Lockheed Martin Wins Potential $4.6 Billion Contract

UPDATED 6/18/2012: The U.S. Defense Department announces winner of new defense network operations contract.

The Defense Information Systems Agency (DISA) has announced that Lockheed Martin Information Systems & Global Solutions Division, Manassas, Virginia, has won to the potential $4.6 billion Global Information Grid Services Management-Operations contract.

The indefinite-delivery/indefinite-quantity contract includes a mix of firm-fixed-price, fixed-price with incentive, cost-plus-incentive-fee, and cost-plus and fixed-fee pricing plans. The contract is for worldwide support services necessary to carry out the day-to-day operations of Global Information Grid networks and related services, and to sustain the existing network and subsequent technology enhancement. The total cumulative face value of the contract is about $1.9 billion. The performance period includes a base period of performance of three years, from July 9, 2012 through July 8, 2015, and two two-year option periods, for a total period of seven years. Performance will predominantly be within the continental United States; however, support services are also required at multiple locations outside the continental United States. 

Original story follows:

The U.S. Defense Department is expected to announce the winner of a $4.6 billion defense networking contract very soon.

Industry experts say they expect the Defense Information Systems Agency (DISA) to announce the winner—possibly as early as today—of the potential $4.6 billion Global Information Grid Services Management-Operations (GSM-O) contract. The seven-year contract will provide for the day-to-day operations of the Defense Department’s worldwide network, known as the Defense Information Systems Network (DISN), and related telecommunications, according to DISA documentation.

Lockheed Martin, Bethesda, Maryland, is taking on the incumbent, SAIC Incorporated, McLean, Virginia.  

The contract requirements include network operations, maintenance and cybersecurity. Other specific task orders include responding to urgent requirements in theaters of operation or for humanitarian operations. The chosen contractor also will be required to integrate new capabilities into the network as necessary.

The DISN provides global voice services through a worldwide private-line telephone network. It includes capabilities that allow command and control users to ensure that the highest-priority calls achieve connection quickly, especially during a crisis. It also provides global data and video services, secure voice services, and interfaces between strategic and tactical forces, allied military networks and enhanced mobile satellite services. The military services and agencies in the Defense Department are authorized users, but other federal government departments and agencies, allies and defense contractors can also use the network if approved by the Joint Staff. 

Thomas Thoma, an associate with Burdeshaw Associates, a defense consulting firm based in Bethesda, Maryland, says the pending contract is “crucial.” Thoma also is a former acquisition director for DISA and awarded the contract preceding GSM-O. “It’s the engineering contract for the Defense Department’s telecommunications system,” he explains.

With the new contract, DISA is taking a performance-based approach, which is designed to achieve better performance, cost savings or both. Ideally, performance-based contracting allows the contractor more leeway in devising a solution for meeting government requirements. While the approach offers benefits, it also poses some challenges, Thoma says. “The government, in general, does not do performance-based contracts very well. They like to tell the contractors what to do rather than stating the requirements and letting the contractor solve the problem,” he says. “It’s a mindset that is hard for the government to get out of.” 

The predecessor contract, the DISN Global Solutions contract, was awarded to SAIC in 2001.

Because the competition is in a sensitive phase, DISA and officials with the two companies are not able to comment.