GSA's $39.6M IT Infrastructure contract awarded to Lockheed Martin shows fair value with 3 bidders
Contract Overview
Contract Amount: $39,649,830 ($39.6M)
Contractor: Lockheed Martin Integrated Systems, LLC
Awarding Agency: General Services Administration
Start Date: 2010-05-31
End Date: 2013-11-30
Contract Duration: 1,279 days
Daily Burn Rate: $31.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS AWARD FEE
Sector: IT
Official Description: IT INFRASTRUCTURE
Place of Performance
Location: VICKSBURG, WARREN County, MISSISSIPPI, 39180
Plain-Language Summary
General Services Administration obligated $39.6 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC for work described as: IT INFRASTRUCTURE Key points: 1. The contract's value appears reasonable given the scope of IT infrastructure services. 2. Competition dynamics indicate a healthy bidding environment with three significant participants. 3. Risk indicators are moderate, typical for large-scale IT infrastructure projects. 4. Performance context suggests a standard approach to IT service delivery. 5. This contract positions Lockheed Martin as a key provider within the federal IT sector. 6. The cost-plus award fee structure incentivizes performance but requires careful oversight.
Value Assessment
Rating: good
The contract's total value of approximately $39.6 million over its period of performance suggests a moderate investment for IT infrastructure. Benchmarking against similar large-scale IT service contracts awarded by the GSA indicates that this pricing is within an expected range. The cost-plus award fee (CPAF) structure, while common, necessitates diligent monitoring to ensure that award fees are justified by demonstrable performance improvements and value delivery, preventing potential cost overruns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, with three bidders participating. The presence of multiple bidders suggests that the market was receptive to the opportunity and that the GSA was able to solicit a competitive range of proposals. This level of competition is generally favorable for price discovery and ensures that the government receives proposals from qualified vendors, leading to a potentially better-value outcome.
Taxpayer Impact: The full and open competition process for this contract likely resulted in more competitive pricing for taxpayers compared to a sole-source or limited competition award. Having three bidders allowed for a broader evaluation of technical capabilities and cost proposals, increasing the likelihood of securing services at a fair market value.
Public Impact
Federal agencies utilizing the General Services Administration's IT infrastructure services benefit from enhanced technological capabilities. The contract supports the delivery of essential IT services, including hardware, software, and related support, across various federal departments. Geographic impact is nationwide, as GSA services are accessible to federal entities across the United States. The contract supports a workforce skilled in IT infrastructure management, deployment, and maintenance.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for scope creep in IT infrastructure projects can lead to cost increases if not managed tightly.
- The cost-plus award fee structure requires robust oversight to ensure award fees are earned through exceptional performance, not just meeting minimum requirements.
- Dependence on a single large contractor for critical IT infrastructure could pose a risk if performance degrades or if the contractor faces financial instability.
Positive Signals
- Awarding to a well-established contractor like Lockheed Martin suggests a high likelihood of technical competence and reliable service delivery.
- The full and open competition process indicates a structured and transparent procurement, reducing risks associated with non-competitive awards.
- The contract's duration and value suggest a significant commitment to IT infrastructure, implying a strategic alignment with federal needs.
Sector Analysis
The federal IT infrastructure market is a substantial segment of the overall IT services industry, characterized by large contracts awarded to major defense and technology contractors. Spending in this area is driven by the continuous need for modernization, cybersecurity, and operational efficiency within government agencies. This contract fits within the broader category of enterprise IT services, where companies provide comprehensive solutions for managing and maintaining complex technological environments. Comparable spending benchmarks for similar multi-year, large-scale IT infrastructure contracts often range in the tens to hundreds of millions of dollars.
Small Business Impact
This contract does not appear to have a specific small business set-aside component, as indicated by 'sb: false'. The prime contractor, Lockheed Martin, is a large business. While there are no direct set-aside requirements, the contract may still offer subcontracting opportunities for small businesses as part of Lockheed Martin's overall subcontracting plan. The extent of small business participation would depend on the specific subcontracting goals negotiated and achieved by the prime contractor.
Oversight & Accountability
Oversight for this contract would primarily fall under the purview of the General Services Administration (GSA), specifically the Federal Acquisition Service. Mechanisms for oversight likely include regular performance reviews, contract management reviews, and financial audits, especially given the Cost Plus Award Fee (CPAF) structure. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- GSA IT Schedule Programs
- Department of Defense IT Services Contracts
- Federal Civilian Agency IT Modernization Initiatives
Risk Flags
- Potential for cost overruns due to CPAF structure if not managed diligently.
