DoD's $209M DISN Infrastructure Contract Awarded to Leidos Faces Scrutiny Over Value and Competition
Contract Overview
Contract Amount: $208,997,804 ($209.0M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2016-01-19
End Date: 2018-06-30
Contract Duration: 893 days
Daily Burn Rate: $234.0K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIXED PRICE INCENTIVE
Sector: IT
Official Description: IGF::CT::IGF OPERATIONS AND SUSTAINMENT OF THE DISN INFRASTRUCTURE
Place of Performance
Location: FORT GEORGE G MEADE, ANNE ARUNDEL County, MARYLAND, 20755
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $209.0 million to LEIDOS, INC. for work described as: IGF::CT::IGF OPERATIONS AND SUSTAINMENT OF THE DISN INFRASTRUCTURE Key points: 1. The contract awarded to Leidos for DISN infrastructure operations and sustainment represents a significant investment. 2. Competition details are unclear, raising questions about price discovery and potential taxpayer impact. 3. The fixed-price incentive contract type suggests a focus on performance but requires careful monitoring. 4. The sector is critical for defense operations, highlighting the importance of efficient and cost-effective spending.
Value Assessment
Rating: questionable
The contract's value of over $200 million warrants a thorough review against industry benchmarks for similar telecommunications infrastructure services. Without detailed cost breakdowns or competitive pricing data, assessing the value for money is challenging.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
While advertised as full and open competition, the specific details of the bidding process and the number of proposals received are not provided. This lack of transparency makes it difficult to ascertain if true price discovery occurred and if the government secured the best possible pricing.
Taxpayer Impact: The potential for overpayment due to insufficient competitive pressure or inadequate price negotiation could result in millions of taxpayer dollars being spent inefficiently.
Public Impact
Ensures the operational readiness of critical defense communication networks. Supports the Department of Defense's mission by providing essential IT infrastructure. Potential for cost savings or overruns depending on contract performance and oversight. Impacts the cybersecurity posture of military communications.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of transparency in competition details.
- Difficulty in assessing value for money.
- Potential for cost inefficiencies in fixed-price incentive contracts without strong oversight.
Positive Signals
- Contract supports critical defense infrastructure.
- Fixed-price incentive contract aims to align contractor performance with government goals.
Sector Analysis
This contract falls within the Wired Telecommunications Carriers sector, crucial for government operations. Spending benchmarks for similar large-scale IT infrastructure sustainment contracts are typically in the hundreds of millions, but specific cost-effectiveness depends heavily on scope and performance metrics.
Small Business Impact
The data indicates this was not awarded to small businesses, as the prime contractor is Leidos, Inc. Further analysis would be needed to determine if small businesses were involved as subcontractors.
Oversight & Accountability
Oversight is crucial for fixed-price incentive contracts to ensure performance targets are met and costs remain controlled. The Department of Defense's Inspector General or relevant oversight bodies should monitor this contract closely for any signs of inefficiency or non-compliance.
Related Government Programs
- Wired Telecommunications Carriers
- Department of Defense Contracting
- Defense Information Systems Agency Programs
Risk Flags
- Lack of detailed competition analysis.
- Unclear value for money assessment.
- Potential for cost inefficiencies.
- Limited insight into subcontractor involvement.
- Need for robust performance monitoring.
Tags
wired-telecommunications-carriers, department-of-defense, md, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $209.0 million to LEIDOS, INC.. IGF::CT::IGF OPERATIONS AND SUSTAINMENT OF THE DISN INFRASTRUCTURE
Who is the contractor on this award?
The obligated recipient is LEIDOS, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Information Systems Agency).
What is the total obligated amount?
The obligated amount is $209.0 million.
What is the period of performance?
Start: 2016-01-19. End: 2018-06-30.
What specific performance metrics were used in the fixed-price incentive contract, and how were they measured to ensure value for money?
The fixed-price incentive contract structure implies that both the government and the contractor share in any cost savings or overruns relative to target costs and prices. Specific performance metrics would likely relate to network uptime, latency, security compliance, and response times for sustainment issues. Robust measurement and verification processes are essential to ensure the contractor is incentivized to deliver effectively and efficiently, thereby maximizing taxpayer value.
How did the 'full and open competition' process ensure competitive pricing, given the significant contract value?
A truly effective 'full and open competition' should involve multiple qualified bidders submitting proposals that are evaluated based on clearly defined criteria, including price and technical merit. To ensure competitive pricing for this $209 million contract, the solicitation should have encouraged robust bidding, and the evaluation process must have rigorously compared proposed costs against independent government estimates and market research to prevent any undue advantage or price inflation.
What is the potential risk of cost overruns or reduced service quality if the contractor, Leidos, Inc., faces unforeseen challenges in sustaining the DISN infrastructure?
The primary risk with a fixed-price incentive contract is that unforeseen challenges could lead to cost overruns, which are shared between the government and the contractor. If Leidos encounters significant technical hurdles or operational difficulties, the incentive structure might not fully mitigate the financial impact on the government. Reduced service quality is also a risk if the contractor prioritizes cost-cutting over essential maintenance or upgrades, potentially impacting the reliability and security of the DISN infrastructure.
Industry Classification
NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: HC102810R2000
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 700 N FREDERICK AVE, GAITHERSBURG, MD, 20879
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $208,997,804
Exercised Options: $208,997,804
Current Obligation: $208,997,804
Subaward Activity
Number of Subawards: 402
Total Subaward Amount: $211,190,187
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HC102812D0021
IDV Type: IDC
Timeline
Start Date: 2016-01-19
Current End Date: 2018-06-30
Potential End Date: 2018-06-30 00:00:00
Last Modified: 2023-03-15
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