DoD's $636M PTDS O&S Contract with Leidos Faces Scrutiny Over Value and Competition
Contract Overview
Contract Amount: $635,955,419 ($636.0M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2011-07-08
End Date: 2015-04-24
Contract Duration: 1,386 days
Daily Burn Rate: $458.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: PERSISTENT THREAT DETECTION SYSTEM (PTDS) OPERATIONS AND SUSTAINMENT (O&S) MS2
Place of Performance
Location: MARLTON, BURLINGTON County, NEW JERSEY, 08053
Plain-Language Summary
Department of Defense obligated $636.0 million to LEIDOS, INC. for work described as: PERSISTENT THREAT DETECTION SYSTEM (PTDS) OPERATIONS AND SUSTAINMENT (O&S) MS2 Key points: 1. Significant spending of $636M on PTDS O&S. 2. Leidos, Inc. is the sole contractor. 3. Contract awarded via full and open competition, but only one award. 4. Engineering Services sector, NAICS 541330. 5. Contract duration of 1386 days.
Value Assessment
Rating: questionable
The total award amount of $635,955,418.99 for Persistent Threat Detection System (PTDS) Operations and Sustainment (O&S) is substantial. Without specific performance metrics or benchmarks for similar systems, assessing its value is difficult. The cost-plus-fixed-fee (CPFF) contract type can lead to cost overruns if not managed tightly.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is positive for price discovery. However, the data indicates only one award was made, suggesting potential limitations in the competitive landscape or the ability of other firms to meet requirements for this specific system.
Taxpayer Impact: The substantial investment of over $635 million represents a significant allocation of taxpayer funds towards national security capabilities. Ensuring this spending delivers effective and efficient threat detection is paramount for maximizing taxpayer value.
Public Impact
Ensures persistent threat detection capabilities for national security. Supports advanced engineering and sustainment services. Potential impact on the defense technology sector through contract awards. Requires ongoing oversight to ensure effective use of funds.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- High contract value
- Sole award despite full and open competition
- Cost-plus-fixed-fee contract type
- Long contract duration
Positive Signals
- Awarded under full and open competition
- Addresses critical national security needs
Sector Analysis
The Department of Defense's spending in Engineering Services (NAICS 541330) is substantial, often involving complex R&D, design, and sustainment for advanced systems. Benchmarks for similar large-scale, long-term sustainment contracts are crucial for evaluating cost-effectiveness.
Small Business Impact
The data does not indicate any specific set-asides for small businesses, nor does it provide information on subcontracting. Further analysis would be needed to determine the extent of small business participation in this contract.
Oversight & Accountability
The Defense Contract Management Agency (DCMA) is responsible for oversight. Given the contract's value and duration, robust oversight is critical to ensure performance, manage costs, and verify that the system effectively meets its operational requirements.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- High total contract value
- Cost-Plus-Fixed-Fee contract type
- Long contract duration
- Potential for limited competition despite full and open award
Tags
engineering-services, department-of-defense, nj, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $636.0 million to LEIDOS, INC.. PERSISTENT THREAT DETECTION SYSTEM (PTDS) OPERATIONS AND SUSTAINMENT (O&S) MS2
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 $636.0 million.
What is the period of performance?
Start: 2011-07-08. End: 2015-04-24.
What specific performance metrics are used to evaluate the effectiveness and value of the PTDS O&S contract?
Evaluating the effectiveness and value of the PTDS O&S contract necessitates clear performance metrics. These should include measures of system uptime, detection accuracy rates, response times to identified threats, and overall operational readiness. Without these defined metrics, it is challenging to ascertain if the significant investment is yielding the desired national security outcomes or if the contractor is meeting all contractual obligations efficiently.
How can the Department of Defense ensure competitive pricing and prevent cost overruns in future PTDS O&S contracts, given the CPFF structure?
To ensure competitive pricing and mitigate cost overruns in future CPFF contracts, the DoD should explore strategies like incorporating more fixed-price elements where feasible, implementing stringent cost controls and audits, and actively encouraging a broader range of qualified bidders. Detailed cost breakdowns, independent cost estimates, and robust negotiation tactics are also essential. Furthermore, refining the scope of work to minimize ambiguity can prevent scope creep, a common driver of cost increases.
What is the long-term strategy for PTDS sustainment, and are there plans to foster competition for future iterations or alternative solutions?
The long-term strategy for PTDS sustainment is crucial for ensuring continued operational effectiveness and managing taxpayer investment. The DoD should outline plans for technology refresh, potential upgrades, and eventual replacement of the system. Proactive market research and engagement with industry are vital to identify emerging technologies and potential competitors. Fostering competition for future iterations or alternative solutions will be key to driving innovation and achieving better value for money.
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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 3000 LINCOLN DR E, MARLTON, NJ, 08053
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $636,295,211
Exercised Options: $636,295,211
Current Obligation: $635,955,419
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W15P7T06DE405
IDV Type: IDC
Timeline
Start Date: 2011-07-08
Current End Date: 2015-04-24
Potential End Date: 2015-04-24 00:00:00
Last Modified: 2022-09-02
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