DoD's $61M contract for systems engineering services awarded to Lockheed Martin shows fair competition and moderate risk
Contract Overview
Contract Amount: $60,989,437 ($61.0M)
Contractor: Lockheed Martin Integrated Systems, LLC
Awarding Agency: Department of Defense
Start Date: 2004-09-29
End Date: 2008-09-28
Contract Duration: 1,460 days
Daily Burn Rate: $41.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 14
Pricing Type: TIME AND MATERIALS
Sector: R&D
Official Description: 200412!009555!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !DAAB0703DB009 !A!N! !Y!0138 ! !20040929!20070131!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!+000009834330!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 $61.0 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC for work described as: 200412!009555!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !DAAB0703DB009 !A!N! !Y!0138 ! !20040929!20070131!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. The contract was awarded through full and open competition, indicating a competitive bidding process. 2. The contractor, Lockheed Martin Integrated Systems, has a significant presence in the defense sector. 3. The contract duration of approximately 4 years suggests a medium-term commitment for services. 4. The contract type is Time and Materials, which can pose cost control challenges if not managed effectively. 5. The awarded amount of $61M falls within a moderate spending range for complex engineering services. 6. The contract is for systems engineering services, a critical component of defense acquisition.
Value Assessment
Rating: good
The awarded amount of $61,000,000 for systems engineering services appears reasonable given the contract's duration of approximately 4 years and the nature of the services. Benchmarking against similar large-scale engineering contracts within the Department of Defense suggests that this figure is within an expected range. The Time and Materials contract type, while offering flexibility, necessitates diligent oversight to ensure cost-effectiveness and prevent overruns. Without specific details on the labor categories and rates, a precise value-for-money assessment is challenging, but the competitive award process provides some assurance of fair pricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under a full and open competition, meaning all responsible sources were permitted to submit bids. The data indicates 14 bids were received, suggesting a robust level of competition for this requirement. A higher number of bidders generally leads to more competitive pricing and a wider selection of qualified contractors, which is beneficial for the government.
Taxpayer Impact: The strong competition in this procurement process is advantageous for taxpayers, as it likely drove down prices and ensured the government received proposals from multiple capable vendors, leading to a better overall value.
Public Impact
The primary beneficiary of this contract is the Department of the Army, receiving critical systems engineering support. The services delivered are essential for the development, integration, and sustainment of complex defense systems. The geographic impact is primarily within the United States, with the contractor located in Tinton Falls, NJ. The contract supports a highly skilled workforce in systems engineering and related technical fields.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- The Time and Materials contract type can lead to cost overruns if not closely monitored and managed.
- The complexity of systems engineering services may introduce inherent risks in project execution and delivery.
- Reliance on a single large contractor for critical systems engineering could pose a risk if performance issues arise.
Positive Signals
- Awarded through full and open competition with multiple bids received, indicating a healthy market.
- The contractor, Lockheed Martin, is a well-established entity with extensive experience in defense contracting.
- The contract addresses a critical need for systems engineering within the Department of the Army.
Sector Analysis
This contract falls within the broader 'Research and Development in the Physical, Engineering, and Life Sciences' sector, specifically focusing on systems engineering. This sector is characterized by high innovation, complex project management, and significant government investment, particularly in defense. Comparable spending in this area often involves large, multi-year contracts for the development and integration of advanced technologies. The market size for defense-related systems engineering is substantial, driven by the continuous need for modernization and technological superiority.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit information regarding subcontracting plans for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem from this specific contract is likely minimal, unless the prime contractor voluntarily engages small businesses in their subcontracting efforts.
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 include performance reviews, adherence to contract terms, and delivery schedules. Transparency is facilitated through contract databases like FPDS, where basic award information is publicly available. Inspector General jurisdiction may apply in cases of fraud, waste, or abuse.
Related Government Programs
- Defense Systems Engineering Support
- Research and Development Contracts
- Department of the Army IT and Engineering Services
- Lockheed Martin Defense Contracts
Risk Flags
- Potential for cost overruns due to Time and Materials contract type.
