Leidos Biomedical Research Inc. awarded $1.78B for NCI operational support, with 1488 days duration

Contract Overview

Contract Amount: $1,775,391,302 ($1.8B)

Contractor: Leidos Biomedical Research Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2020-08-31

End Date: 2024-09-27

Contract Duration: 1,488 days

Daily Burn Rate: $1.2M/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: NCI OPERATIONAL TASK ORDER

Place of Performance

Location: FREDERICK, FREDERICK County, MARYLAND, 21702

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $1.78 billion to LEIDOS BIOMEDICAL RESEARCH INC for work described as: NCI OPERATIONAL TASK ORDER Key points: 1. Contract value of $1.78B over nearly four years suggests significant operational scope. 2. Full and open competition indicates a broad market approach, potentially driving competitive pricing. 3. The contract's duration of 1488 days (approx. 4 years) allows for sustained support but requires ongoing performance monitoring. 4. As a Cost Plus Fixed Fee contract, contractor incentives are aligned with cost control, but require robust oversight. 5. The primary NAICS code (541715) points to substantial R&D services, aligning with NIH's mission. 6. The contract is a delivery order, suggesting it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle.

Value Assessment

Rating: good

The total award of $1.78B over approximately four years represents a substantial investment in operational support for the National Cancer Institute (NCI). While direct comparisons are difficult without knowing the specific tasks, the scale suggests a comprehensive service requirement. The Cost Plus Fixed Fee (CPFF) contract type, while common for R&D, necessitates careful monitoring to ensure value for money and prevent cost overruns. Benchmarking against similar large-scale R&D support contracts within HHS would provide further insight into pricing efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. This approach typically fosters a competitive environment, potentially leading to better pricing and innovative solutions. The number of bidders is not specified, but the open competition suggests a robust process was intended to maximize market participation and ensure fair pricing.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing and a wider range of solutions due to the full and open competition.

Public Impact

The National Cancer Institute (NCI) benefits directly through sustained operational support, enabling its research and programmatic activities. Services delivered likely encompass a broad range of R&D support, including scientific, technical, and administrative functions. The contract's geographic impact is centered in Maryland, where Leidos Biomedical Research Inc. is located and likely where much of the work will be performed. Workforce implications include the potential for significant employment opportunities within the scientific and technical support sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts require diligent oversight to manage costs effectively and ensure value.
The large contract value necessitates robust performance monitoring to ensure objectives are met.
The duration of the contract requires sustained focus on contractor performance and adherence to terms.

Positive Signals

Awarded under full and open competition, suggesting a competitive process.
Leidos Biomedical Research Inc. is a known entity in federal contracting, particularly within the health and R&D sectors.
The contract supports a critical mission area for the National Institutes of Health (NIH) and the NCI.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The NAICS code 541715 indicates a broad scope of scientific research and experimental development. The market for such services is substantial, driven by government agencies like NIH and private sector entities engaged in scientific innovation. Comparable spending benchmarks would involve analyzing other large R&D support contracts awarded by federal health agencies.

Small Business Impact

The data indicates that small business participation (sb) is false, and there is no specific small business set-aside (ss) noted for this contract. This suggests that the primary award was not targeted towards small businesses. However, the prime contractor, Leidos Biomedical Research Inc., may engage small businesses as subcontractors to fulfill specific needs or meet broader subcontracting goals, though this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would primarily reside with the National Institutes of Health (NIH), specifically the contracting officer and program officials responsible for the NCI's operational support. As a Cost Plus Fixed Fee contract, rigorous financial and performance oversight is crucial to ensure costs are reasonable and allocable, and that the contractor meets all performance requirements. Transparency is facilitated through contract reporting mechanisms, and the Inspector General for the Department of Health and Human Services would have jurisdiction over potential fraud, waste, or abuse.

Related Government Programs

National Institutes of Health (NIH) Research Support Contracts
National Cancer Institute (NCI) Operations
Federal R&D Services Contracts
Health and Human Services (HHS) IT and Scientific Support

Risk Flags

Contract duration exceeds 3 years
Cost Plus Fixed Fee contract type
Large contract value ($1.78B)

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $1.78 billion to LEIDOS BIOMEDICAL RESEARCH INC. NCI OPERATIONAL TASK ORDER

Who is the contractor on this award?

