Lockheed Martin (LMT) Wins GIG Contracts, SAIC (SAIC) Protests

by: Matthew Potter
July 2, 2012

Category: Business Line, Companies, Contract Awards, Department of Defense, Events, Federal Budget Process, IT, Lockheed Martin, logistics, Protest, SAIC, Services | RSS 2.0

The U.S. Department of Defense operates the Global Information Grid (GIG) as a way to link its various communications and sensor systems together to ensure that information is processed and distributed as necessary. Most of the different systems the Services buy interface with the GIG one way or another either through radios, data links or networks. The goal of the GIG is to get the right information to the right person in order to support decision making and actions.

The GIG is managed by DoD and relies on a large contract to carry out these functions. Recently Lockheed Martin (LMT) was awarded this contract. It has an initial value of about $1.9 billion but the potential to grow to $4.6 billion if all options are exercised over its seven year life. The contract is an Indefinite Delivery/Indefinite Quantity (ID/IQ) type which means that the government places orders for products as needed. Normally ID/IQ contracts do not necessarily guarantee any work will be done but it can be expected with the size and importance of this contract Lockheed will get a great deal of orders from it.

SAIC (SAIC) was the losing bidder and they have moved to protest the award to Lockheed. SAIC is the incumbent for the contract and the loss of a contract this size is an issue for the company especially considering the potential budgetary issues facing the Defense Department next year.

If budget cuts do materialize and companies see much less contracts protests based on history will only increase. The different defense contractors will be fighting over a smaller pool of work so competition will be even more contentious. Normally protests have to be resolved in 100 days and contracts are placed on hold while this is being done. This means that SAIC will keep their current contract until the protest is over. Potential results could be a new competition, a reaffirmation of Lockheed or on rare cases a decision to award the contract to the protester.

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