DoD's $17.8M Lockheed Martin contract for communications services awarded without competition
Contract Overview
Contract Amount: $17,840,819 ($17.8M)
Contractor: Lockheed Martin Integrated Systems, LLC
Awarding Agency: Department of Defense
Start Date: 2008-07-23
End Date: 2012-09-28
Contract Duration: 1,528 days
Daily Burn Rate: $11.7K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST NO FEE
Sector: IT
Official Description: FY08-0092, COMMUNICATIONS SERVICES
Place of Performance
Location: VICKSBURG, WARREN County, MISSISSIPPI, 39180
Plain-Language Summary
Department of Defense obligated $17.8 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC for work described as: FY08-0092, COMMUNICATIONS SERVICES Key points: 1. Contract awarded on a cost-plus-no-fee basis, which can incentivize higher spending. 2. Lack of competition raises concerns about potential overpricing and reduced value for money. 3. The contract duration of over 4 years suggests a significant, ongoing need for these services. 4. Awarded to a large, established defense contractor, indicating a focus on established capabilities. 5. The specific service category (Computer Facilities Management) is critical for operational support. 6. No small business participation noted, potentially limiting opportunities for smaller firms.
Value Assessment
Rating: questionable
The contract's cost-plus-no-fee structure, combined with a lack of competition, makes a definitive value assessment difficult without further data on performance and cost drivers. Benchmarking against similar communications services contracts, especially those competed, would be necessary to determine if the $17.8 million expenditure represents a fair price. The absence of a fixed price or incentive structure could lead to less cost control.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required service, or in urgent situations. The lack of competition means there was no market pressure to drive down prices or encourage innovative solutions from a wider pool of contractors.
Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as there is no competitive bidding process to ensure the best possible price.
Public Impact
The Department of the Army benefits from the provision of essential communications services. These services likely support critical military operations and command and control functions. The contract's geographic impact is centered in Mississippi, where the services are performed. The workforce implications involve personnel employed by Lockheed Martin to deliver these services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may lead to inflated costs.
- Cost-plus-no-fee contract type offers limited incentive for cost efficiency.
- Sole-source award bypasses potential for better value through competitive bidding.
Positive Signals
- Awarded to a reputable large defense contractor with established capabilities.
- Contract duration suggests a stable, long-term need being met.
- Service category is essential for operational support.
Sector Analysis
This contract falls within the IT and professional services sector, specifically focusing on computer facilities management. The market for such services is substantial, with government agencies being significant consumers. Comparable spending benchmarks would involve analyzing other large IT service contracts awarded to major defense contractors, particularly those for facility management and communication infrastructure support, to gauge pricing and scope.
Small Business Impact
The data indicates this contract was not set aside for small businesses, nor does it appear to involve significant subcontracting to small businesses (SB=false). This suggests that the primary contractor, Lockheed Martin, is handling the entirety of the work. Consequently, there are limited direct benefits or implications for the small business ecosystem through this specific award.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures would be tied to the contract's performance clauses and reporting requirements. Transparency is limited due to the sole-source nature and lack of public competition details, though contract award data is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Defense Communications Services
- IT Infrastructure Management
- Computer Facilities Management
- Lockheed Martin Contracts
- Sole-Source IT Awards
Risk Flags
- Lack of Competition
- Cost-Plus Contract Type
- Potential for Cost Overruns
- Limited Value for Money Assessment
Tags
it, defense, department-of-the-army, communications-services, sole-source, cost-plus-no-fee, lockheed-martin, computer-facilities-management, mississippi, delivery-order
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $17.8 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC. FY08-0092, COMMUNICATIONS SERVICES
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 $17.8 million.
What is the period of performance?
Start: 2008-07-23. End: 2012-09-28.
What is the track record of Lockheed Martin Integrated Systems, LLC in delivering communications services for the Department of Defense?
Lockheed Martin Integrated Systems, LLC, now part of Lockheed Martin Corporation, has a long and extensive history of providing a wide array of services to the Department of Defense, including complex communications, IT, and systems integration. Their track record generally indicates a capacity to handle large-scale, critical programs. However, specific performance metrics for this particular $17.8 million contract, such as on-time delivery, quality of service, and adherence to budget (within the cost-plus framework), would require deeper analysis of performance reports and potentially contract close-out data. Given their status as a major defense contractor, they are accustomed to stringent performance requirements and oversight.
How does the $17.8 million total value compare to similar communications services contracts awarded by the DoD?
Comparing the $17.8 million total value requires careful consideration of contract scope, duration, and service specifics. As a sole-source award over approximately 4 years (July 2008 - Sept 2012), the annual value is roughly $4.45 million. This figure needs to be benchmarked against other DoD contracts for similar 'Computer Facilities Management Services' (NAICS 541513) or broader 'Communications Services'. Competitively awarded contracts of similar scale might offer insights into market pricing. However, sole-source awards, especially cost-plus types, often deviate from competitive benchmarks, potentially indicating a higher cost to the government if not rigorously managed.
What are the primary risks associated with a sole-source, cost-plus-no-fee contract for communications services?
The primary risks associated with this contract structure are significant. A sole-source award eliminates the downward price pressure that competition provides, potentially leading to higher costs for the government. The 'cost-plus-no-fee' (CPNF) structure, while sometimes necessary for R&D or undefined scopes, offers minimal incentive for the contractor to control costs, as their profit isn't directly tied to efficiency. This can increase the risk of cost overruns and reduce overall value for money. Furthermore, without competition, there's a reduced impetus for innovation and potentially less rigorous performance monitoring compared to a fixed-price, competitively bid contract.
How effective are cost-plus-no-fee contracts in ensuring program effectiveness for essential services like communications?
Cost-plus-no-fee contracts are generally considered less effective for ensuring cost-efficiency compared to fixed-price contracts. Their effectiveness in achieving program goals hinges heavily on robust government oversight, detailed performance metrics, and strong program management. For essential services like communications, where reliability and availability are paramount, CPNF might be chosen if the scope of work is highly uncertain or requires significant flexibility. However, this flexibility comes at the cost of potential inefficiencies. Program effectiveness is thus more dependent on the government's ability to manage the contractor and define clear performance outcomes, rather than on the contract's inherent structure promoting efficiency.
What are the historical spending patterns for Computer Facilities Management Services (NAICS 541513) within the Department of the Army?
Historical spending patterns for NAICS 541513 (Computer Facilities Management Services) within the Department of the Army are substantial and have generally trended upwards with increasing reliance on IT infrastructure. Analyzing historical data would reveal significant investments in maintaining and managing complex computing environments, networks, and data centers. This specific $17.8 million contract, awarded in 2008, represents a portion of that broader spending. Understanding the overall trend allows for context on whether this contract's value was typical, high, or low relative to the Army's overall IT infrastructure budget and other similar service procurements during that period.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Facilities Management Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST NO FEE (S)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: 2001 JEFFERSON DAVIS HWY, STE 900, ARLINGTON, VA, 22202
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $17,840,819
Exercised Options: $17,840,819
Current Obligation: $17,840,819
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W91WMC07D0001
IDV Type: IDC
Timeline
Start Date: 2008-07-23
Current End Date: 2012-09-28
Potential End Date: 2012-09-28 00:00:00
Last Modified: 2020-05-29
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