HUD awarded Lockheed Martin $498.6M for IT services, including Lotus Notes and desktop support

Contract Overview

Contract Amount: $498,606,623 ($498.6M)

Contractor: Lockheed Martin Services, LLC

Awarding Agency: Department of Housing and Urban Development

Start Date: 2005-02-01

End Date: 2018-05-08

Contract Duration: 4,844 days

Daily Burn Rate: $102.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: TAS::86 4585::TAS AWARD OF PORTION OF HITS RFP TO LMC. THE CONTRACTOR IS RESPONSIBLE FOR LOTUS NOTES, DESKTOPS, LAPTOPS, FIELD OFFICE SERVERS, LANS, PRINTERS, AND KIOSKS.

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Housing and Urban Development obligated $498.6 million to LOCKHEED MARTIN SERVICES, LLC for work described as: TAS::86 4585::TAS AWARD OF PORTION OF HITS RFP TO LMC. THE CONTRACTOR IS RESPONSIBLE FOR LOTUS NOTES, DESKTOPS, LAPTOPS, FIELD OFFICE SERVERS, LANS, PRINTERS, AND KIOSKS. Key points: 1. The contract's value of nearly half a billion dollars over its life indicates a significant investment in IT infrastructure. 2. Full and open competition suggests a robust bidding process, potentially leading to better pricing. 3. The long duration (over 13 years) may present risks related to technological obsolescence and changing needs. 4. This contract covers a broad range of IT services, from end-user devices to network infrastructure. 5. The firm-fixed-price structure shifts performance risk to the contractor, but may limit flexibility. 6. The contract's focus on legacy systems like Lotus Notes raises questions about modernization efforts.

Value Assessment

Rating: fair

Benchmarking this contract's value is challenging without specific service details and market rates for the period. However, a nearly $500 million award over 13 years for comprehensive IT support suggests a substantial commitment. The firm-fixed-price nature implies that the contractor bears the risk of cost overruns, which can be a positive for the government if managed effectively. However, the long duration could lead to inefficiencies if technology or requirements change significantly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. This approach generally fosters a competitive environment, encouraging multiple bidders to offer their best pricing and technical solutions. The presence of two bidders suggests a moderate level of competition for this significant IT services contract.

Taxpayer Impact: Full and open competition typically benefits taxpayers by driving down prices through market forces and ensuring the government receives the most advantageous offer.

Public Impact

Federal employees within the Department of Housing and Urban Development (HUD) benefit from reliable IT infrastructure and support. Services include maintenance and support for desktops, laptops, servers, networks, and specific software like Lotus Notes. The contract's geographic impact is primarily within HUD's field offices across Maryland. Workforce implications include the potential for IT support jobs managed by Lockheed Martin Services, LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 13 years) increases risk of technological obsolescence and potential for cost inefficiencies.
Reliance on legacy systems like Lotus Notes may indicate a slower pace of modernization.
Firm-fixed-price contracts can sometimes lead to less flexibility in adapting to evolving IT needs.
Limited competition (2 bidders) might suggest a less aggressive pricing environment than with more bidders.

Positive Signals

Full and open competition provides a baseline for fair pricing and access to a wide range of potential providers.
Firm-fixed-price contract shifts cost overrun risk to the contractor.
The contract covers a comprehensive suite of IT services, aiming for integrated support.
The award to a large, established contractor like Lockheed Martin may suggest a focus on stability and proven performance.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on computer-related services. The market for government IT support is substantial, with agencies increasingly relying on external contractors for infrastructure management, cybersecurity, and end-user support. Comparable spending benchmarks would typically involve analyzing other large-scale IT support contracts awarded to major federal IT service providers across various agencies.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large contract awarded through full and open competition, it is unlikely that small businesses would be primary awardees. However, Lockheed Martin, as the prime contractor, may engage small businesses for subcontracting opportunities, depending on their subcontracting plan and the specific needs of the services required.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Department of Housing and Urban Development. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver specified services within the agreed price. Transparency is facilitated through contract award databases, though detailed performance metrics and oversight reports may not always be publicly accessible.

