DoD awards $108.7M engineering services contract to Lockheed Martin for Army support
Contract Overview
Contract Amount: $108,741,861 ($108.7M)
Contractor: Lockheed Martin Integrated Systems, LLC
Awarding Agency: Department of Defense
Start Date: 2009-08-28
End Date: 2013-05-01
Contract Duration: 1,342 days
Daily Burn Rate: $81.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: S3R-0253 BASIC AWARD
Place of Performance
Location: WALL TOWNSHIP, MONMOUTH County, NEW JERSEY, 07719, UNITED STATES OF AMERICA
Plain-Language Summary
Department of Defense obligated $108.7 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC for work described as: S3R-0253 BASIC AWARD Key points: 1. Contract awarded through full and open competition, suggesting a robust market. 2. The contract duration of 1342 days indicates a significant, long-term need. 3. Faced with 3 bidders, the competition level may have influenced pricing. 4. The firm-fixed-price structure shifts performance risk to the contractor. 5. This award falls within the engineering services sector, a critical support function. 6. The contractor, Lockheed Martin, is a major defense industry player.
Value Assessment
Rating: fair
Benchmarking the value of this specific $108.7 million contract is challenging without detailed scope of work and comparable project data. However, the firm-fixed-price contract type suggests that the government has a clear understanding of the requirements and has negotiated a price that the contractor must adhere to. The number of bidders (3) indicates some level of competition, which can help in achieving a reasonable price, but it's not a highly competitive environment. Further analysis would require comparing the per-unit costs or labor rates against industry standards for similar engineering services provided to the Department of the Army.
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. With three bidders participating, the competition level was moderate. While this indicates that the government sought a broad range of potential contractors, a higher number of bidders could potentially drive prices down further through more intense competition. The specific details of the solicitation and evaluation process would be needed to fully assess the effectiveness of the competition in achieving optimal price discovery.
Taxpayer Impact: A full and open competition with multiple bidders generally benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and better value for the services rendered.
Public Impact
The primary beneficiary is the Department of the Army, receiving essential engineering services. Services delivered likely include design, analysis, testing, and technical support for military systems. The contract's performance is likely concentrated in New Jersey, where the contractor is located. This contract supports a segment of the defense industrial workforce involved in engineering and technical roles.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if the firm-fixed-price contract does not adequately account for unforeseen complexities.
- Reliance on a single large contractor may limit future flexibility or innovation.
- The significant dollar value could indicate a critical dependency on this contractor's performance.
Positive Signals
- Award to a well-established contractor with a strong track record in defense.
- Firm-fixed-price contract shifts risk to the contractor, potentially protecting the government from cost increases.
- Full and open competition suggests a structured procurement process aimed at achieving best value.
Sector Analysis
The engineering services sector is a vital component of the defense industrial base, providing specialized technical expertise for the development, maintenance, and modernization of military platforms and systems. This contract, valued at over $100 million, represents a significant investment within this sector. Comparable spending benchmarks would typically involve analyzing other large-scale engineering support contracts awarded by the Department of Defense or other federal agencies for similar services, considering factors like contract duration, scope, and the specific technical disciplines involved.
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. There is no explicit information regarding subcontracting plans for small businesses. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem is unclear, though large prime contracts often involve a tiered subcontracting structure where small businesses may participate.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the relevant program management office within the Department of the Army. Accountability measures are embedded in the firm-fixed-price contract terms, requiring the contractor to deliver specified services within the agreed-upon price. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if allegations of fraud, waste, or abuse arise during the contract's performance.
Related Government Programs
- Department of Defense Engineering Services
- Army Combat Systems Support
- Defense Contractor Support Services
- Lockheed Martin Defense Contracts
Risk Flags
- Potential for contractor underperformance due to fixed-price risk.
- Limited competition may not yield the lowest possible price.
- Contractor's large size may limit opportunities for smaller businesses.
Tags
defense, department-of-the-army, engineering-services, firm-fixed-price, full-and-open-competition, lockheed-martin, new-jersey, major-contract, professional-services, systems-engineering
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $108.7 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC. S3R-0253 BASIC AWARD
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 $108.7 million.
