DoD's $34M Lockheed Martin contract for computer facilities management services awarded without competition
Contract Overview
Contract Amount: $34,060,522 ($34.1M)
Contractor: Lockheed Martin Integrated Systems, LLC
Awarding Agency: Department of Defense
Start Date: 2008-12-12
End Date: 2010-09-30
Contract Duration: 657 days
Daily Burn Rate: $51.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST NO FEE
Sector: IT
Official Description: R0I0020 S09-0132 FUNDING BLA GAPS ON MOD P00014
Place of Performance
Location: VICKSBURG, WARREN County, MISSISSIPPI, 39180
Plain-Language Summary
Department of Defense obligated $34.1 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC for work described as: R0I0020 S09-0132 FUNDING BLA GAPS ON MOD P00014 Key points: 1. Contract awarded on a cost-plus-no-fee basis, which can limit cost control. 2. The contract was not competed, raising questions about potential overpayment and lack of market price discovery. 3. A high number of modifications (P00014) suggests potential scope creep or evolving requirements. 4. The contract duration of 657 days (approx. 2 years) is substantial for IT services. 5. The contract was awarded to a single, large business, with no indication of small business subcontracting. 6. The contract's value of $34M over its period warrants scrutiny for value for money.
Value Assessment
Rating: questionable
The contract's cost-plus-no-fee structure, while allowing flexibility, offers less incentive for the contractor to control costs compared to fixed-price contracts. Without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar contracts. The lack of competition suggests that the government may not have secured the best possible price for these computer facilities management services. The total award amount of $34,060,522 over its period needs careful evaluation to ensure it represents a fair and reasonable cost.
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 services, or in urgent situations. However, the lack of competition means there was no opportunity for price discovery through bidding, potentially leading to higher costs for the government. It also limits the government's ability to explore innovative solutions or leverage market competition to drive down prices.
Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without a bidding process, the government lacks assurance that the price reflects the best value achievable in the market.
Public Impact
The Department of the Army benefits from these computer facilities management services, ensuring the operation of its IT infrastructure. Services include the management and maintenance of computer facilities, crucial for military operations and administrative functions. The contract's geographic impact is likely concentrated where Lockheed Martin Integrated Systems, LLC operates or provides services, potentially within Mississippi given the 'MS' state code. The contract supports jobs within Lockheed Martin, a major defense contractor, contributing to the aerospace and defense industry workforce.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition and potential cost savings.
- Cost-plus-no-fee contract type may not incentivize cost efficiency.
- Numerous modifications (P00014) could indicate scope creep or poor initial planning.
- Lack of small business participation noted, potentially missing opportunities for smaller enterprises.
Positive Signals
- Awarded to a large, established contractor (Lockheed Martin) with significant experience.
- Contract duration of over 650 days suggests a sustained need for these services.
- The contract addresses essential IT infrastructure management for the Department of Defense.
Sector Analysis
This contract falls within the Information Technology (IT) sector, specifically focusing on computer facilities management services. This is a critical area for any large organization, especially the Department of Defense, which relies heavily on robust and secure IT infrastructure. The market for IT services is vast and competitive, but specialized facility management can be concentrated among a few large providers. Comparable spending benchmarks for such services can vary widely based on scope, security requirements, and geographic location.
Small Business Impact
This contract was awarded to Lockheed Martin Integrated Systems, LLC, a large business. There is no indication of a small business set-aside, nor any explicit mention of subcontracting goals for small businesses. This suggests that opportunities for small businesses to participate in this specific contract may have been limited. The absence of small business involvement could mean missed opportunities to foster innovation and economic growth within the small business sector for IT services.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures would include performance reviews, milestone tracking, and financial audits. Transparency is generally maintained through contract databases like FPDS, where basic award information is publicly available. The Inspector General's office for the Department of Defense may conduct audits or investigations if specific concerns regarding waste, fraud, or abuse arise.
