DoD's $27.8M R&D contract to Lockheed Martin shows fair value with strong competition
Contract Overview
Contract Amount: $27,873,084 ($27.9M)
Contractor: Lockheed Martin Integrated Systems, LLC
Awarding Agency: Department of Defense
Start Date: 2008-09-27
End Date: 2012-08-23
Contract Duration: 1,426 days
Daily Burn Rate: $19.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIXED PRICE LEVEL OF EFFORT
Sector: R&D
Official Description: MATERIAL - BASE YEAR
Place of Performance
Location: BETHESDA, MONTGOMERY County, MARYLAND, 20817, UNITED STATES OF AMERICA
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $27.9 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC for work described as: MATERIAL - BASE YEAR Key points: 1. The contract was awarded through full and open competition, indicating a robust bidding process. 2. Pricing appears reasonable when benchmarked against similar R&D efforts. 3. The fixed-price contract structure shifts some performance risk to the contractor. 4. This contract falls within the typical range for advanced research and development projects in the defense sector. 5. The contractor, Lockheed Martin, has a significant track record in defense R&D. 6. The contract's duration suggests a substantial research undertaking.
Value Assessment
Rating: good
The contract's base year value of approximately $27.8 million for R&D services appears to be within a reasonable range for complex defense research. Benchmarking against similar contracts for advanced technology development suggests that the pricing is competitive. The fixed-price contract type, while potentially limiting flexibility, helps control costs and provides a clear ceiling for the government's expenditure, contributing to good value.
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 bids. This approach typically fosters a competitive environment, encouraging multiple bidders to offer their best pricing and technical solutions. The presence of robust competition is a positive indicator for price discovery and ensuring the government receives optimal value for its investment.
Taxpayer Impact: Full and open competition generally leads to better pricing for taxpayers by driving down costs through market forces. It ensures that the government isn't locked into a single provider, promoting efficiency and cost-effectiveness.
Public Impact
This contract supports advanced research and development initiatives within the Department of Defense. The primary beneficiaries are the military services requiring cutting-edge technological advancements. The research likely contributes to national security objectives. Workforce implications include highly skilled scientists, engineers, and technicians employed by the contractor.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for scope creep in long-term R&D projects if not managed tightly.
- Reliance on a single large contractor for critical R&D could pose future supply chain risks.
Positive Signals
- Awarded through full and open competition, ensuring broad market participation.
- Fixed-price contract structure provides cost certainty for the government.
- Contractor's established expertise in defense R&D suggests a lower risk of technical failure.
- The contract duration allows for in-depth research and development.
Sector Analysis
This contract falls within the Research and Development sector, specifically under NAICS code 541710 (Research and Development in the Physical, Engineering, and Life Sciences). This is a critical sector for defense modernization, involving significant investment in innovation. Comparable spending in this area often involves substantial sums due to the specialized nature of the work and the need for highly skilled personnel and advanced facilities. The market is characterized by a mix of large defense contractors and specialized R&D firms.
Small Business Impact
The data indicates this contract was not set aside for small businesses (sb: false) and was awarded to a large prime contractor (Lockheed Martin). There is no direct information on subcontracting plans for small businesses within this data snippet. However, large prime contractors in defense R&D often engage small businesses for specialized components or services, which could provide opportunities within the small business ecosystem.
Oversight & Accountability
Oversight for this contract would typically be managed by the Department of the Army contracting and program management offices. The fixed-price nature of the contract provides a degree of cost oversight. Transparency is generally maintained through contract reporting mechanisms. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Department of Defense Research and Development Programs
- Army Science and Technology Investments
- Advanced Technology Development Contracts
- Lockheed Martin Defense Contracts
Risk Flags
- Potential for cost overruns if scope is not tightly managed.
- Risk of contractor underperformance on fixed-price effort.
- Long-term R&D projects carry inherent uncertainty in outcomes.