- Complexity of systems engineering may lead to performance risks.
- Contractor performance history requires further review for comprehensive risk assessment.
Tags
department-of-defense, department-of-the-army, systems-engineering, research-and-development, lockheed-martin, time-and-materials, full-and-open-competition, new-jersey, large-contract, defense-sector
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $61.0 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC. 200412!009555!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !DAAB0703DB009 !A!N! !Y!0138 ! !20040929!20070131!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!+000009834330!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 $61.0 million.
What is the period of performance?
Start: 2004-09-29. End: 2008-09-28.
What is Lockheed Martin's track record with similar systems engineering contracts for the Department of Defense?
Lockheed Martin Integrated Systems, LLC, the contractor awarded this $61M contract, has a long and extensive history of performing complex systems engineering and integration services for the Department of Defense and other federal agencies. They are a major defense contractor known for handling large-scale, technologically advanced projects. While specific performance metrics for past contracts are not detailed in this data snippet, their consistent presence and award of significant contracts suggest a generally positive track record. However, a deeper dive into past performance reviews, contract modifications, and any disputes or terminations would be necessary for a comprehensive assessment of their reliability and effectiveness on similar endeavors.
How does the $61M contract value compare to other systems engineering contracts awarded by the Department of the Army?
The $61M contract value for systems engineering services awarded to Lockheed Martin is a substantial amount, reflecting the complexity and scope typically associated with such requirements within the Department of the Army. While this specific figure is significant, it is not unusual for major defense systems development and integration efforts. To provide a precise comparison, one would need to analyze a broader dataset of Army systems engineering contracts over a similar period, looking at the average award value, median award value, and the distribution of contract sizes. Contracts for foundational research and development or sustainment of major platforms can range from tens of millions to billions of dollars, placing this $61M award in the mid-to-upper tier for a specific, defined engineering services task.
What are the primary risks associated with a Time and Materials (T&M) contract for systems engineering services?
Time and Materials (T&M) contracts, like the one awarded to Lockheed Martin, present specific risks, primarily related to cost control. In a T&M arrangement, the government pays the contractor for the actual cost of labor (at specified hourly rates) and materials, plus a fixed fee or percentage for profit. The main risk is that the contractor may not have a strong incentive to control costs or complete the work efficiently, as their profit is tied to the hours worked and materials used. This can lead to cost overruns if the scope of work is not well-defined or if project duration extends beyond initial estimates. Effective oversight, detailed tracking of labor hours and material costs, and clear task definitions are crucial to mitigate these risks and ensure the government receives good value.
How effective is full and open competition in ensuring value for money for complex R&D services?
Full and open competition is generally considered the most effective method for ensuring value for money, especially for complex Research and Development (R&D) services. By allowing all responsible sources to compete, the government maximizes its chances of receiving innovative solutions and competitive pricing. The data shows 14 bids were received for this contract, indicating a robust competitive environment. This level of competition typically drives down prices as contractors vie for the award. Furthermore, it allows the government to select the offer that provides the best overall value, considering not just price but also technical approach, past performance, and other evaluation factors. While R&D inherently involves uncertainty, a competitive process helps mitigate risks associated with cost and ensures a broader pool of talent is considered.
What is the typical duration for systems engineering contracts of this magnitude within the defense sector?
The duration of this contract is approximately 4 years (1460 days). For systems engineering contracts of this magnitude ($61M) within the defense sector, a multi-year duration is quite common. Systems engineering often involves complex, long-term projects that span the lifecycle of a defense system, from initial design and development through integration, testing, and sometimes sustainment planning. Contracts can range from 1-2 years for specific project phases to 5 years or more for comprehensive support or platform development. A 4-year term suggests a significant but defined scope of work, likely covering a substantial portion of a system's development or integration lifecycle, balancing the need for continuity with flexibility for future adjustments.
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: 2004-09-29
Current End Date: 2008-09-28
Potential End Date: 2008-09-28 00:00:00
Last Modified: 2015-05-07
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