Related Government Programs

IT Infrastructure Support Services
End-User Computing Services
Network Operations and Maintenance
Software and Systems Management
Federal IT Modernization Programs

Risk Flags

Long contract duration
Reliance on legacy technology
Limited competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Housing and Urban Development awarded $498.6 million to LOCKHEED MARTIN SERVICES, LLC. TAS::86 4585::TAS AWARD OF PORTION OF HITS RFP TO LMC. THE CONTRACTOR IS RESPONSIBLE FOR LOTUS NOTES, DESKTOPS, LAPTOPS, FIELD OFFICE SERVERS, LANS, PRINTERS, AND KIOSKS.

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN SERVICES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Housing and Urban Development (Department of Housing and Urban Development).

What is the total obligated amount?

The obligated amount is $498.6 million.

What is the period of performance?

Start: 2005-02-01. End: 2018-05-08.

What was the specific scope of services included under this contract, and how did it evolve over its 13-year duration?

The contract encompassed a broad range of IT services for the Department of Housing and Urban Development (HUD), including support for Lotus Notes, desktops, laptops, field office servers, Local Area Networks (LANs), printers, and kiosks. The initial award was made in February 2005 and extended until May 2018. Given the long duration, it is highly probable that the scope of services evolved to incorporate technological advancements and changing agency requirements. However, without specific contract modifications or performance reports, the exact evolution of services, such as the transition away from or continued support of legacy systems like Lotus Notes, remains unclear. The initial description suggests a focus on maintaining existing infrastructure rather than developing new capabilities.

How did the pricing structure compare to similar IT support contracts awarded around the same period?

Comparing the pricing structure of this $498.6 million contract to similar IT support contracts awarded between 2005 and 2018 is complex without detailed service breakdowns and market data for that era. The contract type is Firm Fixed Price (FFP), which shifts risk to the contractor. FFP contracts are generally preferred for well-defined scopes of work. Benchmarking would require analyzing the per-unit costs for specific services (e.g., per desktop supported, per server maintained) against industry averages or other government contracts. Given the long duration and comprehensive nature of the services, the overall value suggests a significant investment. However, without granular data on service levels, performance metrics, and specific market conditions at the time of award, a definitive value-for-money assessment relative to peers is difficult.

What were the primary risks associated with a contract of this length (over 13 years) for IT services?

The primary risks associated with a contract of over 13 years for IT services are technological obsolescence and the potential for cost inefficiencies. Technology evolves rapidly, and systems or software supported under the contract (like Lotus Notes) could become outdated, requiring costly upgrades or replacements not fully accounted for in the original pricing. Furthermore, the long duration increases the likelihood of changes in agency needs or government priorities, which may not be easily accommodated within a fixed-price structure, potentially leading to scope creep or the need for costly modifications. Contractor performance stability over such an extended period can also be a concern, although Lockheed Martin's established presence mitigates some of this risk. The government also risks locking into potentially suboptimal solutions for an extended period.

What does the limited competition (2 bidders) suggest about the market for these specific IT services at the time?

The fact that only two bidders responded to this full and open competition suggests that the market for these specific, comprehensive IT services for HUD may have been concentrated among a few large federal contractors capable of handling such a large and complex scope. This could be due to high barriers to entry, such as the need for extensive security clearances, demonstrated past performance with large government agencies, and the financial capacity to manage a contract of this magnitude. While full and open competition theoretically allows all, limited responses can sometimes indicate a lack of broader market interest or capability, potentially impacting price competitiveness compared to a scenario with numerous bidders.

How does the reliance on legacy systems like Lotus Notes impact the overall IT modernization strategy of HUD?

The inclusion of support for legacy systems like Lotus Notes in a contract awarded in 2005 and extending to 2018 raises questions about HUD's IT modernization strategy during that period. While maintaining existing systems is often necessary for operational continuity, a significant focus on legacy support can divert resources and attention from adopting newer, more efficient, and secure technologies. If Lotus Notes was still a critical platform for HUD operations throughout the contract's life, it might indicate a slower-than-desired pace of migration to modern collaboration and communication tools. This could impact productivity, data security, and the agency's ability to leverage advanced functionalities available in contemporary software solutions.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

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

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 9211 CORPORATE BLVD, ROCKVILLE, MD, 20850

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $588,132,985

Exercised Options: $541,365,440

Current Obligation: $498,606,623

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline