Lockheed Martin awarded $433.8M contract for administrative management and consulting services by the Department of Transportation

Contract Overview

Contract Amount: $433,806,301 ($433.8M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Transportation

Start Date: 2008-02-21

End Date: 2011-02-28

Contract Duration: 1,103 days

Daily Burn Rate: $393.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: THIS PR WILL FUND THE FY08 NISC CONTRACT DTFAWA-08-C-00009/TASK AMC-08-06 SUB TASK A- FORM 337- 300K SUB TASK B- EFORMS- 650K ----------------------------------------------- TOTAL 950K

Place of Performance

Location: CHERRY HILL, CAMDEN County, NEW JERSEY, 08002, UNITED STATES OF AMERICA

State: New Jersey Government Spending

Plain-Language Summary

Department of Transportation obligated $433.8 million to LOCKHEED MARTIN CORPORATION for work described as: THIS PR WILL FUND THE FY08 NISC CONTRACT DTFAWA-08-C-00009/TASK AMC-08-06 SUB TASK A- FORM 337- 300K SUB TASK B- EFORMS- 650K ----------------------------------------------- TOTAL 950K Key points: 1. Contract awarded to a large, established defense contractor, suggesting a focus on complex, long-term needs. 2. Full and open competition indicates a broad market search, potentially leading to competitive pricing. 3. The contract's duration of over three years suggests a significant and ongoing requirement for services. 4. The specific NAICS code (541611) points to a need for specialized management consulting expertise. 5. Awarding agency is the Federal Aviation Administration, implying services are critical to aviation operations. 6. The contract type (Cost Plus Award Fee) incentivizes performance while allowing for cost flexibility. 7. The contract was awarded in 2008, providing historical context for current spending patterns.

Value Assessment

Rating: good

The total award amount of $433.8 million over approximately three years for administrative management and general management consulting services appears substantial. Benchmarking this against similar large-scale government consulting contracts is difficult without more specific service details. However, the full and open competition suggests an effort to achieve value for money by soliciting bids from a wide range of qualified contractors. The Cost Plus Award Fee structure allows for performance-based incentives, which can drive efficiency and effectiveness, potentially enhancing value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. The number of bidders is not specified in the provided data, but the nature of full and open competition generally implies a robust bidding process. This level of competition is intended to foster price discovery and ensure that the government receives competitive pricing for the services required.

Taxpayer Impact: Taxpayers benefit from full and open competition through the potential for lower prices and higher quality services due to a wider pool of bidders vying for the contract.

Public Impact

The primary beneficiaries are likely the Federal Aviation Administration (FAA) and its operational divisions, receiving critical administrative and management support. Services delivered are expected to enhance the efficiency and effectiveness of FAA's administrative functions and management strategies. The contract's performance is geographically centered within the United States, supporting FAA operations nationwide. The contract may indirectly impact the federal workforce by potentially augmenting existing capabilities or requiring specialized contractor personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee contracts can sometimes lead to cost overruns if not managed diligently, as the contractor is reimbursed for costs plus a fee based on performance.
The long duration of the contract could lead to vendor lock-in if not periodically re-evaluated for competitive alternatives.
Reliance on a single large contractor for critical administrative functions might pose a risk if the contractor faces financial or operational difficulties.

Positive Signals

Full and open competition is a positive signal, indicating a commitment to leveraging market forces for best value.
The Cost Plus Award Fee structure incentivizes contractor performance, aligning their goals with the agency's objectives.
The contract's award to a well-established entity like Lockheed Martin suggests a degree of confidence in their capability to deliver complex services.

Sector Analysis

The administrative management and general management consulting services sector is a significant part of the federal contracting landscape, supporting a wide array of government functions. This contract falls within a broad category of professional services that agencies utilize to improve operations, implement policies, and manage complex projects. Comparable spending in this sector can vary widely depending on the specific agency and the scope of services, but it consistently represents a substantial portion of federal expenditures.

Small Business Impact

The provided data indicates that small business participation (sb) was false and there was no small business set-aside (ss). This suggests that the contract was not specifically targeted towards small businesses. While Lockheed Martin is a large corporation, there may be opportunities for small businesses to subcontract, but this contract does not appear to directly benefit the small business ecosystem through a set-aside provision.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Transportation and the Federal Aviation Administration. The Cost Plus Award Fee structure necessitates robust performance monitoring to ensure award fees are justified. Transparency would be expected through contract reporting mechanisms and potentially through Freedom of Information Act requests, though specific details of performance and costs might be sensitive. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal IT Consulting Services
Government Management Consulting
Professional Services Contracts
Department of Transportation Contracts
Federal Aviation Administration Support

Risk Flags

Potential for cost overruns inherent in Cost Plus contract types.
Risk of vendor lock-in due to long contract duration.
Need for robust performance monitoring to justify award fees.
Reliance on contractor expertise may reduce internal agency capacity over time.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $433.8 million to LOCKHEED MARTIN CORPORATION. THIS PR WILL FUND THE FY08 NISC CONTRACT DTFAWA-08-C-00009/TASK AMC-08-06 SUB TASK A- FORM 337- 300K SUB TASK B- EFORMS- 650K ----------------------------------------------- TOTAL 950K

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $433.8 million.

What is the period of performance?

Start: 2008-02-21. End: 2011-02-28.

What is the historical spending trend for administrative management and general management consulting services within the Federal Aviation Administration?

Analyzing the historical spending trend for administrative management and general management consulting services within the Federal Aviation Administration (FAA) requires access to detailed historical contract databases. The provided data point for the FY08 NISC contract ($433.8M) offers a snapshot from that period. To establish a trend, one would need to examine spending on similar NAICS codes (like 541611) across multiple fiscal years. Factors influencing this trend could include shifts in agency priorities, budget allocations, major program initiatives (e.g., NextGen air traffic control modernization), and changes in contracting strategies (e.g., increased use of full-service contracts versus specialized task orders). Without a broader dataset, it's challenging to definitively characterize the trend, but large contracts like this suggest a consistent need for significant external expertise in management and administration within the FAA.

How does the Cost Plus Award Fee (CPAF) structure typically impact contractor performance and final costs compared to other contract types for similar services?

The Cost Plus Award Fee (CPAF) contract type aims to balance cost reimbursement with performance incentives. In CPAF, the contractor is reimbursed for all allowable costs incurred, plus a base fee that is a fixed percentage of the estimated cost. Additionally, there is an award fee, determined by the government based on the contractor's performance against pre-defined criteria. This structure incentivizes the contractor to exceed minimum performance standards to earn a higher award fee, potentially leading to better outcomes and value. Compared to Firm-Fixed-Price (FFP) contracts, CPAF offers more flexibility for the government when requirements are not fully defined or are expected to evolve, reducing the risk of scope creep issues inherent in FFP. However, compared to Cost Plus Fixed Fee (CPFF), CPAF adds a performance-based incentive layer. The primary risk with CPAF is that if performance metrics are poorly defined or the government's evaluation process is flawed, costs could still escalate without commensurate value, or the award fee might not accurately reflect true performance. Diligent oversight and clear performance metrics are crucial for CPAF to be effective.

What specific administrative management and general management consulting services were likely included under this $433.8M contract for the FAA?

Given the NAICS code 541611 (Administrative Management and General Management Consulting Services) and the awarding agency (Federal Aviation Administration - FAA), the services under this $433.8 million contract likely encompassed a broad range of strategic, operational, and administrative support. This could include areas such as organizational structure analysis and redesign, strategic planning and policy development, process improvement initiatives (e.g., for air traffic control operations, safety management, or regulatory compliance), human capital management consulting, financial management advisory, IT strategy and implementation support, and program management support for major FAA initiatives. The 'NISC' designation might refer to a specific program or system, suggesting the consulting could be tied to the National Airspace System or related infrastructure. The breakdown mentioning 'FORM 337' and 'EFORMS' suggests specific administrative processes or systems were targeted for improvement or management.

What is Lockheed Martin Corporation's general track record in providing administrative and management consulting services to the federal government?

Lockheed Martin Corporation, primarily known for its defense and aerospace capabilities, also has a significant presence in providing professional and management services to the federal government across various agencies. Their track record in administrative and management consulting, while perhaps less publicized than their hardware or systems integration work, is substantial. They often leverage their expertise in large-scale program management, systems engineering, and complex project execution to offer consulting services. This includes areas like organizational transformation, process optimization, strategic planning, and IT modernization support. Their extensive experience managing large, complex government contracts suggests a capacity to handle significant consulting engagements. However, the nature and success of these consulting services can vary, and like any large contractor, their performance is subject to specific contract requirements and government oversight.

How does the contract duration of over three years (1103 days) influence the potential risks and benefits for the FAA?

A contract duration of over three years (1103 days) for administrative management and general management consulting services presents both potential risks and benefits for the FAA. Benefits include continuity of service, allowing for the deep integration of the contractor's expertise into ongoing operations and strategic initiatives. This long-term engagement can foster institutional knowledge within the contractor team, leading to more effective and tailored solutions. It also reduces the administrative burden and cost associated with frequent re-competition. However, risks include potential vendor lock-in, where the FAA becomes overly reliant on a single provider, potentially stifling innovation or leading to complacency. Market conditions and technological advancements could shift significantly over three years, making the contracted services or approach less optimal. Furthermore, if the contractor's performance falters, the long duration makes it more difficult and costly to transition to a new provider. Effective contract management, including regular performance reviews and clear exit strategies, is crucial to mitigate these risks.

What does the 'COST PLUS AWARD FEE' (PT: COST PLUS AWARD FEE) contract type imply about the nature of the work and the government's expectations?

The 'Cost Plus Award Fee' (CPAF) contract type signifies that the government expects to reimburse the contractor (Lockheed Martin) for all legitimate, direct, and indirect costs incurred in performing the work, plus a base fee. Crucially, it includes an additional 'award fee' component, which is determined by the government based on the contractor's performance against specific, pre-defined criteria. This implies the government has a clear vision of desired outcomes and performance standards but acknowledges that the exact path to achieving them might involve some uncertainty or require flexibility. It suggests the work is complex, potentially involving innovation or evolving requirements where a fixed price might be inappropriate or too risky. The CPAF structure incentivizes the contractor to go beyond minimum acceptable performance to earn the higher award fee, aligning the contractor's profit motive with the government's desire for exceptional results in administrative management and consulting services.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

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: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 2339 ROUTE 70 W, CHERRY HILL, NJ, 08002

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $16,693,338,039

Exercised Options: $433,806,301

Current Obligation: $433,806,301

Timeline