DoD's $136M contract for systems engineering services awarded to Lockheed Martin Integrated Systems, with a 7-year period of performance
Contract Overview
Contract Amount: $136,447,079 ($136.4M)
Contractor: Lockheed Martin Integrated Systems, LLC
Awarding Agency: Department of Defense
Start Date: 2003-07-18
End Date: 2010-07-28
Contract Duration: 2,567 days
Daily Burn Rate: $53.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 14
Pricing Type: TIME AND MATERIALS
Sector: R&D
Official Description: 200312!005735!2100!AB07 !USA COMMUNICATIONS-ELECTRONICS !DAAB0703DB009 !A!N! !Y!0026 !20030718!20070130!068514251!805258373!834951691!N!LOCKHEED MARTIN INTEGRATED SYS!106 APPLE ST SUITE 202 !TINTON FALLS !NJ!07724!73020!025!34!TINTON FALLS !MONMOUTH !NEW JERSEY!+000024379345!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A7 !ELECTRONICS AND COMMUNICATION !1000!NOT DISCERNABLE OR CLASSIFIED !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! !
Place of Performance
Location: WALL TOWNSHIP, MONMOUTH County, NEW JERSEY, 07719, UNITED STATES OF AMERICA
Plain-Language Summary
Department of Defense obligated $136.4 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC for work described as: 200312!005735!2100!AB07 !USA COMMUNICATIONS-ELECTRONICS !DAAB0703DB009 !A!N! !Y!0026 !20030718!20070130!068514251!805258373!834951691!N!LOCKHEED MARTIN INTEGRATED SYS!106 APPLE ST SUITE 202 !TINTON FALLS !NJ!07724!73020!025!34!TINTON FALLS !MONMO… Key points: 1. The contract value of $136.4 million over seven years suggests a significant investment in specialized engineering expertise. 2. Awarded through full and open competition, indicating a potentially competitive bidding process for this service. 3. The contract's duration and value may signal a need for long-term, complex support, potentially involving high-risk elements. 4. Systems Engineering Services (R414) are critical for integrating complex systems, suggesting this contract supports a major defense program. 5. The contractor, Lockheed Martin, is a major defense industry player, implying a strong track record in similar large-scale contracts. 6. The contract was awarded under a Time and Materials pricing structure, which can sometimes lead to cost overruns if not closely managed.
Value Assessment
Rating: fair
The total contract value of $136.4 million over approximately seven years averages to about $19.5 million annually. This figure needs to be benchmarked against similar systems engineering support contracts for large defense programs. Without specific comparable data, it's difficult to definitively assess value for money. The Time and Materials (T&M) pricing structure, while flexible, carries inherent risks of cost escalation if not meticulously monitored and controlled by the government.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'full and open competition,' suggesting that all responsible sources were permitted to submit a bid. The data indicates 14 bids were received, which points to a healthy level of competition for this requirement. A higher number of bidders generally allows for better price discovery and can lead to more favorable terms for the government.
Taxpayer Impact: The robust competition suggests that taxpayer dollars were likely used efficiently, as multiple companies vied to provide the best value. This competitive environment helps ensure that the selected contractor offers a fair price for the critical systems engineering services required.
Public Impact
The primary beneficiaries are likely the Department of Defense, specifically the Army, which receives essential systems engineering support to manage complex technological programs. The services delivered are crucial for the design, integration, and lifecycle management of advanced defense systems. The geographic impact is primarily within the United States, supporting defense operations and potentially involving personnel at various DoD facilities. Workforce implications include the employment of highly skilled systems engineers and technical professionals by Lockheed Martin and potentially its subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Time and Materials (T&M) contract type can lead to cost overruns if not managed tightly, as it reimburses actual labor and material costs plus a fee.
- The long performance period (7 years) increases the risk of scope creep or evolving requirements that may not be optimally priced initially.
- Reliance on a single large contractor for critical systems engineering could pose a risk if performance issues arise or if the contractor's priorities shift.
Positive Signals
- Awarded through full and open competition with 14 bids, indicating a strong market response and potential for competitive pricing.
- Lockheed Martin is a well-established defense contractor with extensive experience in systems engineering, suggesting a high likelihood of successful performance.
- The contract supports critical defense systems, aligning with national security objectives and potentially driving innovation in defense technology.
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on Systems Engineering Services (NAICS 541710). This sector is characterized by high technical complexity and significant government investment, particularly in defense. The market size for defense-related systems engineering is substantial, driven by the continuous need to modernize and integrate sophisticated military platforms and technologies. This contract represents a portion of the broader spending on defense R&D and technical support services.
Small Business Impact
The data indicates this contract was not set aside for small businesses (SB is false) and there is no explicit mention of subcontracting goals for small businesses. Given the nature of systems engineering services for a major defense contractor like Lockheed Martin, it's possible that smaller, specialized firms could be engaged as subcontractors, but this contract does not appear to have a direct small business set-aside component.
