DoD's $576M IT services contract to Lockheed Martin shows strong competition and long-term performance
Contract Overview
Contract Amount: $57,626,728 ($57.6M)
Contractor: Lockheed Martin Integrated Systems, LLC
Awarding Agency: Department of Defense
Start Date: 2006-03-24
End Date: 2011-03-31
Contract Duration: 1,833 days
Daily Burn Rate: $31.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 11
Pricing Type: TIME AND MATERIALS
Sector: IT
Official Description: 200606!600861!2100!W91QUZ!ACA, ITEC4 !W91QUZ04D0004 !A!N! !Y!0006 ! !20060324!20070331!836196972!805258373!834951691!N!LOCKHEED MARTIN INTEGRATED SYS!6801 ROCKLEDGE DRIVE !BETHESDA !MD!20817!07125!031!24!BETHESDA !MONTGOMERY !MARYLAND !+000000450000!N!N!000000000000!D301!ADP FACILITY OPERATION & MAINTENANCE SERVICES !S1 !SERVICES !000 !NOT DISCERNABLE !517110!E! !5!B!M! !A! !99990909!B!E!Y!A! !A!U!Y!2!011!B! !Z!N!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!D!N! ! ! ! !2100!W902FY!0001! !
Place of Performance
Location: BETHESDA, MONTGOMERY County, MARYLAND, 20817, UNITED STATES OF AMERICA
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $57.6 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC for work described as: 200606!600861!2100!W91QUZ!ACA, ITEC4 !W91QUZ04D0004 !A!N! !Y!0006 ! !20060324!20070331!836196972!805258373!834951691!N!LOCKHEED MARTIN INTEGRATED SYS!6801 ROCKLEDGE DRIVE !BETHESDA !MD!20817!07125!031!24!BETHESDA !MONT… Key points: 1. This contract represents a significant investment in IT facility operations and maintenance. 2. The extensive duration suggests a need for stable, long-term support for critical infrastructure. 3. The award was made under full and open competition, indicating a robust bidding process. 4. Lockheed Martin's extensive experience likely contributed to their successful bid. 5. The contract's value places it among substantial IT service procurements within the DoD. 6. Performance metrics and potential risks were likely key considerations in the award.
Value Assessment
Rating: good
The total value of $576.27 million over approximately 6 years (2006-2011) for ADP Facility Operation & Maintenance Services is substantial. Benchmarking this against similar large-scale IT operations and maintenance contracts within the Department of Defense is crucial. While specific per-unit costs are not provided, the duration and scope suggest a complex service delivery model. The contract was awarded to Lockheed Martin Integrated Systems, a major defense contractor with a proven track record, implying a level of confidence in their ability to deliver.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'Full and Open Competition,' indicating that all responsible sources were permitted to submit a bid. The presence of 11 bids suggests a healthy level of competition for this significant IT services contract. This broad competition is generally favorable for price discovery and ensures the government receives offers from a wide range of qualified vendors, potentially leading to better value.
Taxpayer Impact: A competitive bidding process like this one helps ensure taxpayer dollars are used efficiently by driving down prices and encouraging innovation among bidders.
Public Impact
The primary beneficiaries are the Department of Defense and the Department of the Army, receiving essential IT facility operations and maintenance services. This contract supports critical IT infrastructure, ensuring the smooth functioning of military operations and administrative tasks. The services are geographically focused within Maryland, specifically Bethesda, where Lockheed Martin's facilities are located. The contract likely supported a significant number of jobs within Lockheed Martin's IT services division, contributing to the tech workforce.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (over 6 years) can sometimes lead to scope creep or evolving requirements that may not be fully captured in the initial pricing.
- Reliance on a single large contractor for critical IT infrastructure operations carries inherent risks if performance falters or if the contractor faces financial instability.
- The 'Time and Materials' contract type, while flexible, can sometimes lead to higher costs if not managed closely compared to fixed-price contracts.
Positive Signals
- Awarded under full and open competition with 11 bidders, indicating a strong market response and competitive pricing.
- Contractor is a well-established entity (Lockheed Martin) with extensive experience in large-scale IT services.
- The contract duration suggests a stable, long-term requirement, allowing for efficient resource planning and potentially economies of scale.
- The contract was awarded to a prime contractor, implying potential for subcontracting opportunities for smaller businesses.
Sector Analysis
This contract falls within the Information Technology sector, specifically focusing on IT facility operations and maintenance. The market for such services is vast, encompassing government and commercial entities requiring robust IT infrastructure support. Comparable spending benchmarks would involve analyzing other large-scale IT service contracts awarded by federal agencies, particularly within the Department of Defense, for similar operational support functions. The size of this contract ($576M) indicates it's a significant procurement within this sub-sector.
Small Business Impact
The data indicates this contract was not specifically set aside for small businesses (sb: false). While there's no explicit mention of small business subcontracting goals in the provided data, large prime contractors like Lockheed Martin often engage small businesses for specialized services. The impact on the small business ecosystem would depend on the extent of subcontracting opportunities created by this contract.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and administrative contracting officer within the Department of the Army. Performance monitoring, quality assurance surveillance plans, and regular reviews are standard oversight mechanisms. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- DoD IT Modernization Programs
- Army Enterprise IT Services
- Cloud Computing Services Contracts
- Cybersecurity Support Contracts
- IT Infrastructure Management Services
Risk Flags
- Long-term contract duration may increase risk of cost overruns if scope is not managed.
- Time and Materials contract type requires diligent oversight to control costs.
- Reliance on a single large contractor for critical infrastructure can pose risks.
- Technological obsolescence is a potential challenge over the contract's lifespan.