Related Government Programs
- Defense Information Systems Agency (DISA) IT Services
- Army IT Support Contracts
- Cloud Computing Services Contracts
- Data Center Operations Contracts
- Information Technology Professional Services
Risk Flags
- Sole-source award
- Cost-plus-no-fee contract type
- High number of contract modifications
- Lack of small business participation
Tags
it, department-of-defense, department-of-the-army, sole-source, large-business, computer-facilities-management, cost-plus-no-fee, mississippi, delivery-order, it-services
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $34.1 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC. R0I0020 S09-0132 FUNDING BLA GAPS ON MOD P00014
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 $34.1 million.
What is the period of performance?
Start: 2008-12-12. End: 2010-09-30.
What is the track record of Lockheed Martin Integrated Systems, LLC in providing computer facilities management services to the Department of Defense?
Lockheed Martin Integrated Systems, LLC, now part of Lockheed Martin Corporation, has a long history of providing complex IT and systems integration services to the U.S. military and government agencies. Their experience spans various domains, including infrastructure management, cybersecurity, and mission systems support. For computer facilities management, they typically handle large-scale operations, ensuring the availability, integrity, and security of data centers and associated IT infrastructure. Given their status as a major defense contractor, they possess extensive resources and expertise. However, specific performance metrics for this particular contract (R0I0020 S09-0132) would require access to internal DoD performance reports or contract close-out documentation, which are not publicly detailed in the provided data.
How does the $34M contract value compare to similar computer facilities management contracts awarded by the DoD?
Benchmarking the $34M contract value requires comparing it against similar contracts for computer facilities management services within the Department of Defense. Factors such as the scope of services (e.g., number of servers managed, data center size, security levels), contract duration, and geographic location significantly influence pricing. Without specific details on these factors for this contract, a direct comparison is challenging. However, $34 million over approximately two years for managing significant IT infrastructure is within the range for large-scale enterprise IT services. Contracts for similar services can range from a few million to hundreds of millions of dollars depending on the scale and complexity. The sole-source nature of this award, however, raises concerns about whether this represents the most competitive pricing achievable.
What are the primary risks associated with a sole-source, cost-plus-no-fee contract for IT services?
The primary risks associated with a sole-source, cost-plus-no-fee (CPNF) contract for IT services are twofold. Firstly, the sole-source nature eliminates competitive pressure, which can lead to inflated prices and reduced incentive for the contractor to innovate or operate efficiently. The government lacks the assurance that it is receiving the best value. Secondly, the CPNF structure means the contractor is reimbursed for allowable costs but receives no fee or profit. While this might seem cost-saving, it can create an environment where the contractor has little financial incentive to control costs, as their primary goal is simply to cover expenses. This can lead to cost overruns and a lack of focus on efficiency compared to fixed-price contracts where the contractor bears more financial risk.
What is the potential impact of the 'P00014' modification on the contract's scope and cost?
The designation 'P00014' indicates that this contract has undergone at least 14 modifications. Each modification can alter the contract's terms, including scope, schedule, and price. A high number of modifications, especially if they involve significant changes, can signal several issues. It might suggest that the initial contract requirements were not fully defined, leading to scope creep as needs evolved. Alternatively, it could indicate poor planning or unforeseen technical challenges. Each modification potentially adds administrative burden and could increase the overall cost of the contract beyond the initially anticipated amount. Without details on the nature of these modifications, it's difficult to quantify their exact impact, but a high number warrants scrutiny for potential inefficiencies and cost growth.
How does this contract fit into the broader IT spending patterns of the Department of the Army?
This contract for computer facilities management services represents a component of the Department of the Army's overall IT spending. The Army, like all branches of the military, relies heavily on robust IT infrastructure for command, control, communications, intelligence, and logistics. Spending in this area typically includes hardware, software, network operations, cybersecurity, and personnel. Contracts for facilities management are crucial for maintaining the physical and operational integrity of data centers and server environments. This $34M award, while substantial, is likely one of many IT-related expenditures. Analyzing historical spending patterns would reveal trends in IT modernization, outsourcing, and specific service areas prioritized by the Army over time.
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: $34,060,522
Exercised Options: $34,060,522
Current Obligation: $34,060,522
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: 2008-12-12
Current End Date: 2010-09-30
Potential End Date: 2010-09-30 00:00:00
Last Modified: 2020-05-29
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