DoD's $17.3M contract for accounting services awarded to Lockheed Martin Government Services shows potential value concerns

Contract Overview

Contract Amount: $17,289,004 ($17.3M)

Contractor: Leidos Government Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2006-09-29

End Date: 2008-05-31

Contract Duration: 610 days

Daily Burn Rate: $28.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: 200612!000204!9700!HQ0423!DEF FINANCE & ACTG SVC, COLUMBUS!MDA22001D0002 !A!N! !N!0077 ! !20060929!20070331!058605858!058605858!834951691!N!LOCKHEED MARTIN GOVERNMENT SER!7375 EXECUTIVE PLACE !SEABROOK !MD!20706!16000!035!39!CLEVELAND !CUYAHOGA !OHIO !+000001448620!N!N!000000000000!R703!ACCOUNTING SERVICES !S1 !SERVICES !000 !NOT DISCERNABLE !541512!E! !5!B!S! ! ! !99990909!B! ! !A! !A!N!J!1!001!B! !Z!N!Z! ! !N!C!N! ! ! !C!Z!A!A!000!A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: CLEVELAND, CUYAHOGA County, OHIO, 44199

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $17.3 million to LEIDOS GOVERNMENT SERVICES, INC. for work described as: 200612!000204!9700!HQ0423!DEF FINANCE & ACTG SVC, COLUMBUS!MDA22001D0002 !A!N! !N!0077 ! !20060929!20070331!058605858!058605858!834951691!N!LOCKHEED MARTIN GOVERNMENT SER!7375 EXECUTIVE PLACE !SEABROOK !MD!20706!16000!035!39!CLEVELAND !CUYA… Key points: 1. The contract's value appears high relative to its duration and scope, warranting further scrutiny. 2. Competition dynamics are unclear, as the award details do not specify the number of bidders. 3. Performance context is limited, with no clear metrics provided to assess the effectiveness of accounting services. 4. The contract's sector positioning is within defense financial management, a critical but often complex area. 5. Risk indicators are moderate, primarily stemming from the lack of detailed performance data and competitive transparency.

Value Assessment

Rating: fair

The contract value of $17.3 million over approximately two years for accounting services raises questions about value for money. Without detailed performance metrics or comparisons to similar contracts, it's difficult to definitively assess if this represents a competitive price. The cost-plus-fixed-fee structure can sometimes lead to higher costs if not managed tightly. Benchmarking against industry standards for accounting services of this scale would be necessary for a more robust evaluation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. However, the specific number of bidders and the details of the competitive process are not readily available in the provided data. A robust competition typically involves several qualified bidders, driving down prices and ensuring the government receives the best value. The absence of this detail limits a full assessment of the competitive landscape.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the most competitive pricing. However, without knowing the number of bids received, it's hard to confirm if the optimal price was achieved.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Defense Finance and Accounting Service (DFAS). The services delivered are accounting and financial management support, crucial for military operations and budgeting. The geographic impact is likely concentrated within DFAS operations, potentially supporting personnel across various military branches. Workforce implications may include the direct employment of accounting professionals by Lockheed Martin Government Services to fulfill the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed performance metrics makes it difficult to assess the quality and efficiency of services rendered.
The cost-plus-fixed-fee contract type can incentivize cost overruns if not closely monitored.
Limited transparency on the competitive bidding process hinders a full understanding of price discovery and value.
The contract duration of approximately two years might be insufficient for long-term strategic accounting improvements.

Positive Signals

Awarded under full and open competition, indicating an effort to solicit broad market participation.
The contractor, Lockheed Martin Government Services, is a large, established entity with significant experience in government contracting.
The contract addresses a core function (accounting services) vital for the Department of Defense's financial operations.

Sector Analysis

This contract falls within the professional services sector, specifically focusing on accounting and financial management. The market for government accounting services is substantial, with significant spending allocated annually by various federal agencies. This contract represents a portion of the broader IT and professional services spending within the Department of Defense, which often outsources specialized functions to large contractors like Lockheed Martin. Comparable spending benchmarks would typically be found within the broader professional services category for federal agencies.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a small business set-aside. The primary contractor is a large business, and any subcontracting would be at their discretion, not mandated by a set-aside requirement.

