Article Reviews

Federal Contracting Activties and Contract types Essay

Posted on

After reviewing the 2012 Top 100 contractors from the Washington Technology I chose Lockheed Martin Corporation. They are the number one on the Washington Technology List with current standing revenue of $17,438,128,000. As of 2012, they employed 123,000at their headquarters in Bethesda, Md. They’re lines of business is information systems, aeronautics, spaces systems.. There major customers are the Armed Forces, as well as NASA, and National Science Foundation. Some of the major contracts or projects have been the CIO-SP3, GSA Alliant, GSA schedules, Aegis, U.S. Antarctica Program..

The first graph goes over Lockheed Martin current revenue. March1995 via the union of the nation’s second and third ranking defense contractors. Lockheed Corporation and Martin Marietta joined due to N. Augustine who made the dramatic move for both companies to merge as equals.. With this plan it would be able to merge and eliminate a lot of unwanted activities and get rid of thousand jobs in the process which was bad for the employees.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

Lockheed Martin has had many contracts awarded to them over the last couple of years. These contracts range from fixed-price, cost reimbursement, etc. Now one contract that was awarded was Lockheed Martin Missiles, Fire Control in Orlando, Fla. They were awarded a $45,757,735 firm-fixed-price contract modification for an increase quantity buy of like 75 baseline missiles for the Joint-air-to-surface-missiles program office. And at this time they are obligated $45,757,735. . The MFC designs, develops, manufactures, and supports advanced combat, missile, rocket, and sensor systems for the U.S. and foreign military. The company’s workforce at the time was of 10,688 employees that produced and delivered more than 100 products through 825 contracts in more than 60 countries. . In this certain contract they used a firm-fixed-price contract which was good for Lockheed Martin due to the government being committed to pay that price. Another reason, that they chose firm-fixed-price contract was because they still had to discuss all factors and realize that they are estimates.

Good for Lockheed Martin and why firm-fixed-price was better than the other contracts was basically due to once they negotiated a price and a contract was awarded the government was “locked-in” to paying that price.. MFC has a headquarters in Dallas, Texas as well as a second major facility in Orlando, Fla. Additional facilities are located in nine U.S. states as well as Japan and the United Kingdom. . These are some direct and indirect costs reasoning due to them having to move and ship many products back and forth. Also, they have to deal with the direct labor of the company that manufactures these items such as the rocket, missiles, etc. Plus, with them being in several different areas in the U.S. they have to pay taxes and insurance in these states as well as whatever is needed overseas for them to pay.

As for indirect cost would have to be that they have so many contracts out that they have to pay the employees that they have as well as the supervisors in that area. Another thing that has to be added to indirect cost is that they will have fixed charges such as rent, property taxes and with them having nine other facilities they have to pay rent and taxes on them as well as the indirect supplies that are needed to build missiles and fire control such as small tools, drill bits, metals, welders. .

Another major Lockheed Martin that was awarded several contracts was Mission Systems and Training, Manassas, VA, which was awarded $111,512,730 in cost-plus-incentive-fee, cost only, firm-fixed-price contract for the development, integrations and productions. This was a surface ship undersea warfare system that is also made for the Japanese government which is 100% under the FMS (Foreign Military Sales) program.. On this contract the contractor is going to incur paying all the employees, supervisors, etc, another thing is that since this particular contract is covering Pa., N.Y., Va., Fla., Mass, and several other places in N.Y..

And would cost a lot in transportation services, and depending on what is being done at what facility there could be numerous of employees, the labor, etc. Not forgetting about the indirect cost such as vacation, holiday, and sick pay and the G&A expense is all paying a big factor in the awards that they are being awarded. Several other contracts that were awarded due to them being more flexible for the government were Lockheed Martin Corp., of Sunnyvale, Calif. is being awarded a $460,375,787 contract modification. This contract modification to the engineering, manufacturing, and development contract for the Space Base Infrared System (SBIRS) revises the ground development and delivery strategy and ultimately implements a more flexible ground infrastructure. Current program funding is sufficient to execute this updated implementation. This

Modification delivers the next block (i.e. Block 10) of ground systems capability and is built upon a smart architecture that allows the four different mission areas to be segregated to achieve future sustainment efficiencies and enable independent evolution of capability.

The Block 10 delivery also provides an interface for other users as a critical step in ensuring that the SBIRS data is available to a large community of users for both real time activities as well off-line analysis. This upgraded ground system will be fielded at one primary and one back-up government facility, and it will replace the existing legacy operational ground system and other interim stand-alone software baselines. The Block 10 system will perform integrated processing of data from SBIRS and its legacy system, i.e., DSP Overhead Persistent Infrared satellites. The system will release missile warning and battle space awareness messages to war fighters and will provide other relevant data to technical intelligence and missile defense users.

Work will be performed at Sunnyvale, Calif. and Redondo Beach, Calif. The contracting activity is the Space and Missile Systems Center, Los Angeles Air Force Base, Cal.. As you go through Lockheed Martin Corporation you are able to see that they deal with the United States Department of Defense. As I research many different parts of Lockheed Martin I discovered that there
were many principal divisions from Aeronautics, Electronics, Energy & Environment, Information and Technology Services, Space & Strategic Missiles, Tactical Systems..

This second graph as you can see is showing how Lockheed Martin Corporation has grown and has dominated in the defense area over the last four years and are at just mid line with the civilian departments.

What is really interesting is that all of these divisions have different kinds of awards and they are both taking direct and indirect cost in different ways. However, I had to choose the shortest and straight to the point examples because they have so many contracts and deal in so many ways from firm-fixed price, cost reimbursement, cost-plus-fixed-fee, etc. One situation was the Lockheed Martin Corporation v. United States of America in 9/29/09 which is based on an indirect cost. One example was environmental cleanup costs that could be treated as indirect costs if they meet the three criteria.. Lockheed Martin was a difficult corporation due to them dealing is so many defense and civilian areas. Also, with them having a variety of divisions they have made themselves a very powerful company.

References:

Defense, D. o. (2013, May 20). Contracts. Retrieved June 12, 2013, from U.S. Department of Defense: http://www.defense.gov/contract.aspx?contractid=5044 Defense.gov. (2011, May 9). Retrieved May 22, 2013, from contracts for Defense Logistics Agency: http://www.defense.gov/contracts/contracts.aspx?ContractID=4530 LOCKHEED MARTIN CORP.v. U.S., 08-1160 (United States District Court September 29, 2009). Lockheed Martin Corporation History. (1996). Retrieved May 22, 2013, from Funding Universe: http://www.fundinguniverse.com/company-histories/lockheed-martin-corporation-history Lokey, H. (2012, June 11). Washington Technology Top 100. Retrieved May 22, 2013, from Washington Technology: http://washingtontecnology.com/toplists/top-100-lists/2012/lockheed-martin.aspx Murphy, J. (2009). Contracting Methods and Contract Types: Analysis of