The obligated recipient is LEIDOS BIOMEDICAL RESEARCH INC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $1.78 billion.

What is the period of performance?

Start: 2020-08-31. End: 2024-09-27.

What is the historical spending pattern for NCI operational support contracts awarded to Leidos Biomedical Research Inc. or its predecessors?

Analyzing historical spending for NCI operational support reveals a long-standing relationship between the National Institutes of Health and Leidos Biomedical Research Inc. (and its predecessor, SAIC-Frederick, Inc.). Prior to this $1.78B award, significant funding has been directed towards similar operational and R&D support tasks. For instance, in the years preceding this contract, annual obligations to Leidos for NCI support often ran into the hundreds of millions of dollars. This pattern indicates a consistent need for the contractor's services and a strategic reliance by NCI on their expertise. The current award represents a substantial continuation and expansion of this established relationship, reflecting sustained demand for comprehensive support services critical to NCI's mission.

How does the Cost Plus Fixed Fee (CPFF) structure incentivize cost control for Leidos Biomedical Research Inc. on this contract?

The Cost Plus Fixed Fee (CPFF) contract structure aims to balance risk and reward between the government and the contractor. In this model, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee. This fixed fee represents the contractor's profit. While the fee is fixed, the contractor is incentivized to control costs because any savings achieved below the estimated cost directly increase the percentage of profit they realize on the fixed fee. Conversely, if costs exceed the estimate, the contractor's profit margin shrinks, although the government is obligated to pay all allowable costs. Effective oversight by the government is crucial to ensure costs remain reasonable and allocable, preventing potential overruns from eroding the value proposition.

What are the key performance indicators (KPIs) likely used to evaluate Leidos Biomedical Research Inc.'s performance under this contract?

Given the nature of operational support for a major research institution like the NCI, key performance indicators (KPIs) would likely focus on several critical areas. These would include scientific and technical performance, such as the quality and timeliness of research support, data analysis accuracy, and adherence to experimental protocols. Operational efficiency, including project management effectiveness, resource utilization, and meeting project milestones, would also be crucial. Furthermore, administrative and compliance metrics, such as timely reporting, adherence to regulatory requirements (e.g., human subjects protection, biosafety), and effective budget management, would be closely monitored. The contractor's ability to adapt to evolving research needs and maintain a skilled workforce would also be assessed.

What is the potential impact of this contract on the broader federal R&D landscape, particularly within the life sciences sector?

This significant $1.78B contract awarded to Leidos Biomedical Research Inc. for NCI operational support underscores the substantial federal investment in biomedical R&D. It highlights the critical role of large, experienced contractors in enabling the mission of agencies like the National Institutes of Health. The award signifies continued demand for comprehensive support services that allow government scientists to focus on core research objectives. Such contracts can influence the R&D landscape by shaping the capabilities of the contracting workforce, driving innovation in support services, and potentially setting benchmarks for future large-scale R&D support agreements within the life sciences sector. It also reflects a strategic decision by NCI to outsource significant operational functions.

Are there any specific risks associated with the duration of this contract (nearly four years) and the CPFF structure?

The nearly four-year duration of this contract, combined with the Cost Plus Fixed Fee (CPFF) structure, presents specific risks. A long duration can lead to scope creep if not managed tightly, where the project's objectives expand beyond the original intent, potentially increasing costs. For CPFF, a lengthy period increases the opportunity for inefficiencies to become embedded if oversight is not consistently rigorous. There's also a risk of contractor complacency over time, potentially impacting innovation or responsiveness. Furthermore, if market conditions or research priorities shift significantly during the contract period, the fixed fee might become misaligned with the actual value delivered or the effort required, necessitating careful review and potential modification. Robust contract management and performance monitoring are essential to mitigate these risks.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Leidos Holdings, Inc.

Address: 1050 BOYLES ST, FREDERICK, MD, 21702

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $1,782,770,324

Exercised Options: $1,782,770,324

Current Obligation: $1,775,391,302

Actual Outlays: $1,304,817,601

Subaward Activity

Number of Subawards: 137

Total Subaward Amount: $103,228,433

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: 75N91019D00024

IDV Type: IDC

Timeline