Oversight & Accountability

Oversight for this contract would primarily fall under the purview of the Department of Defense and the Defense Finance and Accounting Service (DFAS). Accountability measures would be defined within the contract's terms and conditions, including performance standards and reporting requirements. Transparency is facilitated through contract databases like FPDS, although detailed performance data may be less accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Finance and Accounting Service Operations
Department of Defense Financial Management
Federal Accounting Services Contracts
Professional Services Contracts (DoD)

Risk Flags

Potential for cost overruns due to CPFF contract type.
Lack of detailed performance metrics.
Limited transparency on competitive bidding outcomes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.3 million to LEIDOS GOVERNMENT SERVICES, INC.. 200612!000204!9700!HQ0423!DEF FINANCE & ACTG SVC, COLUMBUS!MDA22001D0002 !A!N! !N!0077 ! !20060929!20070331!058605858!058605858!834951691!N!LOCKHEED MARTIN GOVERNMENT SER!7375 EXECUTIVE PLACE !SEABROOK !MD!20706!16000!035!39!CLEVELAND !CUYAHOGA !OHIO !+000001448620!N!N!000000000000!R703!ACCOUNTING SERVICES !S1 !SERVICES !000 !NOT DISCERNABLE !541512!E! !5!B!S! ! ! !999

Who is the contractor on this award?

The obligated recipient is LEIDOS GOVERNMENT SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Finance and Accounting Service).

What is the total obligated amount?

The obligated amount is $17.3 million.

What is the period of performance?

Start: 2006-09-29. End: 2008-05-31.

What specific accounting functions were performed under this contract?

The contract data indicates the primary service category as 'ACCOUNTING SERVICES' with a North American Industry Classification System (NAICS) code of 541512, which typically covers Computer Systems Design Services. However, the description 'ACCOUNTING SERVICES' suggests a focus on financial record-keeping, auditing support, financial analysis, and potentially budget execution support for the Defense Finance and Accounting Service (DFAS). Given the agency's mission, these services are critical for managing the vast financial operations of the Department of Defense, including payroll, vendor payments, and financial reporting.

How does the contract value compare to similar accounting service contracts awarded by the DoD?

Comparing the $17.3 million contract value for approximately two years of service requires benchmarking against similar-sized accounting and financial management support contracts within the DoD. Without access to a comprehensive database of comparable contracts, a precise benchmark is difficult. However, for a two-year period, this value suggests a significant scope of work. Contracts for specialized financial services can vary widely based on complexity, number of personnel required, and specific deliverables. Further analysis would involve identifying contracts with similar NAICS codes and agency components to establish a more accurate value comparison.

What are the key performance indicators (KPIs) used to measure the success of this contract?

The provided data does not explicitly list the Key Performance Indicators (KPIs) for this contract. Typically, for accounting services, KPIs might include accuracy rates in financial reporting, timeliness of payment processing, adherence to audit standards, and responsiveness to inquiries. The contract type, Cost Plus Fixed Fee (CPFF), implies that the contractor is reimbursed for allowable costs plus a fixed fee, suggesting that performance standards would be detailed in the contract's Statement of Work (SOW) and monitored through regular progress reports and potentially performance evaluations.

What is Lockheed Martin Government Services' track record with similar DoD accounting contracts?

Lockheed Martin Government Services, as a major defense contractor, has a broad track record in providing various support services to the Department of Defense, including IT, logistics, and administrative functions. While specific details on their performance for this particular accounting services contract (MDA22001D0002) are not provided, their extensive experience suggests a capacity to handle complex government contracts. Past performance evaluations, if available through government databases or reports, would offer a more detailed insight into their reliability and effectiveness in fulfilling similar financial and accounting support roles.

What is the historical spending trend for accounting services by the Defense Finance and Accounting Service?

Analyzing the historical spending trend for accounting services by the Defense Finance and Accounting Service (DFAS) would require access to multi-year spending data for DFAS contracts. This specific contract (MDA22001D0002) was awarded in 2006 and completed in 2008. To understand trends, one would need to examine DFAS's procurement history over several years, looking at the volume and value of contracts awarded for accounting, financial management, and related IT support services. This would help determine if spending in this area has been consistent, increasing, or decreasing, and whether this $17.3 million award was typical for its time.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 7375 EXECUTIVE PLACE, SEABROOK, MD, 04

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: MDA22001D0002

IDV Type: IDC

Timeline