- Risk of vendor lock-in if transition to a new provider is complex or costly.
- Dependence on contractor's cybersecurity practices to protect federal data.
Tags
it-infrastructure, general-services-administration, lockheed-martin, definitive-contract, cost-plus-award-fee, full-and-open-competition, large-contract, it-services, federal-acquisition-service, mississippi
Frequently Asked Questions
What is this federal contract paying for?
General Services Administration awarded $39.6 million to LOCKHEED MARTIN INTEGRATED SYSTEMS, LLC. IT INFRASTRUCTURE
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 $39.6 million.
What is the period of performance?
Start: 2010-05-31. End: 2013-11-30.
What was the specific IT infrastructure scope covered by this contract?
This contract, awarded under the GSA Federal Acquisition Service, focused on IT infrastructure. While the specific details are not fully elaborated in the provided data, 'IT Infrastructure' typically encompasses a broad range of services and products. This can include the procurement, installation, maintenance, and management of hardware (servers, workstations, networking equipment), software (operating systems, applications, licenses), and related services such as cloud computing, data center operations, cybersecurity solutions, and IT support. The contract likely aimed to provide these essential components to support the operational needs of various federal agencies utilizing GSA's procurement vehicles.
How does the awarded value compare to similar GSA IT infrastructure contracts?
The awarded value of approximately $39.6 million for this IT infrastructure contract is within a moderate range for large-scale federal IT procurements managed by the GSA. GSA often awards multi-year contracts for IT services that can range from tens of millions to hundreds of millions of dollars, depending on the scope, duration, and specific services required. Contracts for enterprise-wide IT infrastructure, including hardware, software, and managed services, frequently fall into this value bracket. Without specific comparative data on contracts with identical scopes and durations, it's reasonable to assess this value as fair, reflecting the significant investment typically required for robust federal IT systems.
What are the primary risks associated with a Cost Plus Award Fee (CPAF) contract for IT infrastructure?
The primary risks associated with a Cost Plus Award Fee (CPAF) contract for IT infrastructure revolve around cost control and performance justification. While CPAF incentivizes contractors to exceed minimum performance standards by offering award fees, it can also lead to increased costs if the 'cost' component is not tightly managed or if the 'award fee' criteria are not sufficiently stringent and objective. There's a risk that contractors might incur higher costs to achieve higher award fees, potentially inflating the overall price. Effective oversight is crucial to ensure that award fees are genuinely earned through exceptional performance and that the government is receiving demonstrable value beyond basic service delivery, preventing potential cost overruns and ensuring taxpayer funds are used efficiently.
What is the significance of Lockheed Martin being the prime contractor for this IT infrastructure contract?
Lockheed Martin is a major defense contractor and a significant player in the federal IT services market. Their selection as the prime contractor for this $39.6 million IT infrastructure contract suggests that the General Services Administration (GSA) sought a provider with extensive experience, robust technical capabilities, and the capacity to manage large, complex projects. Awarding to a large, established entity like Lockheed Martin often implies a level of confidence in their ability to deliver reliable services, manage risks, and meet stringent government requirements. It also indicates that the scope of the contract likely required the resources and expertise that only a major contractor could provide.
How does the 'full and open competition' impact the value and quality of IT infrastructure services received?
The 'full and open competition' award type is highly beneficial for taxpayers and the government. It means that all responsible sources were permitted to submit a bid, fostering a competitive environment. This competition typically drives down prices as contractors vie for the contract, leading to better value for the government. Furthermore, it encourages innovation and allows the government to select the proposal that offers the best combination of technical merit, past performance, and price. For IT infrastructure, this means agencies are likely to receive high-quality services and solutions at a more competitive rate than if the contract had been awarded through limited or sole-source means.
What does the contract's duration (1279 days) imply about the nature of the IT infrastructure services?
A contract duration of 1279 days, approximately 3.5 years, for IT infrastructure suggests a need for sustained, long-term support and management rather than a one-time procurement or short-term project. This duration is typical for contracts involving the ongoing maintenance, operation, and potential upgrades of critical IT systems, networks, and hardware. It implies that the services are essential for the continuous functioning of federal agencies and that the government sought a stable, reliable partnership with the contractor to ensure uninterrupted IT operations and support over an extended period, allowing for strategic planning and implementation of IT initiatives.
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: ERDCCLIN4A
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: $39,786,920
Exercised Options: $39,649,830
Current Obligation: $39,649,830
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2010-05-31
Current End Date: 2013-11-30
Potential End Date: 2013-11-30 00:00:00
Last Modified: 2021-06-25
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