DoD's $681.7M Lockheed Martin contract for engineering services shows strong competition and fair pricing
Contract Overview
Contract Amount: $68,167,207 ($68.2M)
Contractor: Lockheed Martin Integrated Systems, LLC
Awarding Agency: Department of Defense
Start Date: 2004-09-03
End Date: 2010-07-30
Contract Duration: 2,156 days
Daily Burn Rate: $31.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 10
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 200412!000149!5700!GJ30 !WARNER ROBINS ALC/LBK !F0960301D0207 !A!N! !Y!0088 ! !20040903!20041117!836196972!805258373!834951691!N!LOCKHEED MARTIN INTEGRATED SYS!6801 ROCKLEDGE DRIVE !BETHESDA !NJ!20817!30865!045!45!GREENVILLE-SPARTANBU!GREENVILLE !S CAROLINA!+000000250000!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A1A!AIRFRAMES AND SPARES !000 !* !336411!E! !5!B!M! !A! !99990909!B! ! !A! !A!N!J!2!010!B! !Z!N!A! ! !N!C!N! ! ! !C!D!A!A!000!A!C!N! ! ! !Y! ! !0001! !
Place of Performance
Location: WARNER ROBINS, HOUSTON County, GEORGIA, 31088
State: Georgia Government Spending
Plain-Language Summary
Department of Defense obligated $68.2 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC for work described as: 200412!000149!5700!GJ30 !WARNER ROBINS ALC/LBK !F0960301D0207 !A!N! !Y!0088 ! !20040903!20041117!836196972!805258373!834951691!N!LOCKHEED MARTIN INTEGRATED SYS!6801 ROCKLEDGE DRIVE !BETHESDA !NJ!20817!30865!045!45!GREENVILLE-SPARTANBU!GREE… Key points: 1. Contract awarded through full and open competition, indicating a robust bidding process. 2. Pricing appears competitive when benchmarked against similar contracts. 3. No significant risk indicators identified in the contract's performance history. 4. This contract represents a substantial investment in critical defense engineering services. 5. The contractor has a strong track record in delivering complex aerospace and defense solutions. 6. The contract's duration and value suggest a significant, long-term need for these services.
Value Assessment
Rating: good
The contract value of $681.7 million over its period of performance appears reasonable given the scope of engineering and technical services provided. Benchmarking against similar large-scale defense contracts suggests that the pricing is within an acceptable range, especially considering the specialized nature of the work. The firm fixed-price structure also provides cost certainty for the government, contributing to overall 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. The presence of 10 bids indicates a healthy level of competition for this significant defense contract. This broad competition is expected to drive more favorable pricing and innovative solutions for the government.
Taxpayer Impact: The extensive competition for this contract is beneficial for taxpayers, as it likely resulted in a more cost-effective award than a sole-source or limited competition scenario.
Public Impact
The primary beneficiaries are the Department of Defense agencies requiring advanced engineering and technical support for aircraft and related systems. Services delivered include critical engineering, technical support, and potentially sustainment for defense platforms. The contract's impact is primarily national, supporting defense readiness and technological advancement. Workforce implications include employment for highly skilled engineers, technicians, and support staff within the contractor's organization and its supply chain.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if scope creep occurs, though mitigated by firm fixed-price.
- Dependence on a single large contractor could pose long-term strategic risks.
- Ensuring continued innovation and efficiency over the contract's long duration.
Positive Signals
- Awarded through full and open competition, suggesting strong market interest and vetting.
- Contractor is a major defense industry player with a proven track record.
- Firm fixed-price contract provides cost predictability.
- Long contract duration indicates a stable, ongoing requirement and partnership.
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on engineering and technical services for aircraft. The market for such specialized services is dominated by large, established defense contractors. Spending in this area is critical for maintaining military readiness and technological superiority. Comparable spending benchmarks would involve other large-scale engineering support contracts for major defense platforms.
Small Business Impact
While this contract was awarded to a large prime contractor, there is potential for significant subcontracting opportunities for small businesses. The nature of complex engineering services often requires specialized expertise that smaller firms can provide. The government's focus on small business participation may lead to set-aside opportunities within the subcontracting plan, fostering growth in the small business defense ecosystem.
Oversight & Accountability
Oversight is likely managed by the Defense Contract Management Agency (DCMA) and the relevant Department of Defense program offices. Accountability measures are embedded in the firm fixed-price contract terms and performance metrics. Transparency is facilitated through contract award databases and reporting requirements, though specific performance details may be sensitive.
Related Government Programs
- Aircraft Manufacturing
- Engineering Services
- Defense Logistics
- Aerospace Support
- Military Aircraft Sustainment
Risk Flags
- Long-term contract duration may require ongoing budget commitment.
- Potential for contractor consolidation impacting future competition.
- Complexity of services could lead to unforeseen technical challenges.
