DoD's $74M Lockheed Martin contract for sustainment support services awarded without competition
Contract Overview
Contract Amount: $74,171,281 ($74.2M)
Contractor: Lockheed Martin Corp
Awarding Agency: Department of Defense
Start Date: 2017-08-01
End Date: 2025-01-31
Contract Duration: 2,740 days
Daily Burn Rate: $27.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: IGF::OT::IGF MARK IV-B FOLLOW ON SUSTAINMENT SUPPORT SERVICES INCLUDING SPECTRUM RELOCATION FUNDED SUPPORT
Place of Performance
Location: KING OF PRUSSIA, MONTGOMERY County, PENNSYLVANIA, 19406
Plain-Language Summary
Department of Defense obligated $74.2 million to LOCKHEED MARTIN CORP for work described as: IGF::OT::IGF MARK IV-B FOLLOW ON SUSTAINMENT SUPPORT SERVICES INCLUDING SPECTRUM RELOCATION FUNDED SUPPORT Key points: 1. Contract awarded to a single, large defense contractor, raising questions about competitive pricing. 2. Long-term contract duration of over 7 years suggests significant program commitment. 3. Firm Fixed Price contract type aims to control costs, but initial award lacks competitive benchmarking. 4. Services include spectrum relocation support, a critical but potentially niche area. 5. Awarded to Lockheed Martin, a major player in the defense sector, indicating established relationships. 6. The contract's value, while substantial, needs comparison to similar sustainment services.
Value Assessment
Rating: questionable
The contract's value of $74.17 million over approximately 7 years for sustainment support services is difficult to benchmark without more specific details on the scope of work and comparable contracts. The lack of competition is a primary concern for assessing value for money. While a Firm Fixed Price contract is generally favorable for cost control, the absence of competitive bids means there's no market validation of the pricing. Without data on per-unit costs or comparisons to similar sustainment contracts, it's challenging to definitively state if the pricing is optimal.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded using a sole-source justification, meaning it was not competed. This approach is typically used when only one responsible source can provide the required supplies or services. The lack of competition means that potential cost savings that could arise from a bidding process are unlikely to have been realized. It also limits the opportunity for other qualified contractors to demonstrate their capabilities and potentially offer innovative or more cost-effective solutions.
Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without multiple bids, there is less assurance that the government secured the best possible price for these sustainment services.
Public Impact
The Department of Defense benefits from continued sustainment support for critical systems. Services include spectrum relocation, essential for modernizing and managing radio frequencies. The contract supports the operational readiness of Air Force assets. Workforce implications are likely within Lockheed Martin's existing specialized technical teams.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may lead to higher costs for taxpayers.
- Sole-source awards can stifle innovation from smaller or emerging contractors.
- Long-term nature of the contract could reduce flexibility if needs change.
Positive Signals
- Firm Fixed Price contract type provides cost certainty for the government.
- Award to an established contractor like Lockheed Martin suggests a focus on proven capabilities.
- Sustainment services are critical for maintaining operational readiness of defense systems.
Sector Analysis
This contract falls within the broader defense industry, specifically focusing on sustainment and technical consulting services. The defense sustainment market is substantial, involving maintenance, repair, and upgrade services for military platforms and systems. Companies like Lockheed Martin are key players, often holding long-term contracts for specialized support. Benchmarking this contract's value is challenging without specific details on the systems supported and the nature of the spectrum relocation, but it represents a typical expenditure for maintaining complex defense infrastructure.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. The prime contractor is Lockheed Martin, a large corporation. There is no explicit information regarding subcontracting plans for small businesses within the provided data. This sole-source award to a major prime contractor may limit opportunities for small businesses to participate in this specific contract, although they might be involved in Lockheed Martin's broader supply chain.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. The contract's Firm Fixed Price nature provides some cost control. Transparency is limited by the sole-source award, as competitive proposals and justifications are not publicly available. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Defense Logistics Agency (DLA) Sustainment Programs
- Air Force Materiel Command (AFMC) Sustainment Contracts
- Department of Defense Spectrum Management
- Lockheed Martin Aerospace Sustainment Services
Risk Flags
- Sole-source award lacks competitive pricing validation.
- Long contract duration may reduce flexibility.
- Limited public information on specific services and performance.
Tags
defense, department-of-defense, air-force, lockheed-martin-corp, sustainment-services, technical-consulting, sole-source, firm-fixed-price, large-contract, spectrum-relocation, pennsylvania, definitive-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $74.2 million to LOCKHEED MARTIN CORP. IGF::OT::IGF MARK IV-B FOLLOW ON SUSTAINMENT SUPPORT SERVICES INCLUDING SPECTRUM RELOCATION FUNDED SUPPORT
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORP.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $74.2 million.
What is the period of performance?
Start: 2017-08-01. End: 2025-01-31.
What is the specific nature of the 'spectrum relocation' services being provided under this contract?
The provided data does not specify the exact nature of the 'spectrum relocation' services. This could encompass a range of activities, such as migrating communication systems to different radio frequency bands to avoid interference, comply with new regulations, or free up spectrum for new technologies. Given the contractor is Lockheed Martin and the agency is the Department of Defense, these services are likely related to military communication, radar, or electronic warfare systems. Understanding the technical requirements and the criticality of these relocations would be essential for a full assessment of the contract's value and necessity.
How does the $74.17 million contract value compare to similar sustainment contracts for Air Force systems?
Direct comparison of the $74.17 million contract value to similar sustainment contracts is difficult without more granular data on the specific systems being supported, the duration, and the scope of services. However, for major defense platforms, sustainment contracts can range from tens to hundreds of millions of dollars over their lifecycle. The fact that this is a sole-source award to Lockheed Martin, a major defense contractor, suggests it pertains to significant systems. A comprehensive analysis would require benchmarking against contracts for similar platform types (e.g., aircraft, command and control systems) and service scopes (e.g., depot maintenance, field support, software sustainment).
What were the justifications for awarding this contract on a sole-source basis?
The provided data indicates the contract was 'NOT COMPETED' (CT: NOT COMPETED), implying a sole-source award. Typical justifications for sole-source contracts include situations where only one contractor possesses the unique capability, technology, or proprietary data necessary to fulfill the requirement, or in cases of urgent and compelling need where competition is not feasible. For a large defense contractor like Lockheed Martin providing sustainment services, the justification might stem from proprietary system knowledge, existing infrastructure integration, or specific technical expertise developed under previous contracts. A formal Justification for Other Than Full and Open Competition (JOFOC) would detail these reasons.
What is Lockheed Martin's track record with the Department of the Air Force for sustainment services?
Lockheed Martin has a long and extensive track record of providing a wide array of services, including sustainment, to the Department of the Air Force and the broader Department of Defense. They are a prime contractor on numerous major defense platforms, such as fighter jets (e.g., F-35, F-16), transport aircraft, and various command, control, communications, computers, and intelligence (C4I) systems. Their history typically involves complex, long-term sustainment and modernization efforts. While specific performance metrics for this particular contract are not available, Lockheed Martin's overall engagement with the Air Force suggests a deep familiarity with its operational requirements and sustainment needs.
Are there any performance risks associated with this contract, given its sole-source nature and duration?
Performance risks associated with this sole-source contract include potential complacency from the contractor due to lack of competitive pressure, which could impact service quality or responsiveness over the contract's long duration (2017-2025). The absence of competition also means less opportunity for the government to benefit from innovative solutions or cost-saving proposals that might emerge from a competitive bidding process. Furthermore, if the specific sustainment needs or the technology involved evolve significantly, the fixed nature of the sole-source agreement might pose challenges in adapting the scope or pricing without renegotiation, potentially leading to cost overruns or performance gaps if not managed proactively.
How does this contract fit into the broader landscape of Air Force sustainment spending?
This $74.17 million contract represents a component of the Air Force's overall sustainment spending, which is a significant portion of its budget. Sustainment encompasses maintenance, repair, logistics, and upgrades necessary to keep aircraft, ground systems, and infrastructure operational. The Air Force relies heavily on large, established defense contractors like Lockheed Martin for these services, often through long-term, sole-source, or limited-competition contracts, especially for specialized or proprietary systems. This particular contract's focus on 'spectrum relocation' suggests it addresses a specific technical need within the broader sustainment portfolio, contributing to the overall readiness and modernization efforts.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Other Scientific and Technical Consulting Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: FA882316R0006
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 230 MALL BLVD, KING OF PRUSSIA, PA, 19406
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $94,986,287
Exercised Options: $74,399,149
Current Obligation: $74,171,281
Actual Outlays: $1,265,033
Subaward Activity
Number of Subawards: 56
Total Subaward Amount: $7,561,490
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2017-08-01
Current End Date: 2025-01-31
Potential End Date: 2025-01-31 00:00:00
Last Modified: 2025-12-17
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