DoD's $37.3M IT contract with Lockheed Martin shows fair value, but limited competition raises concerns
Contract Overview
Contract Amount: $37,347,244 ($37.3M)
Contractor: Lockheed Martin Integrated Systems, LLC
Awarding Agency: Department of Defense
Start Date: 2005-08-31
End Date: 2010-10-18
Contract Duration: 1,874 days
Daily Burn Rate: $19.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIRM FIXED PRICE
Sector: IT
Place of Performance
Location: BETHESDA, MONTGOMERY County, MARYLAND, 20817
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $37.3 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC for work described as: Key points: 1. Contract awarded under firm-fixed-price terms, indicating predictable costs for the government. 2. The contract was competed, but the number of bidders suggests potential for improved price discovery. 3. Performance period of over 5 years allowed for sustained service delivery. 4. The contract falls within the custom computer programming services NAICS code, a common area for IT spending. 5. No small business set-aside was utilized, potentially limiting opportunities for smaller firms. 6. The contract's value is moderate within the context of large-scale defense IT procurements.
Value Assessment
Rating: fair
The contract's firm-fixed-price structure provided cost certainty. Benchmarking against similar custom computer programming services contracts awarded by the Department of Defense during the 2005-2010 period would be necessary for a precise value-for-money assessment. However, with three bidders, the competition level might not have driven the most aggressive pricing, suggesting potential for slightly higher costs than a more robustly competed contract.
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 offers. However, only three bids were received. While competition existed, a higher number of bidders typically leads to more robust price discovery and potentially lower prices for the government. The limited number of bidders may indicate a specialized service or a market with fewer qualified providers.
Taxpayer Impact: With only three bidders, taxpayers may have paid a premium compared to what could have been achieved in a more competitive environment. This highlights the importance of market research to ensure sufficient interest from potential offerors.
Public Impact
The Department of the Army benefited from custom computer programming services, likely supporting critical defense operations. The services delivered were in the IT sector, contributing to the modernization and efficiency of military systems. The contract's geographic impact is centered in Maryland, where the contractor is located. The contract supported specialized IT roles, potentially impacting the workforce in the defense contracting sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited number of bidders (3) for a full and open competition may indicate suboptimal price competition.
- The contract duration of over 5 years could lead to vendor lock-in if not managed carefully.
- Lack of small business set-aside might exclude smaller, innovative firms from participating.
Positive Signals
- Firm-fixed-price contract provides cost certainty and reduces the government's risk of cost overruns.
- Awarded under full and open competition, ensuring a broad base of potential offerors.
- The contract was awarded to a well-established defense contractor, suggesting a higher likelihood of successful performance.
Sector Analysis
The Information Technology sector, particularly custom computer programming services, is a significant area of federal spending. This contract falls within the broader IT services market, which is characterized by rapid technological advancements and a mix of large prime contractors and specialized small businesses. Federal spending in this area often supports modernization efforts, cybersecurity, and operational efficiency across various agencies. Comparable spending benchmarks would typically be assessed against other custom programming contracts within the Department of Defense or other federal agencies.
Small Business Impact
This contract did not include a small business set-aside. While awarded under full and open competition, the absence of specific provisions for small businesses means that opportunities for subcontracting to small businesses were not mandated by the contract terms. This could limit the direct impact on the small business IT ecosystem unless the prime contractor voluntarily engages small businesses.
Oversight & Accountability
Oversight for this contract would have been managed by the Department of the Army, likely through contracting officers and program managers. Accountability measures would be tied to the firm-fixed-price contract terms, performance metrics, and delivery schedules. Transparency is generally facilitated through contract databases like FPDS, though detailed performance reports are often internal. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Defense Information Technology Contracting
- Custom Software Development Services
- IT Services for Military Operations
- Department of Defense IT Modernization
Risk Flags
- Limited competition despite full and open award
- Potential for price not being fully optimized due to bidder count
Tags
it, defense, department-of-defense, department-of-the-army, custom-computer-programming-services, firm-fixed-price, full-and-open-competition, maryland, large-contract, it-services
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $37.3 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC. See the official description on USAspending.
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 (Department of the Army).
What is the total obligated amount?
The obligated amount is $37.3 million.
What is the period of performance?
Start: 2005-08-31. End: 2010-10-18.
What was Lockheed Martin's track record with the Department of Defense prior to this award?
Prior to August 2005, Lockheed Martin had a long-standing and extensive track record with the Department of Defense, serving as a major defense contractor across various domains including IT, aerospace, and defense systems. The company has historically been involved in numerous large-scale, complex projects for the DoD. Specific performance on prior contracts would be detailed in internal DoD performance assessment reports (e.g., Contractor Performance Assessment Reporting System - CPARS), which are not publicly available in detail. However, their continued presence as a prime contractor indicates a generally satisfactory performance history, though specific issues or commendations on individual contracts would vary.
How does the $37.3 million value compare to similar custom computer programming contracts?
The $37.3 million value for this contract is moderate within the context of large federal IT procurements, especially those awarded by the Department of Defense. Custom computer programming services are a broad category, and contract values can range from a few million to hundreds of millions of dollars. For the period of 2005-2010, this value would be considered typical for a multi-year, specialized IT development or integration project. To provide a precise comparison, one would need to analyze contracts with similar scope, duration, and agency within the same timeframe, looking at average award values and the distribution of contract sizes.
What were the primary risks associated with this contract?
