Lockheed Martin awarded $41.6M contract for systems engineering services by the Department of the Army
Contract Overview
Contract Amount: $41,574,500 ($41.6M)
Contractor: Lockheed Martin Integrated Systems, LLC
Awarding Agency: Department of Defense
Start Date: 2004-08-02
End Date: 2008-08-08
Contract Duration: 1,467 days
Daily Burn Rate: $28.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 14
Pricing Type: TIME AND MATERIALS
Sector: Defense
Official Description: 200411!007596!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !DAAB0703DB009 !A!N! !Y!0106 ! !20040802!20110129!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!+000000891000!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !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 $41.6 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC for work described as: 200411!007596!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !DAAB0703DB009 !A!N! !Y!0106 ! !20040802!20110129!068514251!805258373!834951691!N!LOCKHEED MARTIN INTEGRATED SYS!106 APPLE ST SUITE 202 !TINTON FALLS !NJ!07724!73020!025!34!TINTON FALLS !MONM… Key points: 1. Contract awarded through full and open competition, indicating a competitive bidding process. 2. The contract value of $41.6 million represents a significant investment in specialized engineering services. 3. Performance period spans over 4 years, suggesting a long-term need for these services. 4. The contract type is Time and Materials, which can pose cost control challenges if not managed effectively. 5. The contractor, Lockheed Martin Integrated Systems, is a major defense contractor with extensive experience. 6. The North American Industry Classification System (NAICS) code 541710 points to research and development activities.
Value Assessment
Rating: fair
The contract value of $41.6 million for systems engineering services appears to be within a reasonable range for a major defense contractor like Lockheed Martin. However, without specific benchmarks for similar systems engineering contracts within the Department of the Army or for the specific technologies involved, a precise value-for-money assessment is difficult. The Time and Materials (T&M) contract type introduces inherent risk for cost overruns if not closely monitored, as it allows for reimbursement of direct labor and indirect costs plus a fee. Benchmarking against industry standards for T&M contracts in this sector would be necessary for a more definitive assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under a full and open competition, suggesting that multiple bidders were likely invited to submit proposals. The presence of 14 bids indicates a healthy level of interest and competition for this requirement. A competitive process generally leads to better price discovery and potentially more favorable terms for the government. The number of bidders suggests that the market for these specialized systems engineering services is robust.
Taxpayer Impact: The full and open competition ensures that taxpayers benefit from a potentially lower price due to competitive pressures. It also provides assurance that the government is obtaining services from the most capable and cost-effective provider available in the market.
Public Impact
The primary beneficiaries are the Department of the Army, which receives critical systems engineering support. The services delivered are essential for the development, integration, and maintenance of complex defense systems. The geographic impact is primarily within the United States, supporting national defense infrastructure. The contract supports a workforce skilled in advanced engineering and technical services, contributing to the defense industrial base.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Time and Materials contract type can lead to cost overruns if not managed diligently.
- Lack of specific performance metrics in the provided data makes it difficult to assess efficiency.
- The long performance period could introduce risks related to evolving technological requirements.
Positive Signals
- Awarded through full and open competition, suggesting competitive pricing.
- Contractor is a well-established entity with a strong track record in defense contracting.
- The significant number of bids (14) indicates a competitive market and broad interest.
Sector Analysis
This contract falls within the broader defense sector, specifically focusing on systems engineering and integration services. The market for such services is characterized by a few large, established prime contractors and numerous specialized subcontractors. Spending in this area is driven by the continuous need for modernization and sustainment of complex military platforms and communication systems. Comparable spending benchmarks would typically be found within the Department of Defense's overall R&D and professional services procurement data.
Small Business Impact
The provided data does not indicate any specific small business set-aside provisions for this contract. Given the prime contractor is Lockheed Martin Integrated Systems, a large entity, it is possible that subcontracting opportunities may exist for small businesses within their supply chain. However, without explicit subcontracting plans or goals detailed in the award, the direct impact on the small business ecosystem is unclear.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the contracting officer's representative (COR) within the Department of the Army. Accountability measures would be tied to the contract's performance requirements and delivery schedules. Transparency is generally maintained through contract award databases like FPDS-NG, although detailed performance reports are often not publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Department of Defense Systems Engineering Support Contracts
- Army Command, Control, Communications, Computers, and Intelligence (C4I) Systems
- Lockheed Martin Defense Contracts
- Research and Development in Defense Technology
- Electronics and Communication Equipment Procurement
Risk Flags
- Time and Materials contract type carries inherent cost overrun risk.
- Long contract duration may increase exposure to changing requirements and economic fluctuations.
- Lack of detailed performance metrics in public data hinders assessment of efficiency.
- Potential for contractor performance issues over an extended period.
Tags
defense, department-of-defense, department-of-the-army, systems-engineering, time-and-materials, full-and-open-competition, lockheed-martin, research-and-development, new-jersey, large-contract, professional-services
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $41.6 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC. 200411!007596!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !DAAB0703DB009 !A!N! !Y!0106 ! !20040802!20110129!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!+000000891000!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !541330!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 (Department of the Army).
