Leidos Inc. awarded $16.7M contract for engineering services by Department of Defense
Contract Overview
Contract Amount: $16,744,671 ($16.7M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2005-10-24
End Date: 2024-01-25
Contract Duration: 6,667 days
Daily Burn Rate: $2.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 5
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Place of Performance
Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810
Plain-Language Summary
Department of Defense obligated $16.7 million to LEIDOS, INC. for work described as: Key points: 1. Contract value of $16.7M over a 6,667-day period suggests significant long-term engagement. 2. The 'Cost Plus Fixed Fee' pricing structure may incentivize cost overruns if not closely monitored. 3. A full and open competition indicates a potentially competitive bidding process. 4. The contract's duration spans over 18 years, raising questions about adaptability to evolving needs. 5. Engineering services are critical for defense operations, implying a high-stakes performance environment. 6. The award to a single contractor, Leidos, Inc., warrants scrutiny for potential single-source dependency risks.
Value Assessment
Rating: fair
The contract value of $16.7 million spread over 18 years averages to approximately $910,000 annually. Without specific benchmarks for comparable engineering services contracts within the Department of Defense, it is difficult to definitively assess value for money. The Cost Plus Fixed Fee (CPFF) contract type can sometimes lead to higher costs compared to fixed-price contracts if not managed diligently, as the contractor is reimbursed for allowable costs plus a fixed fee. Further analysis would require comparing the scope of services and the fixed fee percentage against industry standards and similar DoD contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'Full and Open Competition,' suggesting that all responsible sources were permitted to submit bids. The presence of 5 bids indicates a degree of competition. However, the fact that the award went to Leidos, Inc. means that while the initial competition was broad, the long-term execution relies on a single entity. The level of competition is a positive sign for price discovery, but the ultimate value realized depends on the specific terms and performance over the contract's extensive duration.
Taxpayer Impact: A full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation. The fact that multiple bids were received suggests that the government had options, potentially leading to a more favorable outcome than a sole-source award.
Public Impact
The Department of Defense benefits from specialized engineering expertise to support its complex operational requirements. Services delivered likely include design, analysis, testing, and technical support for defense systems and infrastructure. The geographic impact is likely national, supporting various DoD installations and projects across the United States. The contract supports a workforce of engineers and technical specialists, contributing to employment in the defense sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (18 years) may lead to outdated technology or processes.
- Cost Plus Fixed Fee (CPFF) contract type can incentivize higher spending if not rigorously overseen.
- Reliance on a single contractor (Leidos, Inc.) for critical engineering services poses a risk if performance falters.
- Lack of specific performance metrics or KPIs makes it difficult to gauge contractor effectiveness.
- Potential for scope creep over the extended period, increasing overall costs beyond initial estimates.
Positive Signals
- Awarded through full and open competition, indicating a potentially robust selection process.
- Contractor (Leidos, Inc.) is a large, established entity with significant experience in government contracting.
- Engineering services are essential for national defense, suggesting a critical need being met.
- The contract's long duration could imply a stable, predictable need for these services.
Sector Analysis
Engineering services are a vital component of the broader professional, scientific, and technical services sector. This sector is characterized by specialized expertise and often involves long-term engagements for complex projects. Within the defense industry, engineering services are crucial for the research, development, acquisition, and sustainment of military platforms and systems. Comparable spending benchmarks are difficult to establish without knowing the specific type of engineering services, but the overall federal spending on engineering and architectural services is substantial, often running into billions of dollars annually across various agencies.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large contract awarded to a major prime contractor, Leidos, Inc., there may be opportunities for small businesses to participate as subcontractors. However, the extent of small business subcontracting is not detailed in the provided data. Analysis of subcontracting plans and actual performance would be necessary to determine the impact on the small business ecosystem.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Defense's contract management and administration functions, likely through the Defense Contract Management Agency (DCMA) given the 'sa' field. Accountability measures would be defined by the contract's terms and conditions, including performance standards and reporting requirements. Transparency is generally facilitated through contract databases like FPDS, where basic award information is published. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.
Related Government Programs
- Defense Engineering Services
- Professional, Scientific, and Technical Services
- Department of Defense IT Services
- Military Construction Support
- Aerospace Engineering Support
Risk Flags
- Long contract duration
- Cost Plus Fixed Fee pricing
- Potential for vendor lock-in
- Lack of specific performance metrics
Tags
defense, department-of-defense, engineering-services, leidos-inc, full-and-open-competition, cost-plus-fixed-fee, long-term-contract, professional-scientific-and-technical-services, massachusetts, delivery-order
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $16.7 million to LEIDOS, INC.. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is LEIDOS, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $16.7 million.
What is the period of performance?
Start: 2005-10-24. End: 2024-01-25.
What is the historical spending trend for engineering services by the Department of Defense?
The Department of Defense is a significant consumer of engineering services, with annual spending often reaching tens of billions of dollars. This spending supports a wide array of activities, from research and development of new weapon systems to the sustainment and modernization of existing platforms and infrastructure. Historical data shows a consistent demand, driven by the need to maintain technological superiority and operational readiness. Factors influencing spending include geopolitical events, technological advancements, and budget allocations. Analyzing trends requires looking at specific categories of engineering services, such as aerospace, civil, electrical, and mechanical engineering, as well as the specific defense agencies or branches procuring these services.
How does the Cost Plus Fixed Fee (CPFF) contract type compare to other pricing arrangements in terms of cost efficiency for the government?
The Cost Plus Fixed Fee (CPFF) contract type is often used when the scope of work is not well-defined or involves significant uncertainty, such as in research and development. In a CPFF contract, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While this structure allows for flexibility and encourages innovation in uncertain environments, it carries a higher risk of cost overruns for the government compared to fixed-price contracts. The government bears the risk of cost increases, and the contractor has less incentive to control costs once the contract is awarded, as their fee is fixed. Effective oversight and robust cost accounting standards are crucial to mitigate these risks and ensure value for money.
What are the potential risks associated with a contract duration of over 18 years?
A contract duration of over 18 years presents several significant risks. Firstly, technology and operational requirements can change dramatically over such a long period, potentially rendering the contracted services or solutions obsolete or inefficient. This can lead to the government paying for services that are no longer optimal or even necessary. Secondly, long-term contracts can reduce flexibility, making it difficult for the government to adapt to new strategies, emerging threats, or budget realignments. Thirdly, the contractor may become complacent or less incentivized to innovate and maintain high performance levels over time, especially if competition is limited during subsequent phases or renewals. Finally, institutional knowledge and personnel turnover within both the government and the contractor organization can lead to knowledge gaps and execution challenges.
What is Leidos, Inc.'s track record with Department of Defense contracts?
Leidos, Inc. is a major government contractor with a substantial history of performing work for the Department of Defense across various domains, including IT, intelligence, and defense systems. They have been awarded numerous large-scale contracts, often involving complex technical and engineering services. Their track record generally includes successful execution of significant programs, but like any large contractor, they have also faced scrutiny and challenges on specific contracts related to performance, cost, or schedule. A comprehensive review would involve examining specific contract performance reports, past performance evaluations, and any significant disputes or contract modifications associated with their DoD portfolio.
How does the 'MASSACHUSETTS' state code (ST: MA) impact the contract's execution or oversight?
The 'MASSACHUSETTS' state code (ST: MA) likely indicates the primary location of contract performance or the contractor's operational base relevant to this award. While it doesn't fundamentally alter the nature of the engineering services or the Department of Defense's requirements, it can have implications for oversight, administration, and potentially state-specific regulations or economic impacts. For instance, if performance is concentrated in Massachusetts, it might involve coordination with state agencies on environmental or labor matters. It also suggests that a portion of the contract spending will flow into the Massachusetts economy, supporting local jobs and businesses. Oversight activities by the contracting officer and administrative teams may also be geographically aligned with this location.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 5
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 11951 FREEDOM DR, RESTON, VA, 20190
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Parent Contract
Parent Award PIID: N0003904D0002
IDV Type: IDC
Timeline
Start Date: 2005-10-24
Current End Date: 2024-01-25
Potential End Date: 2024-01-25 00:00:00
Last Modified: 2024-01-25
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