Leidos Inc. awarded $198M contract for NIH Agile software development, highlighting custom programming services

Contract Overview

Contract Amount: $197,904,803 ($197.9M)

Contractor: Leidos, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2019-09-30

End Date: 2024-06-28

Contract Duration: 1,733 days

Daily Burn Rate: $114.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIXED PRICE LEVEL OF EFFORT

Sector: IT

Official Description: THE PURPOSE OF THIS CONTRACT IS TO PROVIDE THE OFFICE OF EXTRAMURAL RESEARCH WITH AGILE SOFTWARE DESIGN AND DEVELOPMENT SUPPORT.

Place of Performance

Location: FREDERICK, FREDERICK County, MARYLAND, 21703

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $197.9 million to LEIDOS, INC. for work described as: THE PURPOSE OF THIS CONTRACT IS TO PROVIDE THE OFFICE OF EXTRAMURAL RESEARCH WITH AGILE SOFTWARE DESIGN AND DEVELOPMENT SUPPORT. Key points: 1. Contract value of $198M for custom computer programming services indicates significant investment in software development capabilities. 2. The use of a Definitive Contract with Fixed Price Level of Effort suggests a structured approach to managing project scope and cost. 3. A duration of 1733 days (approx. 4.7 years) points to a long-term need for these software development services. 4. The contract was awarded under Full and Open Competition, implying a broad market solicitation. 5. The primary agency is the Department of Health and Human Services, with the National Institutes of Health as the specific office. 6. The NAICS code 541511 categorizes this as Custom Computer Programming Services, a key area for federal IT infrastructure.

Value Assessment

Rating: good

The contract value of approximately $198 million over nearly five years for custom computer programming services appears to be within a reasonable range for large-scale federal IT projects. Benchmarking against similar contracts for agile software design and development support within HHS or NIH would provide a more precise value-for-money assessment. The fixed-price level-of-effort structure aims to control costs, but the total expenditure will depend on the effort expended.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of two bids suggests a competitive environment, though a higher number of bidders would typically lead to more robust price discovery and potentially lower costs for the government. The specific details of the bidding process and the evaluation criteria would further illuminate the effectiveness of the competition.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation. It ensures that the government is not limited to a single provider, increasing the likelihood of securing services at a fair market price.

Public Impact

The Office of Extramural Research within the National Institutes of Health benefits from enhanced agile software design and development support. This contract delivers critical custom computer programming services essential for the NIH's research and operational functions. The primary geographic impact is within Maryland, where the contractor Leidos, Inc. is based and likely where much of the work will be performed. The contract supports the federal IT workforce by engaging a major contractor for specialized software development expertise.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the 'level of effort' is not carefully managed and monitored.
Dependence on a single large contractor for critical software development could pose risks if performance falters.
The long contract duration might lead to technological obsolescence if not actively managed and updated.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that should yield fair pricing.
The use of a fixed-price contract structure provides cost certainty for the government.
The contractor, Leidos, Inc., is a large, established entity with significant experience in government IT services.

Sector Analysis

This contract falls within the IT services sector, specifically custom computer programming. The market for federal IT services is substantial, with agencies like HHS and NIH heavily reliant on technology to support their missions. Comparable spending benchmarks for custom software development contracts of this size and duration within the federal government would likely be in the hundreds of millions of dollars, reflecting the complexity and criticality of such services.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss': false flag suggests no specific small business subcontracting goals were mandated. This means that opportunities for small businesses to participate in this contract would likely be through subcontracting directly with the prime contractor, Leidos, Inc., rather than through direct set-aside awards.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officers and program managers within the National Institutes of Health and the Department of Health and Human Services. Transparency is facilitated through federal contract databases like FPDS. Accountability measures are embedded in the contract terms, including performance standards and payment schedules tied to deliverables. While specific Inspector General jurisdiction isn't detailed, the HHS OIG would have oversight authority over potential fraud, waste, or abuse related to this contract.

Related Government Programs

HHS IT Modernization
NIH Research Information Technology
Federal Custom Software Development
Agile Development Contracts
Definitive Contracts

Risk Flags

Potential for scope creep in agile development.
Long-term reliance on a single vendor.
Ensuring continued technological relevance over contract duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $197.9 million to LEIDOS, INC.. THE PURPOSE OF THIS CONTRACT IS TO PROVIDE THE OFFICE OF EXTRAMURAL RESEARCH WITH AGILE SOFTWARE DESIGN AND DEVELOPMENT SUPPORT.

Who is the contractor on this award?

The obligated recipient is LEIDOS, 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 $197.9 million.

What is the period of performance?

