Leidos Inc. awarded $516.8M contract for wired telecommunications, highlighting significant defense IT infrastructure investment
Contract Overview
Contract Amount: $516,784,409 ($516.8M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2009-04-30
End Date: 2013-09-30
Contract Duration: 1,614 days
Daily Burn Rate: $320.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: TIME AND MATERIALS
Sector: IT
Official Description: LABOR - CNM EFFORT - YKEE2N
Place of Performance
Location: FALLS CHURCH, FALLS CHURCH CITY County, VIRGINIA, 22040
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $516.8 million to LEIDOS, INC. for work described as: LABOR - CNM EFFORT - YKEE2N Key points: 1. Contract value represents a substantial investment in critical telecommunications infrastructure. 2. Competition dynamics suggest a robust market for these specialized services. 3. Contract duration indicates a long-term need for sustained support. 4. Performance context is crucial given the reliance on secure and reliable communication networks. 5. Sector positioning places this contract within the vital Defense Information Systems Agency's operational framework. 6. The use of Time and Materials pricing warrants scrutiny for cost control.
Value Assessment
Rating: fair
The total award of over $516 million for wired telecommunications services over a period of approximately four years is a significant sum. Benchmarking this against similar large-scale telecommunications contracts within the Department of Defense is challenging without more granular data on the specific services rendered. However, the Time and Materials (T&M) pricing structure, while flexible, can present risks for cost overruns if not meticulously managed and monitored. The value proposition hinges on the effective delivery of essential communication services, but the potential for escalating costs under T&M requires careful oversight.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of two bidders suggests a competitive environment, though the exact number of proposals received and the evaluation process are not detailed here. Full and open competition generally fosters price discovery and encourages contractors to offer competitive pricing to win the award.
Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing inherent in a full and open solicitation. This process aims to ensure that the government secures services at a reasonable cost by leveraging market forces.
Public Impact
The Department of Defense, specifically the Defense Information Systems Agency (DISA), is the primary beneficiary, ensuring robust communication capabilities. Services delivered likely include the installation, maintenance, and operation of wired telecommunications networks essential for military operations. Geographic impact is likely nationwide or global, supporting deployed forces and domestic command centers. Workforce implications may involve specialized technicians and engineers for network management and support.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Time and Materials (T&M) pricing can lead to cost escalation if not tightly controlled.
- The duration of the contract (over 4 years) necessitates ongoing vigilance regarding performance and cost-effectiveness.
- Lack of specific performance metrics makes it difficult to assess the true value for money delivered.
- The sheer scale of the award warrants detailed scrutiny of every expenditure.
Positive Signals
- Awarded through full and open competition, suggesting a competitive bidding process.
- The contract supports critical national defense communication infrastructure.
- The contractor, Leidos, Inc., is a well-established entity in the government contracting space.
Sector Analysis
This contract falls within the telecommunications services sector, specifically focusing on wired infrastructure. The market for such services is characterized by high barriers to entry due to specialized technical expertise and infrastructure requirements. Government spending in this area is substantial, driven by the need for secure, reliable, and high-capacity communication networks for national security and operational efficiency. Comparable spending benchmarks would typically involve other large-scale telecommunications support contracts awarded to major defense contractors.
Small Business Impact
The data indicates this contract was not set aside for small businesses (sb: false). There is no explicit information on subcontracting plans for small businesses. Without this detail, it's difficult to assess the direct impact on the small business ecosystem, though large prime contracts often have subcontracting requirements that can benefit smaller firms.
Oversight & Accountability
Oversight mechanisms would typically involve contract officers, CORs (Contracting Officer Representatives), and potentially Inspector General (IG) reviews, especially given the significant dollar value. Transparency is assessed through contract award databases and reporting requirements. Accountability measures are embedded in the contract terms, performance standards, and payment structures, with the T&M nature requiring particularly diligent monitoring.
Related Government Programs
- Defense Information Systems Agency (DISA) Contracts
- Wired Network Infrastructure Services
- Telecommunications Support for Military Operations
- DoD IT Modernization Programs
Risk Flags
- Potential for cost overruns due to Time and Materials pricing.
- Lack of specific performance metrics makes value assessment difficult.
- Long contract duration requires sustained oversight.
- Complexity of managing national/global telecommunications infrastructure.
