DoD's $344M Lockheed Martin contract for computer systems design services awarded without competition

Contract Overview

Contract Amount: $343,847,793 ($343.8M)

Contractor: Lockheed Martin Services, LLC

Awarding Agency: Department of Defense

Start Date: 2005-09-16

End Date: 2011-03-28

Contract Duration: 2,019 days

Daily Burn Rate: $170.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Place of Performance

Location: CHERRY HILL, CAMDEN County, NEW JERSEY, 08002

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $343.8 million to LOCKHEED MARTIN SERVICES, LLC for work described as: Key points: 1. The contract's significant value raises questions about potential cost efficiencies missed due to a lack of competition. 2. Sole-source awards can limit opportunities for innovative solutions from a broader range of vendors. 3. The long duration of the contract (2005-2011) suggests a sustained need, but also a prolonged period without competitive pressure. 4. Performance context is limited without specific metrics on system uptime, efficiency gains, or user satisfaction. 5. This contract falls within the IT services sector, a critical area for defense operations. 6. The absence of small business set-asides or subcontracting goals may limit broader economic impact.

Value Assessment

Rating: questionable

Benchmarking the value of this $344 million contract is challenging without detailed service descriptions and performance metrics. However, the lack of competition suggests that pricing may not have been subjected to market pressures, potentially leading to higher costs than if multiple bids were solicited. Comparing it to similar, competitively awarded IT services contracts for the Department of Defense could reveal significant deviations in cost-effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Lockheed Martin Services, LLC, was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple companies submitting proposals. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities, urgent needs), they generally reduce the government's ability to secure the best possible price and value through market competition.

Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from the cost savings and innovation that typically arise from a competitive bidding environment. This can result in higher overall spending for the government.

Public Impact

The primary beneficiary is the Department of Defense, which receives computer systems design services essential for its operations. The services delivered likely include system design, integration, and potentially maintenance, supporting critical defense infrastructure. The geographic impact is primarily within the United States, supporting defense installations and personnel. Workforce implications include employment for Lockheed Martin personnel involved in the contract, though specific numbers are not provided.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have led to inflated costs for taxpayers.
Sole-source award limits opportunities for other capable vendors, potentially stifling innovation.
Long contract duration without re-competition raises concerns about sustained value for money.
Absence of small business participation limits economic benefits for smaller enterprises.
Limited public information on performance metrics makes it difficult to assess effectiveness.

Positive Signals

Contract awarded to a large, established defense contractor with a track record in IT services.
The contract addressed a sustained need within the Department of Defense.
Firm Fixed Price contract type can provide cost certainty for the government.

Sector Analysis

This contract falls within the Information Technology (IT) services sector, specifically computer systems design. The IT services market for the federal government is substantial, with agencies relying heavily on contractors for system development, integration, and maintenance. Comparable spending benchmarks for IT services contracts within the Department of Defense are often in the hundreds of millions or billions of dollars, reflecting the complexity and scale of defense IT needs. However, the lack of competition for this specific award is a notable deviation from typical procurement practices aimed at maximizing value.

Small Business Impact

This contract did not include small business set-asides, nor is there an indication of subcontracting goals for small businesses. This means that opportunities for small businesses to participate in this significant IT services contract were likely minimal. The absence of small business involvement in large sole-source awards can limit the growth and development of the small business ecosystem within the federal contracting space, as these companies often rely on such opportunities to scale their operations.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), responsible for monitoring performance, costs, and compliance. However, specific details on the extent of oversight, performance reviews, or any Inspector General investigations related to this sole-source award are not publicly available. Transparency is limited due to the nature of the sole-source procurement and the lack of readily accessible performance data.

Related Government Programs

Department of Defense IT Services Contracts
Computer Systems Design Services
Lockheed Martin Federal Contracts
Sole-Source IT Procurements
Defense Logistics Agency Contracts

Risk Flags

Sole-source award may indicate limited competition, potentially impacting price and innovation.
Long contract duration without re-competition raises concerns about sustained value.
Lack of publicly available performance metrics hinders assessment of effectiveness.
Absence of small business participation limits broader economic impact.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $343.8 million to LOCKHEED MARTIN SERVICES, LLC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN SERVICES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $343.8 million.

What is the period of performance?

Start: 2005-09-16. End: 2011-03-28.

What was the specific justification for awarding this contract on a sole-source basis?

The provided data does not specify the justification for the sole-source award. Typically, sole-source contracts are justified when only one responsible source can provide the required supplies or services, such as when there is a unique capability, a critical need that cannot be met by other sources, or in cases of urgent and compelling circumstances. Without further documentation, it is impossible to ascertain the precise rationale behind this decision. This lack of transparency is a common concern with sole-source procurements, as it can obscure whether the government truly exhausted all competitive options.

How does the $344 million value compare to similar IT services contracts awarded by the DoD?

The $344 million value for computer systems design services is substantial, aligning with the significant IT spending within the Department of Defense. However, direct comparisons are difficult without knowing the specific services rendered and the contract's duration. Competitively awarded contracts of similar scale often involve extensive service level agreements, performance metrics, and detailed pricing structures. The fact that this contract was sole-sourced means its pricing may not reflect the competitive market rates that would typically be established through a bidding process. Further analysis would require comparing it to other sole-source awards or, ideally, to competitively procured contracts for analogous IT services to gauge potential cost differences.

What were the key performance indicators (KPIs) or metrics used to assess Lockheed Martin's performance under this contract?

The provided data does not include specific Key Performance Indicators (KPIs) or metrics used to assess Lockheed Martin's performance. For a contract of this magnitude and duration, one would expect metrics related to system availability, response times, successful implementation of system designs, user satisfaction, and adherence to project timelines and budgets. The absence of this information in the summary data makes it challenging to evaluate the effectiveness and value delivered by the contractor. A thorough review would necessitate accessing the contract's statement of work and any associated performance reports.

What is the historical spending pattern for computer systems design services by the Defense Logistics Agency (DLA)?

The provided data focuses on a single contract awarded in 2005. To understand the historical spending pattern for computer systems design services by the Defense Logistics Agency (DLA), one would need to analyze spending across multiple fiscal years and various contracts within this service category. This specific $344 million contract represents a significant portion of DLA's IT spending during its active period. However, without a broader dataset, it's impossible to determine if this was an outlier, a consistent level of investment, or part of a trend. Analyzing DLA's procurement history would reveal the typical scale and frequency of such IT service contracts.

Were there any identified risks or challenges associated with this contract, and how were they managed?

The data provided does not explicitly detail risks or challenges encountered during the execution of this contract. However, inherent risks in large, sole-source IT contracts include potential cost overruns, schedule delays, scope creep, and contractor performance issues. Given the sole-source nature, a primary risk is the lack of competitive pressure potentially leading to suboptimal value for money. Effective management of such a contract would typically involve robust government oversight, clear communication channels, and proactive risk mitigation strategies. Without specific reports or documentation, assessing the actual risk management effectiveness is not possible.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 2339 ROUTE 70 WEST, FLOOR, CHERRY HILL, NJ, 01

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline