GSA awards $130M for High Performance Computing Services to Lockheed Martin, raising value concerns
Contract Overview
Contract Amount: $130,436,152 ($130.4M)
Contractor: Lockheed Martin Integrated Systems, LLC
Awarding Agency: General Services Administration
Start Date: 2008-04-01
End Date: 2013-11-30
Contract Duration: 2,069 days
Daily Burn Rate: $63.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS AWARD FEE
Sector: IT
Official Description: HIGH PERFORMANCE COMPUTERS SERVICE AND SUPPORT
Place of Performance
Location: LORTON, FAIRFAX County, VIRGINIA, 22079
State: Virginia Government Spending
Plain-Language Summary
General Services Administration obligated $130.4 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC for work described as: HIGH PERFORMANCE COMPUTERS SERVICE AND SUPPORT Key points: 1. Contract value of $130.4M over 5 years. 2. Sole incumbent provider, Lockheed Martin, raises competition concerns. 3. Cost-plus award fee contract type may limit price discovery. 4. Spending in IT services sector is substantial, but benchmarks are needed.
Value Assessment
Rating: questionable
The contract's total value is significant. Without specific performance metrics or comparable contract data, it's difficult to assess if the $130.4M represents excellent value. The cost-plus award fee structure can lead to higher costs if not tightly managed.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
While the contract was awarded under full and open competition, the incumbent provider's continued success suggests potential barriers to entry for competitors or a strong existing relationship. The price discovery mechanism relies heavily on the award fee criteria.
Taxpayer Impact: Taxpayer funds are being spent on high-performance computing services. The effectiveness of the competition and contract type will determine the ultimate value for taxpayers.
Public Impact
High-performance computing is critical for government research and operations. The long duration of the contract (over 5 years) suggests a need for sustained services. The specific agency (GSA) and service area (FAS) indicate broad government utility.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus award fee structure
- Lack of clear performance benchmarks
- Potential for vendor lock-in
Positive Signals
- Awarded under full and open competition
- Critical IT infrastructure support
Sector Analysis
This contract falls within the Information Technology sector, specifically high-performance computing services. Spending in this area is generally high due to the specialized nature and rapid evolution of technology. Benchmarking against similar HPC contracts is crucial for value assessment.
Small Business Impact
The data indicates this contract was not awarded to small businesses. Further analysis would be needed to determine if small businesses had opportunities to participate in the subcontracting efforts.
Oversight & Accountability
The contract's duration and value warrant robust oversight to ensure performance standards are met and costs remain reasonable. GSA's Federal Acquisition Service is responsible for managing this contract.
Related Government Programs
- Computer and Software Stores
- General Services Administration Contracting
- Federal Acquisition Service Programs
Risk Flags
- Cost-plus award fee contract type
- Lack of specific performance benchmarks provided
- Potential for limited effective competition despite 'full and open' award
- Significant contract value over a long duration
Tags
computer-and-software-stores, general-services-administration, va, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
General Services Administration awarded $130.4 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC. HIGH PERFORMANCE COMPUTERS SERVICE AND SUPPORT
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC.
Which agency awarded this contract?
Awarding agency: General Services Administration (Federal Acquisition Service).
What is the total obligated amount?
The obligated amount is $130.4 million.
What is the period of performance?
Start: 2008-04-01. End: 2013-11-30.
What specific performance metrics are tied to the award fee, and how are they measured to ensure fair pricing?
The effectiveness of the cost-plus award fee structure hinges on clearly defined, measurable, and achievable performance metrics. Without insight into these specific criteria and the government's evaluation process, it's challenging to ascertain if the award fee is driving optimal performance and cost efficiency or simply inflating the final price.
What were the key factors that led to Lockheed Martin's continued incumbency, and were there any barriers to entry for potential competitors?
Understanding the competitive landscape and any potential barriers to entry is crucial. Factors such as specialized technical expertise, existing infrastructure integration, or the complexity of the service requirements could have favored the incumbent. A thorough review of the solicitation and award decision would reveal if the competition was truly robust or if incumbent advantages played a significant role.
How does the per-unit cost of these high-performance computing services compare to industry benchmarks or other government contracts for similar services?
Benchmarking the per-unit cost is essential for assessing value for money. Without access to detailed cost breakdowns or comparable contract data, it's difficult to determine if the $130.4 million expenditure is reasonable. Comparing these costs against industry standards and other government procurements for similar HPC services would provide a clearer picture of potential overspending or cost-effectiveness.
Industry Classification
NAICS: Retail Trade › Electronics and Appliance Stores › Computer and Software Stores
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: 4QCQ97084110
Offers Received: 3
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: 6801 ROCKLEDGE DR, BETHESDA, MD, 20817
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $1,398,737,255
Exercised Options: $197,632,652
Current Obligation: $130,436,152
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2008-04-01
Current End Date: 2013-11-30
Potential End Date: 2013-11-30 00:00:00
Last Modified: 2021-06-25
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