Tags
it, defense, wired-telecommunications, leidos-inc, department-of-defense, defense-information-systems-agency, full-and-open-competition, time-and-materials, delivery-order, virginia, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $516.8 million to LEIDOS, INC.. LABOR - CNM EFFORT - YKEE2N
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 $516.8 million.
What is the period of performance?
Start: 2009-04-30. End: 2013-09-30.
What is Leidos, Inc.'s track record with similar large-scale telecommunications contracts for the Department of Defense?
Leidos, Inc. has a significant history of performing large-scale IT and telecommunications contracts for the Department of Defense and other federal agencies. They are known for their expertise in complex systems integration, network engineering, and cybersecurity solutions. While specific details on past performance for contracts identical in scope and value to this one require deeper analysis of contract databases, Leidos has consistently been a major player in securing and executing such awards. Their track record generally indicates a capacity to manage complex projects, though like any large contractor, performance can vary across individual contracts. A thorough review would involve examining past performance evaluations, any reported disputes, and the successful completion of similar telecommunications infrastructure projects.
How does the Time and Materials (T&M) pricing structure compare to other contract types for similar services, and what are the implications for value?
Time and Materials (T&M) contracts are often used when the scope of work is not clearly defined or is expected to change significantly. They reimburse the contractor for direct labor hours at specified rates and for the actual cost of materials. Compared to fixed-price contracts, T&M offers flexibility but carries a higher risk of cost overruns for the government if not managed diligently. For telecommunications infrastructure, where unforeseen issues can arise, T&M can be appropriate. However, it places a significant burden on the government to closely monitor labor hours, resource utilization, and material costs to ensure value. Fixed-price contracts, conversely, provide greater cost certainty for the government but may require a more precisely defined scope upfront and could lead to less contractor flexibility if changes are needed.
What are the key performance indicators (KPIs) typically associated with wired telecommunications contracts of this magnitude for DISA?
Key Performance Indicators (KPIs) for large wired telecommunications contracts with DISA typically revolve around network availability, latency, bandwidth utilization, mean time to repair (MTTR), and security compliance. For instance, network availability might be mandated at 99.99% or higher. Latency targets would be set to ensure real-time communication capabilities for critical applications. Bandwidth utilization metrics ensure that the network is efficiently supporting the required data flow. MTTR is crucial for minimizing downtime during outages. Security compliance, including adherence to DoD cybersecurity standards and protocols, is paramount. The effectiveness of the contractor is measured against these KPIs, with potential penalties or incentives tied to performance outcomes.
What is the historical spending trend for wired telecommunications services by the Department of Defense over the last five years?
Historical spending by the Department of Defense (DoD) on wired telecommunications services has been substantial and generally increasing, driven by the need to modernize aging infrastructure, enhance cybersecurity, and support expanding digital operations. While precise figures for 'wired telecommunications' as a distinct category can be difficult to isolate due to overlapping IT and network services classifications, overall DoD spending on IT and communications infrastructure runs into the tens of billions of dollars annually. Trends indicate a shift towards more software-defined networking, cloud integration, and secure, high-speed data transport. Factors like global geopolitical tensions and the increasing reliance on data-driven decision-making continue to fuel demand and investment in robust telecommunications capabilities across all branches of the military.
How does the geographic location of the contractor's operations (Virginia) potentially impact service delivery for a national or global defense network?
The contractor's primary location in Virginia is significant given that the Defense Information Systems Agency (DISA) headquarters is also located in the National Capital Region (NCR). This proximity can facilitate closer collaboration, faster response times for critical issues, and more efficient oversight by government personnel. Virginia is also a hub for defense contractors and IT services, providing access to a skilled workforce and established infrastructure. For a national or global defense network, the contractor's Virginia base would likely serve as a central management and coordination point, with field operations and support distributed across various military installations worldwide. Effective service delivery would depend on the contractor's established logistical capabilities and regional support networks, regardless of their primary headquarters' location.
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
Offers Received: 2
Pricing Type: TIME AND MATERIALS (Y)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 10260 CAMPUS POINT DRIVE,, SAN DIEGO, CA, 92121
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $516,784,409
Exercised Options: $516,784,409
Current Obligation: $516,784,409
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: DCA20002D5001
IDV Type: IDC
Timeline
Start Date: 2009-04-30
Current End Date: 2013-09-30
Potential End Date: 2013-09-30 00:00:00
Last Modified: 2024-07-19
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