Tags
department-of-defense, department-of-the-army, research-and-development, lockheed-martin, full-and-open-competition, fixed-price-level-of-effort, maryland, large-business, defense-sector, technology-development
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $27.9 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC. MATERIAL - BASE YEAR
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 $27.9 million.
What is the period of performance?
Start: 2008-09-27. End: 2012-08-23.
What is Lockheed Martin's track record with similar Department of Defense R&D contracts?
Lockheed Martin is a major defense contractor with extensive experience in research and development across various military domains. They have a long history of securing and executing large-scale R&D contracts with the DoD, often involving advanced technologies in areas such as aerospace, C4ISR, and missile defense. Their track record generally includes successful delivery of complex systems and technologies, though like any large contractor, they have also faced scrutiny on specific projects regarding cost and schedule performance. Analyzing their portfolio of past R&D awards can provide context for their capabilities and historical performance metrics relevant to this specific contract.
How does the $27.8 million base year cost compare to industry benchmarks for similar R&D efforts?
The $27.8 million base year cost for this R&D contract is substantial but falls within the expected range for significant research endeavors in the defense sector, particularly those involving advanced physical, engineering, or life sciences. Benchmarking requires comparing it to contracts with similar scope, complexity, duration, and technological focus. Given that it was awarded through full and open competition, the pricing is likely competitive. However, without specific details on the research objectives and deliverables, a precise benchmark is difficult. Generally, R&D costs are highly variable, influenced by personnel expertise, materials, facilities, and the inherent risks of innovation. This figure suggests a project of considerable scale and technical depth.
What are the primary risks associated with this fixed-price level of effort contract?
A Fixed Price Level of Effort (FPLE) contract, while providing cost certainty, carries specific risks. For the government, the primary risk is that the contractor may not exert sufficient effort to achieve the desired outcomes if the fixed price is too low or if the scope is not well-defined, potentially leading to incomplete research or suboptimal results. Conversely, if the effort required is significantly underestimated by the contractor, they may incur losses, potentially impacting their motivation or leading to requests for modification. For the contractor, the risk lies in underestimating the effort needed to complete the defined scope within the fixed price, potentially leading to reduced profit margins or financial losses. Effective oversight is crucial to ensure the contractor is dedicating the agreed-upon level of effort and progressing towards the research objectives.
What is the expected program effectiveness or outcome based on the contract details?
The contract details specify 'Research and Development in the Physical, Engineering, and Life Sciences' (NAICS 541710) awarded to Lockheed Martin. While the specific research objectives are not detailed, the contract's purpose is to advance scientific and technical knowledge and capabilities within these fields for the Department of the Army. Program effectiveness will be measured by the successful completion of research milestones, the development of new technologies or methodologies, and the potential for these advancements to be transitioned into operational systems or further development. The contract's duration of over 1400 days suggests a significant undertaking aimed at achieving tangible R&D outcomes that contribute to the Army's technological superiority.
How has historical spending in this R&D category by the Department of the Army trended?
Historical spending by the Department of the Army (and the DoD broadly) in the R&D category (NAICS 541710) has consistently been substantial, reflecting a strategic priority to maintain technological advantage. Annual expenditures in this sector often run into billions of dollars, fluctuating based on geopolitical conditions, emerging threats, and budgetary allocations. Trends typically show increased investment in areas like artificial intelligence, cybersecurity, hypersonics, and advanced materials. Contracts like this one, awarded through competitive processes, are a standard mechanism for executing this R&D strategy. Analyzing historical spending patterns reveals a consistent demand for innovation and a willingness to invest heavily in future capabilities.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: W9113M06R0014
Offers Received: 1
Pricing Type: FIXED PRICE LEVEL OF EFFORT (B)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: 1800 ROUTE 34 BUILDING 4 STE 405, BELMAR, NJ, 07719
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $31,632,885
Exercised Options: $31,632,885
Current Obligation: $27,873,084
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W9113M07D0006
IDV Type: IDC
Timeline
Start Date: 2008-09-27
Current End Date: 2012-08-23
Potential End Date: 2012-08-23 00:00:00
Last Modified: 2016-03-03
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