GSA awards $679M IT services contract to Lockheed Martin, spanning over a decade

Contract Overview

Contract Amount: $678,979,156 ($679.0M)

Contractor: Lockheed Martin Services, LLC

Awarding Agency: General Services Administration

Start Date: 2000-12-15

End Date: 2010-11-30

Contract Duration: 3,637 days

Daily Burn Rate: $186.7K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20020, UNITED STATES OF AMERICA

State: District of Columbia Government Spending

Plain-Language Summary

General Services Administration obligated $679.0 million to LOCKHEED MARTIN SERVICES, LLC for work described as: Key points: 1. Contract value suggests significant, long-term IT support needs for the agency. 2. Sole-source award raises questions about competition and potential cost efficiencies. 3. Long contract duration (nearly 10 years) may indicate stable, ongoing requirements. 4. Fixed-price contract type shifts performance risk to the contractor. 5. Focus on computer systems design services points to core IT infrastructure support. 6. Award to a large, established defense contractor suggests a need for specialized expertise.

Value Assessment

Rating: fair

The contract's total value of $679 million over nearly 10 years averages to approximately $68 million annually. Without specific deliverables or performance metrics, a direct value-for-money assessment is challenging. However, given the duration and the nature of IT systems design services, this figure appears within a reasonable range for large-scale government IT support. Benchmarking against similar long-term, comprehensive IT service contracts would provide a clearer picture of its competitiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source delivery order, meaning it was not openly competed. This approach is typically used when a specific contractor possesses unique capabilities or when urgency dictates a rapid award. The lack of competition means that price discovery through market forces was limited, potentially leading to higher costs than if multiple vendors had bid.

Taxpayer Impact: Sole-source awards can mean taxpayers do not benefit from competitive pricing, potentially resulting in less favorable terms compared to a fully competed contract.

Public Impact

Federal agencies requiring complex computer systems design and integration services benefit from this contract. The contract supports the modernization and maintenance of critical IT infrastructure. Services are delivered within the District of Columbia, impacting federal operations in the capital. The contract likely supports a workforce of IT professionals and engineers employed by Lockheed Martin.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Long duration may reduce flexibility to adopt newer technologies or vendors.
High contract value warrants close monitoring for scope creep and cost overruns.

Positive Signals

Fixed-price contract shifts risk to the contractor.
Award to an experienced contractor suggests a focus on reliable service delivery.
Long-term nature provides stability for essential IT services.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on computer systems design services. This broad category encompasses a wide range of activities, from software development and system integration to IT consulting and infrastructure management. The federal IT market is substantial, with agencies consistently investing in maintaining and upgrading their technological capabilities. This contract represents a significant portion of spending within this niche for the General Services Administration.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Given the large scale and sole-source nature, it is unlikely that significant subcontracting opportunities for small businesses were mandated. The focus is on a prime contractor with extensive capabilities, rather than fostering small business participation through set-asides.

Oversight & Accountability

As a delivery order under a larger contract vehicle, oversight would typically be managed by the contracting officers at the General Services Administration. The fixed-price nature provides some level of financial oversight by limiting cost increases. Transparency is moderate, as the award details are public, but the specifics of performance and internal management are less visible without active oversight.

Related Government Programs

IT Professional Services
Cloud Computing Services
Software Development
Systems Integration
IT Consulting

Risk Flags

Sole-source award
Long contract duration
High total contract value

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $679.0 million to LOCKHEED MARTIN SERVICES, LLC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN SERVICES, LLC.

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $679.0 million.

What is the period of performance?

Start: 2000-12-15. End: 2010-11-30.

What specific IT systems design services were procured under this contract?

The data indicates the contract falls under the North American Industry Classification System (NAICS) code 541512, which covers Computer Systems Design Services. This typically includes designing, developing, and integrating hardware and software systems. Services could range from IT strategy and architecture, custom software development, system integration, IT project management, and potentially IT consulting related to system design. Without the full contract details, the precise scope of services remains general, but it points towards comprehensive support for GSA's IT infrastructure and application needs.

How does the $679 million contract value compare to typical IT spending for the GSA?

The $679 million awarded over nearly 10 years equates to an average annual spend of approximately $68 million for computer systems design services. To assess if this is typical, one would need to compare it against GSA's overall IT budget and historical spending on similar services. GSA manages a vast portfolio of IT services and infrastructure for the federal government. A $68 million annual average for a specific service category suggests a significant, but not necessarily disproportionate, investment, especially if it covers core IT functions or major modernization efforts. Further analysis would require GSA's total IT spending figures and breakdowns by service type.

What are the risks associated with a sole-source award of this magnitude and duration?

A sole-source award of this magnitude ($679 million over nearly 10 years) carries several risks. Primarily, the lack of competition means GSA may not have achieved the best possible pricing, as market forces driving down costs were absent. There's also a risk of vendor lock-in, where GSA becomes heavily reliant on Lockheed Martin, making it difficult and costly to switch providers or adopt alternative solutions. Furthermore, the long duration could lead to the procured systems or services becoming outdated before the contract ends, requiring costly modifications or workarounds. Effective contract management and performance monitoring are crucial to mitigate these risks.

What is the track record of Lockheed Martin Services, LLC in delivering IT services to the federal government?

Lockheed Martin Services, LLC, as part of the larger Lockheed Martin Corporation, has an extensive track record of delivering complex IT and defense-related services to the federal government. They are a major defense contractor with deep expertise in systems integration, software development, cybersecurity, and large-scale IT program management. Their experience often involves high-stakes, mission-critical systems. While specific performance data for this particular contract isn't provided, their general profile suggests a capacity to handle large, complex IT requirements. However, past performance on other contracts, including any issues or successes, would be a more direct indicator.

How does the fixed-price contract type impact performance and cost control?

The 'FIRM FIXED PRICE' (FFP) contract type is generally favored for well-defined requirements where the scope of work is clear. Under an FFP contract, the contractor (Lockheed Martin Services, LLC) assumes the primary risk for cost overruns. They are obligated to complete the work for the agreed-upon price, regardless of their actual costs. This incentivizes the contractor to manage their resources efficiently and control costs. For the government (GSA), it provides cost certainty. However, if the scope of work changes significantly, change orders will be necessary, which can increase the total contract price. Effective management is still required to ensure the contractor meets performance standards within the fixed price.

What are the potential implications of this contract on federal IT modernization efforts?

This contract, focused on computer systems design services, likely plays a role in GSA's IT modernization efforts by providing the foundational design and integration capabilities needed for new systems or upgrades. The long duration suggests it's intended to support ongoing modernization initiatives over an extended period. However, the sole-source nature and the specific technologies chosen by the contractor could also present challenges. If the contract doesn't explicitly incorporate flexibility for adopting emerging technologies or standards, it might inadvertently slow down modernization by locking GSA into specific architectures or platforms for the contract's lifespan.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 700 N FREDERICK AVE, GAITHERSBURG, MD, 20879

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $685,613,266

Exercised Options: $678,979,767

Current Obligation: $678,979,156

Parent Contract

Parent Award PIID: GS00T99ALD0205

IDV Type: GWAC

Timeline