Treasury's $11.19M IT contract with Lockheed Martin for computer systems design services awarded competitively

Contract Overview

Contract Amount: $11,186,285 ($11.2M)

Contractor: Lockheed Martin Services Inc

Awarding Agency: Department of the Treasury

Start Date: 2007-01-04

End Date: 2013-04-26

Contract Duration: 2,304 days

Daily Burn Rate: $4.9K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 17

Pricing Type: COMBINATION (TWO OR MORE)

Sector: IT

Official Description: 2ND EDW TIPSS-3 SOW

Place of Performance

Location: GAITHERSBURG, MONTGOMERY County, MARYLAND, 20879

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $11.2 million to LOCKHEED MARTIN SERVICES INC for work described as: 2ND EDW TIPSS-3 SOW Key points: 1. Contract awarded competitively, suggesting potential for good value. 2. Computer systems design services are critical for agency operations. 3. The contract duration of 2304 days indicates a long-term need. 4. Performance context is essential to evaluate the effectiveness of these services. 5. Sector positioning within IT services is a significant area of federal spending.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable contract data. The total award amount of $11.19 million over approximately six years suggests a moderate annual spend. Further analysis would require comparing unit costs for specific services rendered against industry standards and other government contracts for similar IT support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded as a competitive delivery order, indicating that multiple vendors had the opportunity to bid. The presence of 17 bids suggests a robust competition, which typically drives down prices and encourages innovation. The competitive nature of the award is a positive sign for price discovery and ensuring the government receives a fair market price.

Taxpayer Impact: A competitive award process means taxpayer dollars are likely being used more efficiently, as vendors vied to offer the best value. This process helps prevent overpayment and ensures that the selected contractor is the most capable and cost-effective option.

Public Impact

Benefits the Department of the Treasury by providing essential computer systems design services. Ensures the continued operation and modernization of critical IRS IT infrastructure. Services are delivered within Maryland, impacting the local IT workforce. Supports the agency's mission by enhancing its technological capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it difficult to assess true value for money.
Long contract duration could lead to vendor lock-in if not managed carefully.
Potential for scope creep over the contract's extended period.

Positive Signals

Awarded through a full and open competition, indicating a fair and transparent process.
Multiple bids received suggest a healthy market and competitive pricing.
Contract supports critical IT infrastructure for a major federal agency.

Sector Analysis

This contract falls within the Computer Systems Design Services sector (NAICS 541512), a significant segment of the federal IT market. This sector encompasses a wide range of services, from custom software development to IT consulting and systems integration. Federal spending in this area is consistently high, reflecting the ongoing need for agencies to maintain and upgrade complex technological systems to support their missions.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). While this specific award may not directly benefit small businesses through a set-aside, the prime contractor, Lockheed Martin Services Inc., may engage small businesses as subcontractors. Further investigation into subcontracting plans would be needed to assess the broader impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Department of the Treasury's Internal Revenue Service. Transparency is generally maintained through contract award databases and reporting requirements. The Inspector General's office may conduct audits or investigations if performance issues or potential fraud are identified.

Related Government Programs

IT Services
Computer Systems Design
Department of the Treasury Contracts
Internal Revenue Service IT Modernization

Risk Flags

Potential for technological obsolescence over the contract's duration.
Risk of vendor lock-in due to long-term engagement.
Need for robust contract management to prevent scope creep and ensure quality.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $11.2 million to LOCKHEED MARTIN SERVICES INC. 2ND EDW TIPSS-3 SOW

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN SERVICES INC.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Internal Revenue Service).

What is the total obligated amount?

The obligated amount is $11.2 million.

What is the period of performance?

Start: 2007-01-04. End: 2013-04-26.

What specific computer systems design services were rendered under this contract?

The contract, identified as 2ND EDW TIPSS-3 SOW, was awarded to Lockheed Martin Services Inc. for Computer Systems Design Services (NAICS 541512). While the specific SOW details are not provided, this category typically includes services such as designing and developing custom software, integrating hardware and software systems, IT consulting, and providing technical support for computer systems. Given the agency (Department of the Treasury, Internal Revenue Service), these services likely supported the agency's vast and complex IT infrastructure, potentially involving tax processing systems, data management, cybersecurity enhancements, or modernization efforts of existing platforms.

How does the $11.19 million award amount compare to similar contracts for computer systems design services?

The total award of $11.19 million over approximately six years (January 4, 2007, to April 26, 2013) represents an average annual spend of roughly $1.86 million. This figure is moderate within the context of large federal IT contracts. However, a true comparison requires detailed analysis of the specific services provided, the complexity of the systems supported, and the prevailing market rates at the time of award. Contracts for similar large-scale IT design and integration services for federal agencies can range from millions to hundreds of millions of dollars annually, depending on the scope and criticality of the systems involved.

What are the key risks associated with a long-term IT services contract like this one?

Long-term IT services contracts, such as this one spanning over six years, carry several inherent risks. One primary risk is technological obsolescence; the technology landscape can change rapidly, potentially making the designed systems outdated before the contract's end. Another risk is vendor lock-in, where the agency becomes overly dependent on the contractor, making it difficult and costly to switch providers. Scope creep is also a concern, where the project's requirements expand beyond the original agreement, leading to cost overruns and delays. Furthermore, maintaining consistent service quality and performance over an extended period requires robust oversight and contract management to mitigate potential degradation.

What was the track record of Lockheed Martin Services Inc. with the Department of the Treasury prior to this award?

Assessing Lockheed Martin Services Inc.'s track record specifically with the Department of the Treasury prior to this 2007 award would require a deep dive into historical contract databases and performance reviews. However, Lockheed Martin is a major defense and aerospace contractor with extensive experience in providing IT and systems integration services across numerous federal agencies. Their general track record suggests a capacity to handle large, complex government contracts. Specific performance on prior Treasury contracts, if any, would be detailed in government performance assessment reports (e.g., Contractor Performance Assessment Reporting System - CPARS), which are not publicly available in this context.

How does the competitive nature of this award impact the IRS's ability to secure future IT services?

The fact that this contract was awarded competitively (full-and-open with 17 bids) has several positive implications for the IRS's ability to secure future IT services. Firstly, it demonstrates that the market is healthy and that multiple capable vendors are interested in supporting the IRS's IT needs. This competition generally leads to better pricing and service offerings. Secondly, a competitive award process establishes a benchmark for pricing and performance, which can be leveraged in future solicitations. It signals to potential future bidders that the IRS conducts thorough evaluations and expects strong value, encouraging them to submit competitive proposals. This process also fosters innovation as vendors strive to differentiate their offerings.

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: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 17

Pricing Type: COMBINATION (TWO OR MORE) (2)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 5203 LEESBURG PIKE, SUITE 800, FALLS CHURCH, VA, 08

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $19,412,657

Exercised Options: $11,534,433

Current Obligation: $11,186,285

Parent Contract

Parent Award PIID: TIRNO06D00023

IDV Type: IDC

Timeline