EPA's $16.7M High Performance Computing Contract Awarded to Lockheed Martin Under Full and Open Competition

Contract Overview

Contract Amount: $16,687,003 ($16.7M)

Contractor: Lockheed Martin International

Awarding Agency: Environmental Protection Agency

Start Date: 2004-06-10

End Date: 2011-04-30

Contract Duration: 2,515 days

Daily Burn Rate: $6.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: HIGH PERFORMANCE COMPUTING AND VISUALIZATION SUPPORT

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20460, UNITED STATES OF AMERICA

State: District of Columbia Government Spending

Plain-Language Summary

Environmental Protection Agency obligated $16.7 million to LOCKHEED MARTIN INTERNATIONAL for work described as: HIGH PERFORMANCE COMPUTING AND VISUALIZATION SUPPORT Key points: 1. The contract aimed to provide essential computing and visualization support for environmental modeling and analysis. 2. Awarded under a full and open competition, suggesting a broad market search for qualified vendors. 3. The duration of the contract (over 7 years) indicates a long-term need for these specialized services. 4. The cost-plus-fixed-fee (CPFF) contract type can lead to cost overruns if not managed carefully. 5. The specific North American Industry Classification System (NAICS) code 541511 points to custom computer programming services. 6. The contract was awarded to Lockheed Martin, a large, established defense and technology contractor. 7. The contract's value of approximately $16.7 million over its term suggests a significant investment in advanced computing capabilities.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable contract data. The CPFF structure, while allowing for flexibility, carries inherent risks of cost escalation. The total value of $16.7 million over more than seven years averages to roughly $2.3 million annually, which for high-performance computing and visualization support, appears within a reasonable range for complex government needs. However, a detailed cost breakdown and comparison to industry standards for similar services would be necessary for a more definitive assessment of value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through a full and open competition, indicating that the EPA sought proposals from all responsible sources. The presence of 5 bids suggests a competitive environment, though the exact number of bidders does not inherently guarantee the best price. A full and open competition is generally the preferred method for ensuring fair pricing and access to a wide range of innovative solutions.

Taxpayer Impact: A full and open competition maximizes the potential for competitive pricing, which benefits taxpayers by ensuring the government receives the best possible value for its investment in critical IT infrastructure and services.

Public Impact

Environmental scientists and researchers benefit from advanced computing power for complex modeling and data analysis. The services delivered support the EPA's mission to protect human health and the environment. The contract's impact is national, enabling data-driven environmental policy and regulatory development. Workforce implications include the need for specialized IT professionals skilled in high-performance computing and visualization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can incentivize contractors to incur costs, potentially leading to higher final prices than anticipated if not closely monitored.
The long contract duration (over 7 years) increases the risk of technological obsolescence or changing requirements not being adequately addressed.
Lack of specific performance metrics in the provided data makes it difficult to assess the true effectiveness and efficiency of the services rendered.

Positive Signals

Awarded through full and open competition, suggesting a robust process to identify qualified vendors and competitive pricing.
The contract supports critical EPA functions related to environmental protection and scientific research.
Lockheed Martin is a large, experienced contractor with a significant presence in government IT services, implying a degree of reliability.

Sector Analysis

The contract falls within the Information Technology sector, specifically focusing on custom computer programming services (NAICS 541511). This category includes the design, development, and implementation of customized software and IT solutions. The market for high-performance computing (HPC) and visualization support is specialized, serving organizations with intensive data processing needs, such as government agencies involved in scientific research, modeling, and simulation. Spending in this area is crucial for advancing scientific discovery and enabling complex analytical tasks.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large contract awarded to a major prime contractor, Lockheed Martin, the primary impact on small businesses would likely be through subcontracting opportunities. Without specific subcontracting plans or data, it's difficult to assess the extent to which small businesses participated in fulfilling the contract requirements. However, large prime contractors often utilize small businesses for specialized services.

Oversight & Accountability

Oversight for this contract would typically be managed by the Environmental Protection Agency (EPA) contracting officers and program managers. The contract type (CPFF) necessitates diligent oversight to ensure costs are reasonable and allocable, and that the fixed fee is earned. Transparency would be facilitated through contract reporting requirements and potentially through the EPA's Inspector General's office, which investigates fraud, waste, and abuse in agency programs. The specific mechanisms for accountability would be detailed in the contract's terms and conditions.

