DoD's $271M DCGS-A data fusion contract awarded to Lockheed Martin shows fair value with limited competition
Contract Overview
Contract Amount: $271,014,621 ($271.0M)
Contractor: Lockheed Martin Integrated Systems, LLC
Awarding Agency: Department of Defense
Start Date: 2010-05-27
End Date: 2012-09-26
Contract Duration: 853 days
Daily Burn Rate: $317.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: TIME AND MATERIALS
Sector: Defense
Official Description: DCGS-A DIB AND DATA FUSION SUPPORT CONUS/OCONUS. T&M SOFTWARE SUPPORT TASK ORDER
Place of Performance
Location: ABERDEEN PROVING GROUND, HARFORD County, MARYLAND, 21005
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $271.0 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC for work described as: DCGS-A DIB AND DATA FUSION SUPPORT CONUS/OCONUS. T&M SOFTWARE SUPPORT TASK ORDER Key points: 1. The contract's value appears reasonable given the complexity of intelligence data fusion and software support. 2. Competition was limited, potentially impacting price discovery and taxpayer value. 3. The Time and Materials pricing model introduces some risk for cost overruns. 4. Performance occurred over a 2.8-year period, indicating a sustained need for these services. 5. This contract falls within the Engineering Services sector, supporting critical defense intelligence systems. 6. The award was a single delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) contract.
Value Assessment
Rating: fair
Benchmarking this contract's value is challenging without specific details on the scope of work and comparable T&M rates for similar intelligence systems support. However, the total value of approximately $271 million over roughly 2.8 years suggests a significant investment. The Time and Materials (T&M) pricing structure, while common for evolving software support needs, inherently carries a higher risk of cost escalation compared to fixed-price contracts. Without detailed performance metrics or cost breakdowns, a definitive value-for-money assessment is difficult, but the sustained award suggests the services met the Army's requirements.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. However, the data specifies this was a single delivery order, and the number of actual bidders for this specific order is not provided. A full and open competition generally fosters better price discovery and encourages a wider range of solutions. The fact that it was a delivery order under a larger IDIQ structure might mean that the initial IDIQ competition was robust, but the specific competition for this task order's details are not fully transparent.
Taxpayer Impact: While full and open competition is generally beneficial for taxpayers by promoting competitive pricing, the specific details of this single delivery order's competition level are not fully elaborated, making it difficult to quantify the exact taxpayer savings.
Public Impact
Intelligence analysts and warfighters benefit from enhanced data fusion capabilities, leading to improved situational awareness. The contract supports the Distributed Common Ground System-Army (DCGS-A), a critical intelligence platform. Services were delivered CONUS/OCONUS, indicating support for global military operations. The contract likely supported a workforce of software engineers, developers, and technical specialists.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- The Time and Materials (T&M) pricing model can lead to cost overruns if not closely managed.
- Limited transparency on the specific competition for this delivery order makes it hard to assess optimal price discovery.
- The duration and value of the contract suggest a significant reliance on a single contractor for critical systems support.
Positive Signals
- Awarded under full and open competition, suggesting a broad initial search for qualified vendors.
- The sustained award over nearly three years indicates the contractor met the Army's performance requirements.
- Support for DCGS-A is crucial for national security intelligence gathering and dissemination.
Sector Analysis
This contract falls within the Engineering Services sector (NAICS 541330), which is a significant part of the federal IT and defense spending landscape. The market for intelligence data fusion and software support is highly specialized, dominated by large defense contractors with deep expertise in military systems. The total federal spending on engineering services is in the tens of billions annually, with a substantial portion dedicated to defense-related IT and intelligence platforms like DCGS-A. This contract represents a specific, high-value task order within that broader market.
Small Business Impact
The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Large prime contractors like Lockheed Martin are often awarded these types of complex, high-value contracts. While the prime contract may not have a small business set-aside, there is potential for subcontracting opportunities for small businesses to provide specialized support or components. However, without specific subcontracting plans or data, the direct impact on the small business ecosystem is unclear.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. The contract's Time and Materials nature necessitates rigorous oversight to ensure labor hours and material costs are reasonable and allocable to the contract's scope. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse were suspected. Transparency is generally maintained through contract award databases, but detailed performance and cost data are often sensitive.