Start: 2019-09-30. End: 2024-06-28.

What is Leidos, Inc.'s track record with the federal government, particularly with the Department of Health and Human Services?

Leidos, Inc. is a major government contractor with a substantial history of serving various federal agencies, including the Department of Health and Human Services (HHS). Their portfolio includes a wide range of IT services, systems integration, and support functions. Within HHS, Leidos has secured numerous contracts over the years, often related to health IT, data analytics, and mission support. Their performance history with HHS is generally characterized by large-scale, complex projects. While specific performance metrics for individual contracts are not publicly detailed in this summary, their continued success in winning significant federal contracts suggests a generally positive track record and established capabilities in meeting government requirements. A deeper dive into past performance evaluations and contract close-outs would provide more granular insights.

How does the $198 million contract value compare to similar custom computer programming services contracts awarded by NIH or HHS?

The $198 million contract value for custom computer programming services over approximately 4.7 years is substantial, placing it among larger IT service awards within the federal government. For agencies like the National Institutes of Health (NIH) and the broader Department of Health and Human Services (HHS), which manage extensive research and health-related IT infrastructures, contracts of this magnitude are not uncommon for critical software development and modernization efforts. Benchmarking against similar contracts for agile software development, custom application support, or IT modernization initiatives within HHS/NIH would reveal if this price point is competitive. Generally, such large contracts reflect the complexity, duration, and specialized nature of the services required to support advanced research and public health missions.

What are the primary risks associated with a Fixed Price Level of Effort (FPLE) contract of this size and duration?

A primary risk with a Fixed Price Level of Effort (FPLE) contract is the potential for the government to pay for effort that does not yield the desired outcomes or exceeds what would be necessary under a more performance-based contract. If the contractor's efficiency is low, the government might end up paying a higher effective hourly rate than anticipated. Conversely, if the contractor is highly efficient, they might limit the effort to maximize profit, potentially impacting the quality or completeness of the delivered software. For the government, ensuring that the 'level of effort' is accurately estimated and that the work performed aligns with project objectives requires diligent oversight and robust performance management to mitigate risks of cost overruns or under-delivery.

How effective is 'Full and Open Competition' in ensuring value for money for custom computer programming services?

Full and open competition is generally considered the most effective method for ensuring value for money in federal contracting. By allowing all responsible sources to submit bids, it maximizes the pool of potential offerors, thereby increasing the likelihood of receiving competitive pricing and innovative solutions. For custom computer programming services, this broad competition can lead to better price discovery, as vendors vie to offer the most attractive combination of technical capability and cost. While the presence of only two bidders in this specific case might temper the intensity of competition slightly compared to a scenario with numerous bids, the principle of full and open competition itself provides a strong foundation for achieving value for taxpayers by preventing sole-source reliance and encouraging market-driven pricing.

What are the implications of this contract for the NIH's ability to adapt to evolving research needs and technological advancements?

This contract, focused on agile software design and development, is intended to enhance the NIH's adaptability. Agile methodologies are inherently designed to facilitate iterative development, rapid response to changing requirements, and continuous improvement. By securing dedicated support for these services, the NIH aims to build and maintain software systems that can more readily evolve alongside scientific discoveries and technological shifts. This allows researchers and administrators to access updated tools and platforms more quickly, supporting the dynamic nature of biomedical research. The long-term nature of the contract suggests a commitment to ongoing modernization and the ability to integrate new technologies as they emerge, thereby improving the agency's overall responsiveness.

Are there specific performance metrics or key performance indicators (KPIs) associated with this contract that are publicly available?

Specific performance metrics or Key Performance Indicators (KPIs) for this particular contract are not detailed in the provided summary data. Federal contracts typically include performance standards, service level agreements (SLAs), and evaluation criteria outlined in the contract's Statement of Work (SOW) or Performance Work Statement (PWS). These define the expected quality, timeliness, and effectiveness of the services. While the contract award notice itself does not list these granular details, they would be integral to the contract documentation managed by the contracting agency. Oversight bodies and the contracting officer would use these KPIs to monitor contractor performance and ensure compliance with the contract's objectives.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services

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: 75N97019R00003

Offers Received: 2

Pricing Type: FIXED PRICE LEVEL OF EFFORT (B)

Evaluated Preference: NONE

Contractor Details

Parent Company: Leidos Holdings, Inc.

Address: 11951 FREEDOM DR, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $197,904,803

Exercised Options: $197,904,803

Current Obligation: $197,904,803

Actual Outlays: $135,150,756

Subaward Activity

Number of Subawards: 134

Total Subaward Amount: $64,734,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline