DoD Awards $177M for DCGS-A Tech Insertion Support to Leidos, Inc
Contract Overview
Contract Amount: $176,684,720 ($176.7M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2011-09-23
End Date: 2014-09-24
Contract Duration: 1,097 days
Daily Burn Rate: $161.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: DISTRIBUTED COMMON GROUND SYSTEM - ARMY (DCGS-A) TECHNOLOGY INSERTION SUPPORT
Place of Performance
Location: ABERDEEN PROVING GROUND, HARFORD County, MARYLAND, 21005
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $176.7 million to LEIDOS, INC. for work described as: DISTRIBUTED COMMON GROUND SYSTEM - ARMY (DCGS-A) TECHNOLOGY INSERTION SUPPORT Key points: 1. Leidos, Inc. secured a significant contract for crucial Army intelligence technology. 2. The contract was awarded under full and open competition, suggesting a competitive bidding process. 3. The use of Cost Plus Fixed Fee (CPFF) pricing introduces potential cost overruns. 4. This spending falls within Engineering Services, a sector vital for defense modernization.
Value Assessment
Rating: fair
The contract's Cost Plus Fixed Fee (CPFF) structure can lead to higher final costs compared to fixed-price contracts if not managed carefully. Benchmarking against similar CPFF contracts for complex IT systems is necessary to assess value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Awarded under full and open competition, this method generally promotes competitive pricing. However, the CPFF structure may limit the direct price discovery benefits typically seen in fixed-price contracts.
Taxpayer Impact: Taxpayers may face increased costs due to the CPFF pricing structure, which allows for reimbursement of costs plus a fixed fee, potentially exceeding initial estimates if costs escalate.
Public Impact
Enhances critical intelligence capabilities for the U.S. Army. Supports the modernization of battlefield information systems. Impacts soldiers' ability to access and analyze data in theater. Ensures technological relevance in a rapidly evolving threat landscape.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- CPFF pricing structure carries inherent cost escalation risk.
- Contract duration is substantial, increasing exposure to changing requirements.
- No small business participation noted.
Positive Signals
- Awarded through full and open competition.
- Supports a critical defense intelligence program.
- Technology insertion ensures system modernization.
Sector Analysis
This contract falls under Engineering Services, specifically related to intelligence systems. Spending in this area is crucial for maintaining technological superiority in defense, with benchmarks varying widely based on system complexity and scope.
Small Business Impact
The data indicates no small business participation in this contract. This suggests that the prime contractor, Leidos, Inc., did not subcontract with small businesses for this specific award, potentially missing opportunities for small business engagement.
Oversight & Accountability
The contract was awarded via a delivery order under a larger contract, implying some level of pre-qualification. However, the CPFF structure necessitates robust oversight to control costs and ensure performance aligns with the fixed fee.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Cost Plus Fixed Fee (CPFF) pricing model.
- Long contract duration.
- No small business participation.
- Potential for scope creep.
- Reliance on a single large contractor.
Tags
engineering-services, department-of-defense, md, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $176.7 million to LEIDOS, INC.. DISTRIBUTED COMMON GROUND SYSTEM - ARMY (DCGS-A) TECHNOLOGY INSERTION SUPPORT
Who is the contractor on this award?
The obligated recipient is LEIDOS, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $176.7 million.
What is the period of performance?
Start: 2011-09-23. End: 2014-09-24.
What is the projected cost efficiency of the CPFF contract compared to alternative pricing models for similar technology insertion programs?
CPFF contracts are generally less cost-efficient for the government than fixed-price contracts, as they shift cost risk to the government. While they allow for flexibility in evolving projects, they require stringent oversight to prevent cost overruns. Benchmarking against fixed-price or cost-plus-incentive-fee contracts for comparable IT modernization efforts would reveal potential savings lost.
What are the primary risks associated with the long duration and CPFF structure of this contract for the Department of the Army?
The primary risks include potential cost overruns due to the CPFF structure, where contractor profit is fixed regardless of actual costs incurred. The long duration (nearly 3 years) increases the risk of scope creep, requirement changes, and technological obsolescence, potentially leading to a system that is outdated or over budget by completion.
How effectively does this contract support the Army's long-term intelligence technology modernization goals?
The contract's effectiveness hinges on Leidos's ability to deliver timely and relevant technological insertions within the defined scope. While supporting modernization, the CPFF structure and lack of explicit small business involvement might indicate missed opportunities for innovation or cost savings. Continuous monitoring of performance metrics and adherence to modernization roadmaps are crucial.
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: 2
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: $568,406,686
Exercised Options: $369,049,511
Current Obligation: $176,684,720
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: 2011-09-23
Current End Date: 2014-09-24
Potential End Date: 2014-09-24 00:00:00
Last Modified: 2022-09-02
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