DOT's $157M contract for communications equipment manufacturing awarded to Lockheed Martin Services, LLC

Contract Overview

Contract Amount: $156,778,785 ($156.8M)

Contractor: Lockheed Martin Services, LLC

Awarding Agency: Department of Transportation

Start Date: 1997-04-17

End Date: 2018-03-06

Contract Duration: 7,628 days

Daily Burn Rate: $20.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: DAFIS UDO RECONSTRUCT W/O ADVANCE

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Transportation obligated $156.8 million to LOCKHEED MARTIN SERVICES, LLC for work described as: DAFIS UDO RECONSTRUCT W/O ADVANCE Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. Long contract duration of over 20 years may indicate a need for sustained services or evolving requirements. 3. The contract type (Cost Plus Fixed Fee) can lead to cost overruns if not managed carefully. 4. Awarded to a large, established contractor, potentially limiting opportunities for smaller, specialized firms. 5. The specific product/service category is 'Other Communications Equipment Manufacturing', which is broad and requires further definition. 6. The contract was awarded in 1997 and expired in 2018, indicating historical spending rather than current. 7. No small business set-aside was utilized, suggesting the primary awardee was not a small business.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its age and the broad 'Other Communications Equipment Manufacturing' category. The Cost Plus Fixed Fee (CPFF) contract type, while allowing for flexibility, historically carries a higher risk of cost escalation compared to fixed-price contracts. Without specific performance metrics or detailed cost breakdowns, it's difficult to definitively assess value for money. However, the long duration suggests a sustained need that the government deemed worth fulfilling through this award.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. The number of bidders is not specified, but this method generally promotes price discovery and allows the government to select the best value offer. The long period between award and completion suggests that the initial competition may have been robust, but the market dynamics for communications equipment could have shifted significantly over the contract's lifespan.

Taxpayer Impact: A competitive award process helps ensure that taxpayer dollars are used efficiently by driving down prices and encouraging innovation among potential bidders.

Public Impact

The Federal Aviation Administration (FAA) likely benefited from this contract by acquiring necessary communications equipment to support its operations. The services delivered were related to the manufacturing of 'Other Communications Equipment,' crucial for maintaining and upgrading communication infrastructure. The geographic impact is likely national, given the FAA's role in overseeing air traffic control and aviation safety across the United States. The workforce implications would primarily affect the contractor's employees involved in the manufacturing and potentially support of the communications equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can lead to higher costs than fixed-price contracts if not managed diligently.
The long contract duration (over 20 years) may indicate potential for scope creep or evolving requirements that could increase overall expenditure.
The broad category of 'Other Communications Equipment Manufacturing' makes it difficult to assess the specific value and necessity of the procured items.
Lack of specific details on competition level (number of bidders) limits a full assessment of price discovery effectiveness.

Positive Signals

Awarded through 'full and open competition,' suggesting a robust initial bidding process.
The contract was awarded to a large, established entity (Lockheed Martin Services, LLC), which may imply reliability and proven performance.
The sustained nature of the contract over two decades suggests a consistent need for the equipment or services provided.

Sector Analysis

The 'Other Communications Equipment Manufacturing' sector is diverse, encompassing a wide range of products from basic components to complex systems. Federal spending in this area often supports critical infrastructure for agencies like the FAA. Comparable spending benchmarks are difficult to establish without knowing the specific type of equipment. However, the federal government is a significant purchaser of communication technologies, driving innovation and market demand.

Small Business Impact

The contract was not awarded as a small business set-aside, and the primary contractor is Lockheed Martin Services, LLC, a large corporation. This suggests that small businesses were likely not the primary beneficiaries of the prime contract. There is no information provided on subcontracting plans or actual subcontracting to small businesses, which could have offered opportunities for smaller firms to participate in fulfilling the contract requirements.