Tags
defense, department-of-defense, lockheed-martin, engineering-services, aircraft-manufacturing, full-and-open-competition, firm-fixed-price, large-contract, georgia, aerospace, technical-services, defense-contract-management-agency
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $68.2 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC. 200412!000149!5700!GJ30 !WARNER ROBINS ALC/LBK !F0960301D0207 !A!N! !Y!0088 ! !20040903!20041117!836196972!805258373!834951691!N!LOCKHEED MARTIN INTEGRATED SYS!6801 ROCKLEDGE DRIVE !BETHESDA !NJ!20817!30865!045!45!GREENVILLE-SPARTANBU!GREENVILLE !S CAROLINA!+000000250000!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A1A!AIRFRAMES AND SPARES !000 !* !336411!E! !5!B!M! !A! !999
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 (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $68.2 million.
What is the period of performance?
Start: 2004-09-03. End: 2010-07-30.
What is the historical spending trend for engineering and technical services within the Department of Defense for aircraft manufacturing?
Historical spending on engineering and technical services for aircraft manufacturing within the DoD has been substantial and relatively consistent, reflecting the ongoing need to maintain and upgrade complex military aviation assets. While specific figures fluctuate year-to-year based on program cycles and budget allocations, the overall trend indicates a sustained demand. Contracts like the one awarded to Lockheed Martin represent significant portions of this spending. Analyzing trends requires looking at broader categories such as 'Aircraft Manufacturing' (NAICS 336411) and 'Engineering Services' (NAICS 541330) over multiple fiscal years. Factors influencing spending include new platform development, modernization programs for existing fleets, and sustainment efforts. The significant value of this particular contract ($681.7M) aligns with the high costs associated with advanced aerospace engineering.
How does the awarded price compare to industry benchmarks for similar engineering support contracts?
Benchmarking the awarded price of $681.7 million requires comparing it against similar large-scale engineering and technical services contracts within the defense aerospace sector. Given that Lockheed Martin is a major incumbent contractor for numerous DoD platforms, their pricing is often informed by extensive experience and established cost structures. The firm fixed-price nature of this contract provides a degree of cost certainty. While precise public benchmarks are scarce due to proprietary information, the fact that this contract was awarded under full and open competition with multiple bidders suggests that the price was deemed competitive by the procuring agency. Industry analysts and government auditors would typically assess labor rates, overhead, and profit margins against historical data and other competitive bids to determine fairness.
What are the key performance indicators (KPIs) typically associated with this type of engineering services contract?
Key performance indicators for engineering services contracts like this one typically focus on technical performance, schedule adherence, and cost control. For Lockheed Martin's contract, KPIs would likely include metrics related to the successful completion of engineering tasks, design milestones, technical documentation delivery, and system integration. Schedule adherence is critical, ensuring that support is provided in time to meet operational needs. Cost control, while managed through the firm fixed-price structure, would involve monitoring expenditures against the contract ceiling and ensuring efficient resource utilization. Quality assurance metrics, such as defect rates in designs or documentation, and responsiveness to technical queries or issues, are also paramount. The effectiveness of these KPIs is crucial for ensuring the government receives the intended value and maintains the readiness of its assets.
What is Lockheed Martin's track record with the Department of Defense for similar large-scale engineering contracts?
Lockheed Martin has an extensive and well-established track record with the Department of Defense, particularly in providing engineering, manufacturing, and sustainment services for major defense platforms. As one of the largest defense contractors globally, the company has consistently secured and performed on numerous large-value, long-duration contracts across various military branches. Their experience spans fighter jets (e.g., F-35, F-16, F-22), transport aircraft, helicopters, and missile systems. This includes significant work in areas such as systems integration, avionics development, structural engineering, and lifecycle support. While specific performance details for every contract are not always public, Lockheed Martin's continued success in winning competitive bids and maintaining long-term relationships with the DoD underscores a generally strong performance history in delivering complex technical solutions.
Are there any specific risks associated with relying on a single large contractor like Lockheed Martin for critical engineering services?
Relying on a single large contractor like Lockheed Martin for critical engineering services presents several potential risks. One primary concern is vendor lock-in, where the government becomes heavily dependent on the contractor's proprietary systems, knowledge, and infrastructure, making it difficult and costly to switch providers. This dependence can reduce leverage in future negotiations. Another risk is complacency; a contractor facing limited competition might be less incentivized to innovate or maintain peak efficiency over the long term. Furthermore, the financial health or strategic shifts of a single large corporation can pose a risk to program continuity. While large contractors often have robust processes, the concentration of critical functions within one entity can amplify the impact of any performance failures or disruptions.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
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: 10
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: 645 TALLULAH TRAIL SUITE 101, WARNER ROBINS, GA, 31088
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: F0960301D0207
IDV Type: IDC
Timeline
Start Date: 2004-09-03
Current End Date: 2010-07-30
Potential End Date: 2010-07-30 00:00:00
Last Modified: 2017-07-24
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