Key risks for this contract would have included technical risks related to the complexity of custom computer programming, potential for scope creep if requirements were not well-defined, and schedule delays. Given the firm-fixed-price nature, cost overruns were primarily the contractor's risk, but delays could still impact government operations. Performance risk, ensuring the delivered software met functional and performance requirements, was also significant. The limited competition (3 bidders) also presented a risk of suboptimal pricing and potentially fewer innovative solutions compared to a more competitive scenario.
How effective was this contract in meeting the Department of the Army's IT needs?
Assessing the effectiveness requires access to internal DoD performance evaluations and program outcomes, which are not publicly detailed. However, the contract's duration (over 5 years) suggests it was intended to fulfill a sustained need for custom programming services. The firm-fixed-price structure incentivized the contractor to deliver within budget. The ultimate effectiveness would depend on how well the developed or integrated systems supported the Army's mission objectives, improved operational efficiency, or enhanced capabilities. Without specific performance data or end-user feedback, a definitive judgment on effectiveness is challenging.
What were historical spending patterns for custom computer programming services by the DoD around 2005?
Leading up to and during 2005, the Department of Defense was a major investor in IT modernization and custom software development. Spending in this area was substantial, driven by the need to integrate disparate systems, develop new command and control capabilities, and enhance battlefield information sharing. Federal IT spending, in general, saw significant increases in the early 2000s. Contracts for custom programming services were common across various branches of the DoD, supporting everything from logistics and personnel management to advanced intelligence and weapons systems. The total federal spending on IT services was in the tens of billions annually during this period.
What is the significance of the NAICS code 541511 for this contract?
NAICS code 541511, 'Custom Computer Programming Services,' signifies that the primary purpose of this contract was the creation of original, custom computer code or the modification of existing code to meet specific client needs. This is distinct from off-the-shelf software sales or general IT support. Contracts under this code often involve software development, system integration requiring custom coding, and application maintenance where significant programming is required. It indicates a focus on bespoke IT solutions tailored to the unique requirements of the Department of the Army, rather than standardized software products.
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: ALTERNATIVE SOURCES
Offers Received: 3
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: 6801 ROCKLEDGE DR, BETHESDA, MD, 08
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $2,850
Exercised Options: $2,850
Current Obligation: $37,347,244
Parent Contract
Parent Award PIID: W91QUZ04D0004
IDV Type: IDC
Timeline
Start Date: 2005-08-31
Current End Date: 2010-10-18
Potential End Date: 2010-10-18 00:00:00
Last Modified: 2014-09-24
More Contracts from Lockheed Martin Integrated Systems, LLC
- 200407!000098!5700!LA01 !11 Cons/Lgcw !FA701204C0003 !A!N! !N! ! !20031121!20130630!836196972!805258373!834951691!n!lockheed Martin Integrated SYS!6801 Rockledge Drive !bethesda !nj!20817!50000!001!11!washington !district of Columbia !D.C. !+000010350876!n!n!000530185344!d399!other Adp&telecommunication Services !S1 !services !000 !* !541690!A!B!3! ! ! ! ! !99990909!b!b!y!b! !a!n!l!2!007!b! !C!Y!F! ! !N!C!N! ! ! !b!z!a!a!000!a!b!n! ! ! !Y! ! !0001! ! — $679.5M (Department of Defense)
- 200611!007847!2100!w15p7t!usa Communications-Electronics !daab0703db009 !A!N! !Y!0243 ! !20060831!20110129!068514251!805258373!834951691!n!lockheed Martin Integrated SYS!1800 Route 34 !wall !nj!07719!76460!025!34!wall (township OF) !monmouth !NEW Jersey!+000077463827!n!n!000000000000!r414!systems Engineering Services !A7 !electronics and Communication Equip !000 !NOT Discernable !541330!E! !5!B!M! !A! !99990909!B! ! !A! !a!n!y!2!014!b! !C!N!Z! ! !N!C!N! ! ! !c!z!a!a!000!a!c!n! ! ! ! ! ! !0001! ! — $448.3M (Department of Defense)
- ISS Cargo Mission Contract (CMC) — $406.2M (National Aeronautics and Space Administration)
- THE Moses II Effort IS a Five-Year Sole-Source Follow-On Contract to Maintain the Health and Safety of the HST Observatory Through the Next Phase of ITS Science Mission. the Scope of This Follow-On Effort Includes Conducting ALL Elements of HST Operations Other Than Science Operations, and to Perform Systems Engineering Tasks Required to Properly Maintain HST Flight and Ground Systems.mission Operations Responsibilities Include Safe and Efficient Control and Utilization of the HST Observatory, Maintenance and Operation of Hst-Unique Facilities and Equipment, AS Well AS Creation, Maintenance, and Utilization of HST Operations Processes and Procedures. Critical Systems Engineering Responsibilities Consist of Optimizing Mission System Capabilities to Maximize HST Operations Effectiveness and Science Productivity. Essential Management Requirements Include Providing a Technical Staff Possessing In-Depth Knowledge of HST S Varied, Complex, and Unique Flight and Ground Systems, Ensuring Successful Accomplishment of the Diverse Tasks Necessary to Effectively Conduct HST Mission Operations and Systems Engineering AS Well AS to Manage and Report Contract Element Cost and Schedule Performance — $360.2M (National Aeronautics and Space Administration)
- Federal Contract — $304.3M (Department of Defense)
View all Lockheed Martin Integrated Systems, LLC federal contracts →
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)