Oversight & Accountability

Oversight for this contract would have been managed by the Department of Transportation's Federal Aviation Administration. As a Cost Plus Fixed Fee contract, rigorous financial oversight and performance monitoring would be crucial to ensure cost control and adherence to the fixed fee. Transparency would depend on the agency's reporting practices and the public availability of contract details. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Aviation Administration Communications Systems
Department of Transportation Procurement
Defense Communications Equipment Contracts
Information Technology Manufacturing Contracts

Risk Flags

Long contract duration may indicate potential for cost overruns or evolving needs.
Cost Plus Fixed Fee contract type carries inherent risk of cost escalation.
Broad 'Other Communications Equipment Manufacturing' category lacks specificity for detailed value assessment.
Lack of bidder count limits assessment of competition effectiveness.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $156.8 million to LOCKHEED MARTIN SERVICES, LLC. DAFIS UDO RECONSTRUCT W/O ADVANCE

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN SERVICES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $156.8 million.

What is the period of performance?

Start: 1997-04-17. End: 2018-03-06.

What specific types of communications equipment were manufactured under this contract?

The contract falls under the broad category of 'Other Communications Equipment Manufacturing.' Without more granular data, it is impossible to specify the exact types of equipment. This could range from radio communication devices, navigation aids, air traffic control systems components, to specialized data transmission hardware. The 'Other' classification suggests it did not fit neatly into more defined PSC codes. Further investigation into the contract's statement of work or specific line items would be necessary to identify the precise nature of the manufactured goods.

How did the final cost compare to the initial estimated cost, given the CPFF structure?

Determining the final cost relative to the initial estimate for this Cost Plus Fixed Fee (CPFF) contract requires access to detailed contract modification history and final expenditure reports. CPFF contracts allow the contractor to recover all allowable costs plus a fixed fee representing profit. While the fee is fixed, the total cost can fluctuate. Without specific data on the contract's baseline estimate and its final obligated amount, a direct comparison is not possible. Historically, CPFF contracts necessitate vigilant oversight to manage cost growth effectively.

What was the competitive landscape like for 'Other Communications Equipment Manufacturing' during the bid period (circa 1997)?

In 1997, the 'Other Communications Equipment Manufacturing' sector was likely characterized by a mix of established defense contractors and emerging technology firms. The Federal Aviation Administration's needs for reliable, long-term communication systems would have attracted bidders capable of meeting stringent performance and durability standards. The 'full and open competition' award suggests multiple entities were interested, but the specific number of bidders and their profiles (e.g., large vs. small businesses, technological specialization) would provide a clearer picture of the competitive intensity and potential for price innovation at that time.

What performance metrics were used to evaluate Lockheed Martin Services, LLC's delivery under this contract?

Performance metrics for a contract of this nature, spanning over two decades and involving equipment manufacturing, would typically include adherence to specifications, quality control standards, delivery schedules, and potentially reliability and maintainability of the manufactured equipment. Specific metrics would be detailed in the contract's Statement of Work (SOW) and Quality Assurance Surveillance Plan (QASP). Without access to these documents, the precise performance benchmarks remain unknown. However, for FAA-related equipment, stringent reliability and operational readiness metrics are usually paramount.

How does this contract's duration compare to typical federal contracts for similar equipment manufacturing?

A contract duration of over 20 years (from 1997 to 2018) is exceptionally long for a manufacturing contract, especially for potentially evolving technology like communications equipment. Typical federal contracts for manufacturing often have shorter durations, perhaps 1-5 years, with options for renewal or follow-on contracts. Such extended periods might indicate a requirement for long-term sustainment, obsolescence management, or a phased production approach. It could also reflect a lack of subsequent competitive procurements for updated systems over a significant timeframe.

Were there any significant contract modifications or disputes throughout the contract's lifecycle?

Information regarding significant contract modifications or disputes is not readily available in the provided data summary. Long-duration contracts, particularly those awarded under CPFF terms, often undergo numerous modifications to adjust scope, funding, or timelines. Disputes can arise from disagreements over cost allowability, performance, or contract interpretation. A comprehensive review of the contract's official modification history (e.g., SF30 forms) and any associated litigation or claims records would be necessary to identify such events.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Other Communications Equipment Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 9211 CORPORATE BLVD, ROCKVILLE, MD, 20850

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

Financial Breakdown

Contract Ceiling: $14,942,059,382

Exercised Options: $554,250,130

Current Obligation: $156,778,785

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline