DOT awards $1.86B for air traffic control services over 12 years, with Lockheed Martin as prime
Contract Overview
Contract Amount: $1,865,584,343 ($1.9B)
Contractor: Leidos, Inc.
Awarding Agency: Department of Transportation
Start Date: 2005-02-01
End Date: 2019-09-20
Contract Duration: 5,344 days
Daily Burn Rate: $349.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIXED PRICE INCENTIVE
Sector: Other
Official Description: PROVIDE FUNDING FOR CLIN 302 FOR PRE-FLIGHT AND IN-FLIGHT SERVICES. CONTRACT NUMBER DTFAWA-05-C-00031, LOCKHEED MARTIN. POP 01/16/08-03/31/08.
Place of Performance
Location: CHERRY HILL, CAMDEN County, NEW JERSEY, 08002
Plain-Language Summary
Department of Transportation obligated $1.87 billion to LEIDOS, INC. for work described as: PROVIDE FUNDING FOR CLIN 302 FOR PRE-FLIGHT AND IN-FLIGHT SERVICES. CONTRACT NUMBER DTFAWA-05-C-00031, LOCKHEED MARTIN. POP 01/16/08-03/31/08. Key points: 1. Contract awarded for critical pre-flight and in-flight services, ensuring air traffic safety. 2. Long-term contract duration of over 12 years suggests a need for sustained support. 3. Fixed Price Incentive contract type aims to balance cost control with performance. 4. Significant funding indicates a high-stakes program with substantial operational impact. 5. Awarded to a single prime contractor, highlighting the complexity and scale of services required. 6. Geographic focus on New Jersey for specific operational support.
Value Assessment
Rating: fair
The total award amount of $1.86 billion over more than 12 years represents a substantial investment in air traffic control infrastructure. Benchmarking this value is challenging without specific service metrics and comparable contracts for similar pre-flight and in-flight services. The Fixed Price Incentive (FPI) contract type suggests an effort to manage costs while incentivizing performance, but the final value can fluctuate based on achieved targets. The long duration implies a stable, albeit potentially costly, commitment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to compete for this significant award. The presence of multiple bidders generally fosters price discovery and can lead to more competitive pricing. However, the specific number of bids received is not provided, which would offer further insight into the intensity of the competition.
Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it increases the likelihood of obtaining services at a fair market price through competitive bidding.
Public Impact
Benefits the Federal Aviation Administration (FAA) by providing essential services for air traffic management. Ensures the safety and efficiency of air travel for millions of passengers and cargo operations. Supports critical pre-flight and in-flight functions necessary for the National Airspace System. Impacts the aviation workforce through employment opportunities within Lockheed Martin and its subcontractors. Geographic impact primarily focused on operations within New Jersey.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration could lead to potential cost overruns if not managed effectively.
- Reliance on a single prime contractor for critical services poses a risk if performance falters.
- Fixed Price Incentive contracts can be complex to administer and may lead to disputes over performance metrics.
Positive Signals
- Awarded through full and open competition, suggesting a competitive pricing environment.
- The sustained funding indicates a recognized need for these essential aviation services.
- The long-term nature of the contract provides stability for service delivery.
Sector Analysis
This contract falls within the broader aerospace and defense sector, specifically supporting air transportation infrastructure. The Federal Aviation Administration (FAA) is a major procurer of services and technology to maintain and modernize the National Airspace System. Spending in this area is critical for national security, economic activity, and public safety. Comparable spending benchmarks would typically involve other large-scale IT and support service contracts for critical infrastructure management.
Small Business Impact
The data indicates that small business participation was not a primary focus for this specific contract, as the 'sb' field is false. There is no explicit mention of small business set-asides or subcontracting plans. This suggests that the prime contractor, Lockheed Martin, likely managed the majority of the work internally or with large business partners, potentially limiting direct opportunities for small businesses within this particular award.
Oversight & Accountability
Oversight for this contract would primarily reside with the Department of Transportation's Office of Inspector General (OIG) and the Federal Aviation Administration (FAA) contracting officers. Mechanisms likely include regular performance reviews, audits, and adherence to contract milestones. Transparency is generally maintained through contract award databases and reporting requirements, though specific performance data may be sensitive.
Related Government Programs
- Air Traffic Control Modernization Programs
- Aviation Systems Engineering Support
- National Airspace System Operations
- Defense Logistics and Support Services
Risk Flags
- Long-term contract dependency
- Potential for cost overruns in FPI contracts
- Single point of failure risk with one prime contractor
Tags
department-of-transportation, federal-aviation-administration, air-transportation, definitive-contract, fixed-price-incentive, full-and-open-competition, large-contract, long-term-contract, it-support, new-jersey, lockheed-martin
Frequently Asked Questions
What is this federal contract paying for?
Department of Transportation awarded $1.87 billion to LEIDOS, INC.. PROVIDE FUNDING FOR CLIN 302 FOR PRE-FLIGHT AND IN-FLIGHT SERVICES. CONTRACT NUMBER DTFAWA-05-C-00031, LOCKHEED MARTIN. POP 01/16/08-03/31/08.
Who is the contractor on this award?
The obligated recipient is LEIDOS, INC..
Which agency awarded this contract?
Awarding agency: Department of Transportation (Federal Aviation Administration).
What is the total obligated amount?
The obligated amount is $1.87 billion.
What is the period of performance?
Start: 2005-02-01. End: 2019-09-20.
What specific pre-flight and in-flight services are covered under this contract?
The contract DTFAWA-05-C-00031, awarded to Lockheed Martin, focuses on providing 'pre-flight and in-flight services' for CLIN 302. While the exact technical specifications are not detailed in the provided data, these services typically encompass a range of critical functions for air traffic management. Pre-flight services could include system maintenance, software updates, data processing, and readiness checks for air traffic control systems. In-flight services would likely involve real-time operational support, monitoring, and potentially immediate response to system anomalies or performance issues that arise during active air traffic control operations. The substantial funding suggests these are complex, mission-critical services essential for the safe and efficient operation of the National Airspace System.
How does the Fixed Price Incentive (FPI) contract type function in this context?
The Fixed Price Incentive (FPI) contract type is designed to share the risks and rewards between the government and the contractor. In this scenario, there's a target cost and a target profit. If the final cost is lower than the target cost, both the government and the contractor share in the savings according to a pre-negotiated formula. Conversely, if the final cost exceeds the target cost, the contractor's profit is reduced, and the government's share of the cost increases up to a ceiling price. This structure incentivizes Lockheed Martin to control costs while meeting performance specifications for the pre-flight and in-flight services. The effectiveness of the FPI relies heavily on the accuracy of the initial cost estimates and the clarity of the performance metrics.
What is the significance of the long contract duration (over 12 years)?
The extended duration of over 12 years for this contract (from 2008 to 2019) signifies a long-term strategic commitment by the Department of Transportation to secure these specific pre-flight and in-flight services. Such long-term awards are often associated with complex systems requiring sustained development, maintenance, and operational support, or where the cost and effort of transitioning to a new provider would be prohibitive. It suggests that the services are fundamental to the FAA's ongoing operations and that stability in service provision is a key requirement. This duration also allows for potential integration of evolving technologies and operational needs over the contract's life.
What are the potential risks associated with a single prime contractor for such a critical service?
Having a single prime contractor like Lockheed Martin for critical air traffic control services presents several potential risks. Firstly, there's a risk of vendor lock-in, where the government becomes heavily reliant on one provider, potentially reducing leverage in future negotiations. Secondly, if the contractor experiences performance issues, financial instability, or strategic shifts, it could significantly disrupt essential services. Thirdly, a lack of direct competition throughout the contract life might reduce the incentive for continuous innovation or cost optimization compared to a more competitive environment. Robust oversight, clear performance metrics, and contingency planning are crucial to mitigate these risks.
How does this contract compare to other FAA spending on air traffic management systems?
This contract, with a total value of approximately $1.86 billion, represents a significant portion of the FAA's spending on critical operational support. The FAA invests heavily in modernizing and maintaining the National Airspace System (NAS), which includes NextGen initiatives, radar systems, communication infrastructure, and software development. While specific comparisons require detailed breakdowns of service categories, this award for pre-flight and in-flight services is substantial and likely covers essential functions that underpin the entire air traffic management ecosystem. It's comparable in scale to other major system development or long-term sustainment contracts within the FAA's portfolio.
Industry Classification
NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation
Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 3
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc. (UEI: 611641312)
Address: 700 N FREDERICK AVE, GAITHERSBURG, MD, 20879
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $6,884,435,160
Exercised Options: $2,177,363,030
Current Obligation: $1,865,584,343
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Timeline
Start Date: 2005-02-01
Current End Date: 2019-09-20
Potential End Date: 2019-09-20 00:00:00
Last Modified: 2018-05-01
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