Tags
dod, department-of-the-army, it-services, facility-operations, maintenance, lockheed-martin, full-and-open-competition, time-and-materials, maryland, large-contract, it-infrastructure, custom-computer-programming-services
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $57.6 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC. 200606!600861!2100!W91QUZ!ACA, ITEC4 !W91QUZ04D0004 !A!N! !Y!0006 ! !20060324!20070331!836196972!805258373!834951691!N!LOCKHEED MARTIN INTEGRATED SYS!6801 ROCKLEDGE DRIVE !BETHESDA !MD!20817!07125!031!24!BETHESDA !MONTGOMERY !MARYLAND !+000000450000!N!N!000000000000!D301!ADP FACILITY OPERATION & MAINTENANCE SERVICES !S1 !SERVICES !000 !NOT DISCERNABLE !517110!E! !5!B!M! !A! !999
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 $57.6 million.
What is the period of performance?
Start: 2006-03-24. End: 2011-03-31.
What is Lockheed Martin's track record with similar large-scale IT operations and maintenance contracts for the DoD?
Lockheed Martin Integrated Systems, the contractor, has a long and extensive history of providing complex IT services and solutions to the Department of Defense and other federal agencies. They are a major defense contractor known for managing large, mission-critical systems. Their track record includes significant work in areas such as command and control systems, intelligence, surveillance, and reconnaissance (ISR) IT support, and enterprise IT infrastructure management. For ADP Facility Operation & Maintenance Services specifically, their experience would likely encompass managing data centers, network infrastructure, cybersecurity operations, and ensuring the availability and reliability of critical IT systems. The substantial value and duration of this particular contract suggest that the DoD had confidence in Lockheed Martin's demonstrated capabilities and past performance in delivering similar services effectively and reliably.
How does the $576 million value compare to other IT operations and maintenance contracts within the DoD during that period?
A contract valued at $576 million over approximately six years (2006-2011) for IT operations and maintenance services was a significant procurement within the Department of Defense during that timeframe. While precise comparative data requires deep dives into historical contract databases, large-scale IT service contracts for infrastructure management, facility operations, and system maintenance frequently reached hundreds of millions of dollars. The DoD's reliance on complex IT systems for all aspects of its operations necessitates substantial and ongoing investment. Contracts of this magnitude were not uncommon for major system integrators like Lockheed Martin, especially when covering comprehensive support for critical facilities and infrastructure across multiple years. It indicates a substantial commitment to maintaining the backbone of the Army's IT capabilities.
What were the primary risks associated with a contract of this nature and duration?
Several risks are inherent in a large, long-duration IT operations and maintenance contract like this one. Firstly, technological obsolescence is a significant concern; IT systems and infrastructure can become outdated rapidly, requiring continuous adaptation and upgrades, which might not be fully accounted for in the initial contract scope or pricing. Secondly, performance degradation is a risk; maintaining consistent high-level performance over six years for critical facilities is challenging and requires robust oversight and contractor accountability. Thirdly, security vulnerabilities are a constant threat in IT systems, and any lapse could have severe consequences for national security. Fourthly, contractor dependency creates a risk; the government can become overly reliant on a single provider, making transitions difficult and potentially reducing leverage. Finally, cost overruns, particularly with Time and Materials (T&M) contract types, are a risk if not managed diligently through strong oversight and change control processes.
What does the 'ADP Facility Operation & Maintenance Services' entail in practical terms?
ADP Facility Operation & Maintenance Services refers to the comprehensive management and upkeep of the data centers and related IT infrastructure that support the Army's administrative and operational data processing needs. This includes ensuring the physical security and environmental controls (power, cooling, fire suppression) of data center facilities, maintaining the hardware (servers, storage, networking equipment), managing operating systems and core software, ensuring network connectivity, and providing technical support for the systems. It also encompasses routine maintenance, patching, upgrades, disaster recovery planning and execution, and ensuring the overall availability, reliability, and performance of the IT environment. Essentially, it's about keeping the lights on and the systems running smoothly for the digital backbone of Army operations.
How did the 'Full and Open Competition' with 11 bidders likely influence the final contract price?
The 'Full and Open Competition' with 11 bidders is a strong indicator that the final contract price was likely influenced positively for the government. A larger number of bidders generally leads to more competitive proposals, as companies vie to win the contract by offering attractive pricing and technical solutions. This increased competition puts downward pressure on prices. Furthermore, it allows the government to select from a wider pool of qualified vendors, increasing the likelihood of finding the best value. The presence of 11 bids suggests that the market was robust and that Lockheed Martin likely had to offer a competitive price, relative to its capabilities and the scope of work, to win the award against numerous other interested parties.
What is the significance of the 'Time and Materials' (T&M) contract type in this context?
The 'Time and Materials' (T&M) contract type, used for this $576M award, is a flexible but potentially costly option. It means the government pays the contractor based on the actual labor hours expended (at pre-negotiated hourly rates) and the actual cost of materials used. This type of contract is often used when the scope of work is not clearly defined or is expected to evolve significantly, making fixed-price contracts impractical. For ADP Facility Operation & Maintenance Services, T&M could be beneficial for addressing unforeseen issues, emergent requirements, or performing upgrades where precise effort is hard to estimate upfront. However, it places a greater burden on the government's contracting officers to closely monitor labor hours, material costs, and overall effort to prevent cost overruns and ensure fair pricing. Robust oversight is critical to mitigate the inherent risks of T&M contracts.
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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 11
Pricing Type: TIME AND MATERIALS (Y)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: 6801 ROCKLEDGE DR, BETHESDA, MD, 20817
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $47,144,589
Exercised Options: $50,485,344
Current Obligation: $57,626,728
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W91QUZ04D0004
IDV Type: IDC
Timeline
Start Date: 2006-03-24
Current End Date: 2011-03-31
Potential End Date: 2011-03-31 00:00:00
Last Modified: 2015-05-28
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