What is the period of performance?
Start: 2009-08-28. End: 2013-05-01.
What is Lockheed Martin's track record with similar Department of the Army engineering services contracts?
Lockheed Martin Integrated Systems, LLC, has a substantial history of performing engineering and technical services for the Department of Defense, including the Army. Analyzing their past performance on similar firm-fixed-price contracts would involve reviewing contract histories for scope alignment, on-time delivery, quality of work, and any past performance issues or commendations. Given their status as a major defense contractor, they generally possess extensive experience and established processes for managing large, complex engineering efforts. Specific data on their performance metrics for prior Army engineering contracts would provide a more precise assessment, but their overall profile suggests a capable provider for this type of work.
How does the $108.7 million value compare to typical engineering services contracts for the Army?
The $108.7 million value for this contract is substantial, placing it in the upper tier of engineering services awards. Typical engineering services contracts can range from a few million dollars for specialized tasks to hundreds of millions for large-scale, multi-year programs. This particular award, with a duration of over three years, suggests a significant and ongoing requirement for engineering support. To provide a precise comparison, one would need to benchmark against other Army contracts for similar services (e.g., systems engineering, technical support, R&D support) awarded within a similar timeframe, considering the number of bidders and contract type. However, it is indicative of a major program requirement.
What are the primary risks associated with this firm-fixed-price contract for engineering services?
The primary risk with a firm-fixed-price (FFP) contract, especially for complex engineering services, is the potential for the contractor to underbid or underestimate the effort required. If Lockheed Martin encounters unforeseen technical challenges, scope creep not formally managed, or significant increases in labor or material costs not accounted for, their profit margins could be squeezed, potentially impacting their motivation or ability to deliver fully. Conversely, the government's risk is that the contractor may cut corners to protect profits, affecting quality. Effective oversight and clear performance metrics are crucial to mitigate these risks and ensure the government receives the intended value.
How effective is full and open competition with three bidders in ensuring optimal price discovery for engineering services?
Full and open competition is the preferred method for ensuring broad market access and promoting price discovery. With three bidders, there is a reasonable level of competition, which generally pressures bidders to offer competitive pricing to win the contract. However, the effectiveness in achieving 'optimal' price discovery can vary. If the three bidders are closely matched in capability and capacity, the competition is likely robust. If one bidder is significantly larger or has a distinct advantage, the competition might be less intense. A higher number of bidders (e.g., five or more) often leads to more aggressive price competition. The specific nature of the engineering services required and the market structure also play a role.
What is the historical spending trend for engineering services by the Department of the Army?
Historical spending by the Department of the Army on engineering services has consistently been in the billions of dollars annually. This reflects the continuous need for design, development, testing, integration, and sustainment support for a vast array of complex military systems. Spending trends are influenced by modernization priorities, geopolitical factors, and budget allocations. While specific year-over-year figures fluctuate, the overall demand for engineering expertise remains a significant and stable component of the Army's procurement activities. This $108.7 million award represents a portion of that ongoing, substantial investment in engineering capabilities.
What are the implications of awarding this contract to Lockheed Martin, a major defense contractor?
Awarding a significant contract like this to Lockheed Martin, a prime defense contractor, has several implications. Positively, it leverages the contractor's extensive experience, established infrastructure, and proven ability to manage large-scale defense programs. This can lead to reliable execution and integration with existing defense systems. Negatively, it concentrates a large amount of federal spending with a single, major entity, potentially reducing opportunities for smaller, specialized firms and limiting market diversification. It also raises questions about potential contractor influence and the need for robust government oversight to ensure fair pricing and performance.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering 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
Offers Received: 3
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: 1800 ROUTE 34, WALL, NJ, 07719
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $179,036,097
Exercised Options: $108,741,861
Current Obligation: $108,741,861
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W15P7T06DE405
IDV Type: IDC
Timeline
Start Date: 2009-08-28
Current End Date: 2013-05-01
Potential End Date: 2013-05-01 00:00:00
Last Modified: 2016-02-16
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