Related Government Programs
- Intelligence, Surveillance, and Reconnaissance (ISR) Systems
- Command and Control Systems
- Defense Software Development
- Information Technology Support Services
- Ground Systems Engineering
Risk Flags
- Time and Materials Pricing
- Limited Competition Transparency
- Potential for Cost Overruns
- Reliance on Single Contractor for Critical System
Tags
defense, department-of-the-army, intelligence-support, software-development, engineering-services, time-and-materials, full-and-open-competition, delivery-order, maryland, conus, oconus, dcgs-a
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $271.0 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC. DCGS-A DIB AND DATA FUSION SUPPORT CONUS/OCONUS. T&M SOFTWARE SUPPORT TASK ORDER
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 $271.0 million.
What is the period of performance?
Start: 2010-05-27. End: 2012-09-26.
What was the specific scope of work for DCGS-A DIB and Data Fusion Support?
The contract data indicates "DCGS-A DIB AND DATA FUSION SUPPORT CONUS/OCONUS. T&M SOFTWARE SUPPORT TASK ORDER." DCGS-A (Distributed Common Ground System-Army) is a critical intelligence analysis platform used by the U.S. Army. DIB likely refers to the Defense Intelligence Business System or a similar data integration component. The "Data Fusion Support" aspect implies the contractor was responsible for integrating, processing, and analyzing various data streams to provide a more cohesive intelligence picture. The "T&M Software Support" signifies that the work was performed on a Time and Materials basis, covering labor hours and direct material costs, focused on software development, maintenance, or enhancement for the DCGS-A system.
How does the $271 million value compare to similar intelligence data fusion contracts?
Direct comparison is difficult without access to proprietary contract details and specific performance metrics. However, $271 million over approximately 2.8 years (853 days) for a critical intelligence system like DCGS-A suggests a substantial but not necessarily exorbitant investment. Large-scale intelligence system development and sustainment contracts can range from tens to hundreds of millions of dollars, or even billions for major platform overhauls. The value appears to be in line with complex software engineering and integration efforts for major defense programs, especially considering the T&M pricing model which can inflate costs compared to fixed-price contracts if not managed tightly.
What are the primary risks associated with a Time and Materials (T&M) contract for software support?
The primary risk with T&M contracts, like this one for DCGS-A support, is the potential for cost overruns. Unlike fixed-price contracts, T&M agreements do not have a predetermined ceiling on the total cost. The government pays for the actual labor hours expended and the cost of materials used. This can lead to higher-than-expected costs if the project scope expands, if inefficiencies arise, or if contractor personnel bill excessive hours. Effective oversight, detailed tracking of labor categories and hours, and clear definition of the "materials" are crucial to mitigate these risks and ensure fair pricing for the government.
What is the significance of DCGS-A and its role in Army intelligence operations?
The Distributed Common Ground System-Army (DCGS-A) is the cornerstone of the Army's intelligence architecture. It serves as the primary system for collecting, processing, analyzing, and disseminating intelligence information from various sources (like satellites, drones, human intelligence, etc.) to commanders and soldiers at all echelons. DCGS-A enables intelligence analysts to fuse disparate data, create intelligence products, and provide actionable insights. Support contracts like this one are vital for maintaining, updating, and enhancing the capabilities of DCGS-A to keep pace with evolving threats and technological advancements in the intelligence community.
What does 'full and open competition' mean in the context of this delivery order?
In the context of this delivery order, 'full and open competition' means that the Department of the Army was required to solicit proposals from all qualified sources. This typically involves publishing a notice of the requirement, allowing any interested and capable company to submit a bid. The goal is to maximize competition, which theoretically leads to better pricing, innovative solutions, and a wider selection of qualified contractors. However, it's important to note that this was a delivery order under a potentially larger IDIQ contract, meaning the initial competition might have occurred when the IDIQ was awarded, and this specific order benefited from that broader framework.
How does the geographic scope (CONUS/OCONUS) impact the contract's execution and cost?
The designation of CONUS (Continental United States) and OCONUS (Outside Continental United States) indicates that the support services were required both domestically and potentially in overseas operational theaters. OCONUS support often involves higher costs due to factors such as travel, per diem, hazardous duty pay, logistical challenges, security requirements, and potentially different labor rates. The need for both CONUS and OCONUS support suggests the contractor's personnel may have been deployed to various locations to provide direct assistance to deployed units or to support systems operating globally, adding complexity and cost to the contract.
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: 1
Pricing Type: TIME AND MATERIALS (Y)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp
Address: 3000 LINCOLN DR E, MARLTON, NJ, 08053
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $271,014,621
Exercised Options: $271,014,621
Current Obligation: $271,014,621
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W15P7T06DE405
IDV Type: IDC
Timeline
Start Date: 2010-05-27
Current End Date: 2012-09-26
Potential End Date: 2012-09-26 12:09:00
Last Modified: 2022-09-02
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