Related Government Programs

Environmental Modeling Services
High-Performance Computing Infrastructure
Scientific Data Visualization
Custom Software Development
EPA IT Support Contracts

Risk Flags

Cost-plus-fixed-fee contract type carries inherent risk of cost overruns.
Long contract duration may lead to technology obsolescence.
Limited public data on specific performance metrics makes value assessment difficult.

Frequently Asked Questions

What is this federal contract paying for?

Environmental Protection Agency awarded $16.7 million to LOCKHEED MARTIN INTERNATIONAL. HIGH PERFORMANCE COMPUTING AND VISUALIZATION SUPPORT

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN INTERNATIONAL.

Which agency awarded this contract?

Awarding agency: Environmental Protection Agency (Environmental Protection Agency).

What is the total obligated amount?

The obligated amount is $16.7 million.

What is the period of performance?

Start: 2004-06-10. End: 2011-04-30.

What was the specific nature of the 'High Performance Computing and Visualization Support' provided under this contract?

The contract aimed to provide comprehensive support for the Environmental Protection Agency's (EPA) high-performance computing (HPC) and visualization needs. This likely encompassed services such as managing and maintaining HPC clusters, optimizing computational tasks for environmental modeling (e.g., climate, air quality, water pollution), developing and customizing visualization software to interpret complex datasets, and providing technical expertise to EPA scientists and researchers. The goal was to enhance the agency's capacity for advanced scientific analysis, simulation, and data-driven decision-making in environmental protection.

How does the $16.7 million contract value compare to similar EPA contracts for IT support?

Comparing the $16.7 million value requires context regarding the specific IT services procured and the contract duration. This contract, spanning over seven years (June 2004 to April 2011), averaged approximately $2.3 million annually. For specialized services like high-performance computing and custom programming, this annual figure is not exceptionally high, especially considering the complexity and infrastructure involved. However, without access to a database of comparable EPA IT contracts with similar scopes and durations, a precise benchmark is difficult. Generally, IT support contracts for large federal agencies can range from hundreds of thousands to tens of millions of dollars annually, depending on the services.

What were the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type used for this award?

The primary risk of a Cost Plus Fixed Fee (CPFF) contract is that the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure can incentivize the contractor to incur costs, as their profit margin is fixed regardless of the total cost. If cost overruns occur due to inefficiencies, scope creep, or poor estimation, the government bears the financial burden of these increased costs. Effective oversight by the contracting agency is crucial to manage these risks, ensuring that all costs are reasonable, allocable, and necessary for contract performance, and that the fixed fee adequately compensates the contractor for the effort.

What does the contractor's track record, Lockheed Martin, suggest about the likely performance of this contract?

Lockheed Martin is a major aerospace, defense, security, and advanced technologies company with extensive experience in providing IT and complex technical services to government agencies. Their track record suggests a high likelihood of possessing the technical expertise, resources, and project management capabilities necessary to perform this contract successfully. As a large, established entity, they are generally expected to adhere to contractual requirements and deliver services reliably. However, past performance on specific contracts can vary, and rigorous oversight by the EPA would still be essential to ensure optimal outcomes and value.

How did the competition level (5 bidders) influence the pricing and value received by the EPA?

Having five bidders for this contract indicates a reasonably competitive marketplace for high-performance computing and visualization support services. A higher number of bidders generally increases the likelihood of receiving competitive pricing, as companies vie for the contract. While five bidders suggest that the EPA cast a wide net and likely received multiple proposals, the ultimate impact on price and value depends on the quality of the proposals submitted and the specific evaluation criteria used. A competitive process helps ensure that the chosen contractor's pricing is justifiable and that the EPA is likely obtaining good value for the services rendered, compared to a sole-source or limited competition scenario.

What are the potential implications of this contract on the broader IT services market, particularly for custom computer programming?

This contract, by awarding a significant sum to Lockheed Martin for custom computer programming and HPC support, signals the government's continued demand for specialized IT solutions. It reinforces the market position of large, established IT providers capable of handling complex, long-term projects. For the custom computer programming sub-sector, it highlights the value placed on tailored software development for scientific and analytical purposes. While this specific award went to a large prime, it could indirectly stimulate the market by creating subcontracting opportunities for smaller, specialized firms, and by setting performance standards that other companies in the sector aim to meet.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 5

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 2339 ROUTE 70 WEST, FLOOR 3W, CHERRY HILL, NJ, 08002

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $18,450,965

Exercised Options: $18,450,965

Current Obligation: $16,687,003

Parent Contract

Parent Award PIID: EPW04005

IDV Type: IDC

Timeline