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Pentagon Announces Massive $960 Million IT Contract

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The U.S. Department of Defense awarded nine new contracts on Monday worth some $1.121 billion in aggregate. The largest of these awards, however, swallowed more than 85% of the funds on offer. Split among five publicly traded companies, and one privately owned, this monster IT contract envisions paying out $960 million over the course of time to contractors:

  • Lockheed Martin (NYSE: LMT  )
  • Raytheon (NYSE: RTN  )
  • Harris  (NYSE: HRS  )
  • L-3 Communications (NYSE: LLL  )
  • TYBRIN Corp., a subsidiary of Jacobs Engineering Group (NYSE: JEC  )
  • SRA International

The multiple award, indefinite- delivery/indefinite-quantity (IDIQ) contract was awarded under the U.S. Air Force's Network-Centric Solutions-2 (NETCENTS-2) Application Services program, which the Air Force describes as being one of its primary vehicles for purchasing "sustainment, migration, integration, training, help desk support, testing and operational support" services. Over the course of the contract, the six named contactors will be the only ones entitled to bid (against each other) for task orders awarded under the umbrella IDIQ contract.

This contract is slated to run for an initial three-year base term, followed by four optional year-long extensions -- options that appear likely to be exercised, given that the Pentagon noted expressly that the period of performance of the contract is "seven years." 

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