DoD Awards Lockheed Martin $52.8M for Simulation Framework, Raising Questions on Value and Competition
Contract Overview
Contract Amount: $52,828,692 ($52.8M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2024-12-04
End Date: 2026-10-15
Contract Duration: 680 days
Daily Burn Rate: $77.7K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS AWARD FEE
Sector: IT
Official Description: DEVELOPMENT OF OBJECTIVE SIMULATION FRAMEWORK CAPABILITIES TO PROVIDE A MODELING AND SIMULATION AUGMENTATION SYSTEM
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35898
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $52.8 million to LOCKHEED MARTIN CORPORATION for work described as: DEVELOPMENT OF OBJECTIVE SIMULATION FRAMEWORK CAPABILITIES TO PROVIDE A MODELING AND SIMULATION AUGMENTATION SYSTEM Key points: 1. Significant investment in advanced simulation capabilities for missile defense. 2. Sole contractor identified, raising concerns about competitive pricing. 3. Potential for cost overruns given the Cost Plus Award Fee contract type. 4. Focus on IT services within the defense sector.
Value Assessment
Rating: questionable
The contract's Cost Plus Award Fee structure allows for potential cost growth beyond the initial estimate. Benchmarking against similar custom computer programming services is difficult without more detailed cost breakdowns, but the award amount appears substantial for the stated objective.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
While advertised as full and open competition, the specific nature of the 'Objective Simulation Framework Capabilities' may have limited the pool of qualified bidders. The award type (Delivery Order) suggests this is part of a larger contract vehicle, and the price discovery for this specific order needs further scrutiny.
Taxpayer Impact: Taxpayer funds are allocated for advanced defense simulation, aiming to enhance national security. However, the lack of clear competitive pressure could lead to less efficient use of these funds.
Public Impact
Enhances U.S. missile defense capabilities through advanced modeling and simulation. Supports technological advancement in a critical national security sector. Potential for job creation within the aerospace and defense industry. Ensures U.S. military readiness through sophisticated training and analysis tools.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Award Fee contract type.
- Limited visibility into specific performance metrics and cost drivers.
- Potential for scope creep in complex simulation development.
Positive Signals
- Addresses a critical need for advanced simulation in missile defense.
- Leverages a known defense contractor with relevant expertise.
- Aims to improve decision-making through enhanced modeling.
Sector Analysis
This contract falls under Information Technology (IT) services, specifically custom computer programming, within the broader defense sector. Spending benchmarks for similar complex simulation development projects are highly variable, but this award represents a significant investment in specialized software capabilities.
Small Business Impact
The contract was awarded to Lockheed Martin Corporation, a large prime contractor. There is no indication that small businesses were significantly involved in this specific award, either as subcontractors or direct awardees, suggesting limited direct benefit to the small business sector for this particular contract.
Oversight & Accountability
The Department of Defense, through the Missile Defense Agency, is responsible for oversight. The Cost Plus Award Fee structure necessitates robust monitoring to ensure performance objectives are met and costs are controlled effectively. Further review of performance reports and cost audits would be beneficial.
Related Government Programs
- Custom Computer Programming Services
- Department of Defense Contracting
- Missile Defense Agency Programs
Risk Flags
- Cost Plus Award Fee contract type.
- Potential for limited competition due to specialized nature of services.
- Lack of transparency on specific performance metrics and cost drivers.
- Significant contract value suggests high stakes for performance.
- Reliance on a single large contractor.
Tags
custom-computer-programming-services, department-of-defense, al, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $52.8 million to LOCKHEED MARTIN CORPORATION. DEVELOPMENT OF OBJECTIVE SIMULATION FRAMEWORK CAPABILITIES TO PROVIDE A MODELING AND SIMULATION AUGMENTATION SYSTEM
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Missile Defense Agency).
What is the total obligated amount?
The obligated amount is $52.8 million.
What is the period of performance?
Start: 2024-12-04. End: 2026-10-15.
What specific performance metrics will be used to evaluate the success of the 'Objective Simulation Framework Capabilities' and justify potential award fees?
The success of the simulation framework will likely be evaluated based on its ability to accurately model complex missile defense scenarios, provide actionable insights for strategic planning, and integrate seamlessly with existing defense systems. Specific metrics might include simulation fidelity, processing speed, user feedback on utility, and successful validation against real-world or simulated test data. The award fee structure would be tied to achieving predefined milestones and exceeding baseline performance targets.
How does the Missile Defense Agency ensure competitive pricing and value for money when awarding contracts for highly specialized, potentially niche capabilities like this simulation framework?
The agency typically initiates full and open competition to maximize bidder participation. However, for highly specialized needs, the pool of capable contractors may be limited. Price discovery is attempted through market research, historical cost data, and negotiation. The Cost Plus Award Fee structure aims to incentivize efficiency, but requires diligent oversight to prevent excessive costs and ensure the final price reflects true value delivered.
What is the long-term strategy for maintaining and updating this simulation framework, and how will future costs be managed to ensure continued cost-effectiveness?
The long-term strategy likely involves phased development, incorporating user feedback, and planning for technology refreshes. Future costs will be managed through competitive follow-on contracts, potentially using fixed-price or other more cost-certain structures for sustainment and upgrades. Continuous market analysis and benchmarking will be crucial to ensure ongoing cost-effectiveness and prevent vendor lock-in.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services
Product/Service Code: IT AND TELECOM - APLLICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: HQ014717R0047
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp
Address: 9970 FEDERAL DR, COLORADO SPRINGS, CO, 80921
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $93,319,206
Exercised Options: $93,319,206
Current Obligation: $52,828,692
Subaward Activity
Number of Subawards: 27
Total Subaward Amount: $7,391,315
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HQ014719D0002
IDV Type: IDC
Timeline
Start Date: 2024-12-04
Current End Date: 2026-10-15
Potential End Date: 2026-10-15 00:00:00
Last Modified: 2026-01-14
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