Oversight & Accountability
Oversight for this contract would primarily reside with the Department of the Army contracting and program management offices. The Time and Materials nature of the contract necessitates rigorous oversight of labor hours, material costs, and adherence to the Statement of Work. Transparency is generally maintained through contract reporting requirements, though specific details of ongoing oversight activities are not publicly detailed. Inspector General (IG) jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Department of Defense Research and Development Contracts
- Systems Engineering and Technical Assistance (SETA) Contracts
- Lockheed Martin Defense Contracts
- Army Information Technology and Engineering Support
- Time and Materials Contract Vehicles
Risk Flags
- Time and Materials Pricing Structure
- Long Contract Duration
- Potential for Cost Overruns
- Reliance on Single Large Contractor
Tags
department-of-defense, department-of-the-army, systems-engineering-services, lockheed-martin, time-and-materials, full-and-open-competition, research-and-development, large-contract, defense-sector, new-jersey, usa-communications-electronics, daab0703db009
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $136.4 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC. 200312!005735!2100!AB07 !USA COMMUNICATIONS-ELECTRONICS !DAAB0703DB009 !A!N! !Y!0026 !20030718!20070130!068514251!805258373!834951691!N!LOCKHEED MARTIN INTEGRATED SYS!106 APPLE ST SUITE 202 !TINTON FALLS !NJ!07724!73020!025!34!TINTON FALLS !MONMOUTH !NEW JERSEY!+000024379345!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A7 !ELECTRONICS AND COMMUNICATION !1000!NOT DISCERNABLE OR CLASSIFIED !541330!E! !5!B!M! !A! !99990909!B
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 $136.4 million.
What is the period of performance?
Start: 2003-07-18. End: 2010-07-28.
What is Lockheed Martin's track record with similar large-scale systems engineering contracts for the Department of Defense?
Lockheed Martin is one of the largest defense contractors globally and has a long history of performing complex systems engineering and integration work for the DoD across various platforms, including aircraft, missiles, and C4ISR systems. They have consistently been awarded major contracts requiring extensive engineering expertise. While specific performance metrics for past contracts are not detailed here, their sustained position as a prime contractor suggests a generally positive track record in delivering on large, complex defense programs. However, like any large contractor, they have faced scrutiny and challenges on specific projects over the years, necessitating ongoing government oversight.
How does the $19.5 million annual average cost compare to industry benchmarks for similar systems engineering services?
Benchmarking the $19.5 million annual average cost requires detailed comparison with similar contracts for systems engineering services within the defense sector. Factors such as the specific technical complexity, security requirements, labor categories involved, and the duration of the contract significantly influence pricing. Generally, specialized engineering support for major defense programs commands premium rates due to the high skill levels required and the critical nature of the work. Without access to proprietary benchmarking data or a direct comparison to contracts with identical scopes and complexities, it is challenging to definitively state whether this rate represents excellent, fair, or questionable value. However, given Lockheed Martin's expertise and the contract's scope, the annual figure appears within a plausible range for large-scale defense engineering support.
What are the primary risks associated with the Time and Materials (T&M) pricing structure for this contract?
The primary risk of a Time and Materials (T&M) contract is the potential for cost overruns. Unlike fixed-price contracts, T&M contracts reimburse the contractor for the actual cost of labor and materials, plus a fixed fee or hourly rate. If the government's oversight is insufficient, or if the scope of work is not clearly defined and managed, the contractor may incur higher labor hours or material costs than anticipated, leading to the total contract value exceeding initial estimates. This necessitates robust government monitoring of timesheets, resource utilization, and justification for all expenditures to ensure efficiency and prevent waste.
How effective is the 'full and open competition' with 14 bidders likely to be in ensuring optimal value for taxpayers?
The 'full and open competition' with 14 bidders is a strong indicator of potential value for taxpayers. A larger pool of bidders typically fosters a more competitive environment, driving down prices and encouraging innovation as companies strive to win the contract. This level of competition suggests that the government had multiple viable options, increasing the likelihood that the selected proposal offered the best combination of technical capability and cost-effectiveness. The government's evaluation process would then be crucial in ensuring that the lowest price technically acceptable or best value proposal was indeed chosen, maximizing the return on taxpayer investment.
What are the potential long-term implications of a 7-year contract for systems engineering services?
A 7-year contract for systems engineering services implies a long-term need for sustained technical support, potentially for a major defense system's lifecycle. This can provide stability for both the government program and the contractor. For the government, it ensures continuity of expertise and reduces the administrative burden of frequent re-competitions. For the contractor, it offers predictable revenue and the opportunity to build deep institutional knowledge. However, it also carries risks, such as potential vendor lock-in, reduced flexibility to adapt to rapidly changing technologies, and the possibility that initial pricing may not remain optimal throughout the entire period if market conditions or program requirements shift significantly.
Are there any indications of potential performance issues or contractor deficiencies in Lockheed Martin's history related to similar contracts?
The provided data does not contain specific details regarding performance issues or contractor deficiencies for Lockheed Martin on this particular contract or directly comparable ones. Publicly available information on large defense contracts often includes past performance evaluations, but these are typically not detailed in summary data feeds like the one provided. While Lockheed Martin, as a major contractor, has undoubtedly faced performance challenges on various programs throughout its history, the award of this significant contract suggests that its past performance was deemed acceptable or superior by the Department of the Army during the source selection process. Continuous government oversight is standard practice to mitigate performance risks.
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: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 14
Pricing Type: TIME AND MATERIALS (Y)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: 3000 LINCOLN DR E, MARLTON, NJ, 08053
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: DAAB0703DB009
IDV Type: IDC
Timeline
Start Date: 2003-07-18
Current End Date: 2010-07-28
Potential End Date: 2010-07-28 00:00:00
Last Modified: 2015-05-05
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