What is the total obligated amount?
The obligated amount is $41.6 million.
What is the period of performance?
Start: 2004-08-02. End: 2008-08-08.
What is Lockheed Martin's track record with similar systems engineering contracts awarded by the Department of Defense?
Lockheed Martin Integrated Systems, and its parent company Lockheed Martin Corporation, have a long and extensive history of performing systems engineering and integration services for the Department of Defense across numerous platforms and programs. They are consistently among the top defense contractors, handling complex projects involving aircraft, missiles, space systems, and communication networks. Their track record generally includes successful delivery on large-scale, high-stakes programs, though like any major contractor, they have also faced scrutiny and challenges on specific projects related to cost, schedule, and performance. Analyzing their past performance on contracts with similar scope, duration, and complexity would provide a more detailed understanding of their capabilities and reliability in executing this specific award.
How does the $41.6 million contract value compare to other systems engineering contracts of similar scope and duration?
Benchmarking the $41.6 million contract value requires comparing it to similar systems engineering services contracts awarded by the Department of Defense or other federal agencies. Factors such as the specific technologies involved, the complexity of the systems being engineered, the duration of the contract (4 years in this case), and the labor categories required significantly influence pricing. Contracts for highly specialized R&D or integration of cutting-edge technology tend to command higher values. Without access to a detailed breakdown of labor hours, rates, and overhead applied, or a direct comparison to contracts with identical Statement of Work (SOW) elements, it's challenging to definitively state if this value is high or low. However, for a major defense contractor like Lockheed Martin performing complex systems engineering over several years, $41.6 million is within a plausible range, though detailed cost analysis would be needed for a precise value assessment.
What are the primary risks associated with the Time and Materials (T&M) contract type for this specific award?
The primary risk associated with the Time and Materials (T&M) contract type for this systems engineering services award is the potential for cost overruns. Unlike fixed-price contracts, T&M contracts reimburse the contractor for direct labor hours at specified hourly rates, plus actual costs for materials and subcontracts, along with a fixed fee or profit. This structure places the onus on the government to closely monitor labor hours, ensure efficiency, and validate that the work performed is necessary and reasonable. If the contractor's labor hours are higher than anticipated, or if material costs escalate unexpectedly, the total cost to the government can exceed initial estimates. Effective government oversight, including detailed progress tracking and robust auditing of timesheets and expenses, is crucial to mitigate these risks and ensure the government receives good value.
How effective is the 'full and open competition' approach in ensuring the best value for taxpayers in this context?
The 'full and open competition' approach is generally considered the most effective method for ensuring the best value for taxpayers when procuring complex services like systems engineering. By allowing all responsible sources to submit bids, it fosters a competitive environment that drives down prices and encourages innovation. The fact that 14 bids were received for this contract suggests that the market is competitive and that the Department of the Army was able to solicit offers from a wide range of qualified contractors. This broad competition increases the likelihood that the government will select a contractor offering a combination of technical capability and cost-effectiveness that maximizes taxpayer value. However, the ultimate value also depends on the government's ability to clearly define requirements and effectively evaluate proposals.
What are the implications of the NAICS code 541710 (Research and Development in Physical, Engineering, and Life Sciences) for this contract?
The assignment of NAICS code 541710, 'Research and Development in the Physical, Engineering, and Life Sciences,' indicates that a significant portion of the work under this contract involves research and development activities related to engineering. This suggests the contract is not merely for routine support or maintenance but likely involves innovation, problem-solving, and the development of new or improved systems, processes, or technologies. For taxpayers, this implies an investment in advancing defense capabilities rather than simply procuring existing goods or services. Contracts under this NAICS code often require highly skilled personnel and may involve a higher degree of uncertainty regarding outcomes, which is typically reflected in the contract type (like T&M) and the overall value.
How does the contract's duration of over 4 years impact its overall risk profile?
A contract duration exceeding 4 years, as seen in this $41.6 million award, introduces several layers of risk. Firstly, the longer the performance period, the greater the potential for scope creep or changes in requirements due to evolving technological landscapes or strategic priorities within the Department of the Army. Managing these changes effectively under a Time and Materials (T&M) contract requires vigilant oversight to prevent uncontrolled cost increases. Secondly, long-term contracts can face risks related to contractor performance degradation over time, or conversely, the government's potential dissatisfaction with the contractor's evolving capabilities. Finally, economic uncertainties, such as inflation or shifts in budget priorities, can impact the feasibility and cost-effectiveness of long-duration contracts. Mitigating these risks necessitates clear contract modification procedures, regular performance reviews, and potentially incorporating flexibility clauses.
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: 2004-08-02
Current End Date: 2008-08-08
Potential End Date: 2008-08-08 00:00:00
Last Modified: 2015-05-06
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