EPA's $13.2M High Performance Computing contract awarded to Lockheed Martin, spanning 7 years

Contract Overview

Contract Amount: $13,205,638 ($13.2M)

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: $5.3K/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 PROJECTS/DOCUMENTATION SUPPORT

Place of Performance

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

State: New Jersey Government Spending

Plain-Language Summary

Environmental Protection Agency obligated $13.2 million to LOCKHEED MARTIN INTERNATIONAL for work described as: HIGH PERFORMANCE COMPUTING AND VISUALIZATION PROJECTS/DOCUMENTATION SUPPORT Key points: 1. Contract awarded through full and open competition, suggesting a robust market. 2. Cost Plus Fixed Fee pricing structure may incentivize cost overruns if not closely monitored. 3. Long contract duration (7 years) indicates a sustained need for these services. 4. The North American Industry Classification System (NAICS) code 541511 points to custom computer programming services. 5. Performance context is crucial given the long-term nature and specialized IT support required. 6. Sector positioning within Environmental Protection Agency IT infrastructure is key to understanding its strategic importance.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable contract data. The Cost Plus Fixed Fee (CPFF) structure, while common for complex IT projects, carries inherent risks of cost escalation. The total award value of $13.2 million over seven years averages to approximately $1.89 million annually, which needs to be assessed against the scope and complexity of high-performance computing and visualization support. Without detailed breakdowns of labor categories, rates, and overhead, a precise value-for-money assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of 5 bids suggests a competitive marketplace for these specialized IT services. A competitive process generally leads to better price discovery and potentially more favorable terms for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: Taxpayers benefit from a competitive award process as it typically drives down prices and encourages innovation among bidders, ensuring the government receives the best possible value for its investment.

Public Impact

The Environmental Protection Agency (EPA) benefits from enhanced high-performance computing and visualization capabilities. Services delivered include crucial support for complex data analysis and modeling related to environmental science. Geographic impact is national, supporting EPA's mission across all regions. Workforce implications include the need for specialized IT personnel within the EPA or its contractors to manage and utilize these advanced systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) pricing can lead to higher costs if not managed diligently.
Long contract duration may reduce flexibility to adopt newer technologies if requirements evolve.
Dependence on a single contractor for critical IT infrastructure over an extended period poses a risk.

Positive Signals

Awarded through full and open competition, indicating a healthy market and potential for competitive pricing.
The contract addresses a critical need for high-performance computing within the EPA.
Long-term nature suggests stability and continuity of essential services.

Sector Analysis

This contract falls within the IT services sector, specifically custom computer programming and support for high-performance computing (HPC). The HPC market is a specialized segment focused on providing powerful computational resources for complex simulations, data analysis, and modeling. The EPA's use of HPC is critical for environmental research, climate modeling, and regulatory analysis. Comparable spending benchmarks would involve looking at other federal agencies' investments in similar HPC infrastructure and support services, which can range from millions to tens of millions annually depending on the agency's mission and data processing needs.

Small Business Impact

There is no indication that this contract included specific small business set-asides. The award to Lockheed Martin, a large defense and aerospace contractor, suggests that small businesses were likely not the primary awardees. However, opportunities may exist for small businesses to participate as subcontractors to the prime contractor, depending on the subcontracting plan negotiated.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the EPA. Performance reviews, regular reporting requirements, and audits are standard mechanisms to ensure accountability and transparency. The Inspector General's office at the EPA may also conduct audits or investigations into contract performance and financial management if concerns arise.

Related Government Programs

EPA IT Modernization Projects
Federal High-Performance Computing Initiatives
Environmental Data Analytics Contracts
Custom Software Development Services

Risk Flags

Cost Plus Fixed Fee (CPFF) pricing requires diligent oversight to manage costs.
Long contract duration may lead to technological obsolescence.
Potential for vendor lock-in over the 7-year period.

Frequently Asked Questions

What is this federal contract paying for?

Environmental Protection Agency awarded $13.2 million to LOCKHEED MARTIN INTERNATIONAL. HIGH PERFORMANCE COMPUTING AND VISUALIZATION PROJECTS/DOCUMENTATION 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 $13.2 million.

What is the period of performance?

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

What specific high-performance computing and visualization capabilities does this contract support for the EPA?

This contract, awarded under NAICS code 541511 (Custom Computer Programming Services), likely supports the EPA's need for advanced computational resources. This includes systems for complex environmental modeling, large-scale data analysis, climate change simulations, and visualization of scientific data. The 'HIGH PERFORMANCE COMPUTING AND VISUALIZATION PROJECTS/DOCUMENTATION SUPPORT' description suggests services ranging from system maintenance and upgrades to software development and user support for these specialized computing environments. The exact capabilities would be detailed in the contract's Statement of Work (SOW), outlining specific tasks, deliverables, and performance standards required to meet the EPA's scientific and regulatory objectives.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types for similar IT services?

The Cost Plus Fixed Fee (CPFF) structure is often used for research and development or complex IT projects where the scope is not fully defined at the outset, or where innovation is a key objective. It allows the contractor to recover all allowable costs plus a predetermined fixed fee representing profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers less cost certainty for the government but can provide greater flexibility and encourage the contractor to undertake challenging tasks without bearing the full financial risk of cost overruns. However, it requires robust government oversight to control costs and ensure the fixed fee remains appropriate for the effort expended. Other structures like Cost Plus Incentive Fee (CPIF) or Cost Plus Award Fee (CPAF) introduce performance incentives, which may offer better value if well-structured.

What is the historical spending trend for high-performance computing support at the EPA?

Analyzing the historical spending trend for high-performance computing (HPC) support at the EPA requires access to broader federal procurement data beyond this single contract. This $13.2 million contract, awarded in 2004 and ending in 2011, represents a significant investment over its seven-year duration. To understand trends, one would need to examine EPA's IT budgets and contract awards for HPC and related services over multiple fiscal years, looking for patterns in contract values, types, and durations. Factors such as evolving scientific needs, technological advancements in computing, and shifts in agency priorities would influence these trends. Without that broader dataset, this contract serves as a data point for a specific period.

What are the potential risks associated with a 7-year contract for IT services like high-performance computing?

A 7-year contract for IT services, particularly in a rapidly evolving field like high-performance computing (HPC), carries several risks. Technological obsolescence is a primary concern; hardware and software can become outdated within this timeframe, potentially leading to performance limitations or increased maintenance costs for legacy systems. Vendor lock-in is another risk, where the government becomes heavily reliant on a single provider, reducing leverage for future negotiations or transitions. Furthermore, the initial requirements defined at the contract's start may not fully align with the EPA's needs seven years later, necessitating costly modifications or scope changes. Finally, the long duration can make it challenging to maintain competitive pricing throughout the contract life if market rates decrease significantly.

How does Lockheed Martin's track record influence the assessment of this contract's performance?

Lockheed Martin is a major defense contractor with extensive experience in complex IT systems, including high-performance computing. Their track record suggests a capacity to handle large-scale, technically demanding projects. However, assessing the performance of this specific contract requires looking beyond the contractor's general reputation. Key factors include adherence to schedule, meeting technical performance requirements, managing costs effectively within the CPFF structure, and overall client satisfaction from the EPA. Without specific performance reviews or audit reports related to this contract, it's difficult to definitively link Lockheed Martin's general capabilities to the actual outcomes of this particular engagement. Their size and experience generally indicate a lower risk of contractor failure, but do not guarantee optimal performance or value.

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: $14,532,952

Exercised Options: $14,532,952

Current Obligation: $13,205,638

Parent Contract

Parent Award PIID: EPW04005

IDV Type: IDC

Timeline