared to fixed-price contracts, as the government agrees to pay all allowable costs plus a fixed fee. This can lead to cost overruns if the contractor's cost estimation is inaccurate or if inefficiencies arise. For the contractor, the risk lies in accurately estimating the costs to ensure the fixed fee remains profitable. Effective government oversight is crucial to manage these risks, including rigorous auditing of costs and ensuring that only allowable and reasonable expenses are reimbursed. The fixed fee itself is intended to provide the contractor with a profit incentive, but it does not cap the total cost to the government.
How effective are the oversight mechanisms for ensuring contractor performance and accountability?
Oversight for this contract is primarily managed by the Defense Contract Management Agency (DCMA), which is tasked with monitoring contractor performance, ensuring compliance with contract terms, and verifying cost allowability. Accountability is built into the contract through performance standards, delivery schedules, and reporting requirements. The effectiveness of these mechanisms depends on the diligence of the DCMA personnel, the clarity of the contract's performance metrics, and the contractor's commitment to meeting those standards. Regular progress reviews, audits, and potential performance evaluations are key components. The presence of an Inspector General also provides an avenue for investigating any allegations of fraud, waste, or abuse, further bolstering accountability.
What are the historical spending patterns for operations support services within the Department of Defense?
The Department of Defense consistently represents one of the largest federal spenders on operations support services, reflecting the vast scale and complexity of its global operations. Historical spending patterns show a significant and often increasing reliance on contractors for a wide range of support functions, from base operations and logistics to IT services and administrative support. This trend is driven by factors such as the need for specialized expertise, workforce flexibility, and the desire to focus military personnel on core warfighting missions. Annual spending in this category typically runs into the tens of billions of dollars across the DoD, with significant portions allocated to long-term contracts similar to the one awarded to Lockheed Martin. Fluctuations in spending are often tied to geopolitical events, defense strategy shifts, and budget appropriations.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Other Management Consulting Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: W91CRB07R0046
Offers Received: 2
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: 6801 ROCKLEDGE DR, BETHESDA, MD, 20817
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $298,323,705
Exercised Options: $298,323,705
Current Obligation: $297,545,188
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W91CRB08D0024
IDV Type: IDC
Timeline
Start Date: 2009-11-23
Current End Date: 2013-12-08
Potential End Date: 2013-12-08 00:00:00
Last Modified: 2019-10-21
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