Leidos awarded $86.5M task order for HHS OCSE federal systems support, extending through August 2026
Contract Overview
Contract Amount: $86,491,562 ($86.5M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Health and Human Services
Start Date: 2021-11-20
End Date: 2026-08-26
Contract Duration: 1,740 days
Daily Burn Rate: $49.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: THE PURPOSE IS TO AWARD A TASK ORDER FOR THE DEPARTMENT OF HEALTH AND HUMAN SERVICES, ADMINISTRATION FOR CHILDREN AND FAMILIES, OFFICE OF CHILD SUPPORT ENFORCEMENT, DIVISION OF FEDERAL SYSTEMS, OPERATIONS, MAINTENANCE, AND ENHANCEMENTS FOR OCSE FEDER
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $86.5 million to LEIDOS, INC. for work described as: THE PURPOSE IS TO AWARD A TASK ORDER FOR THE DEPARTMENT OF HEALTH AND HUMAN SERVICES, ADMINISTRATION FOR CHILDREN AND FAMILIES, OFFICE OF CHILD SUPPORT ENFORCEMENT, DIVISION OF FEDERAL SYSTEMS, OPERATIONS, MAINTENANCE, AND ENHANCEMENTS FOR OCSE FEDER Key points: 1. Task order awarded to Leidos for critical IT operations and maintenance. 2. Contract duration extends over four years, indicating a long-term need for services. 3. The award is a Delivery Order under an existing contract vehicle. 4. Services include operations, maintenance, and enhancements for federal systems. 5. The contract value suggests a significant investment in IT infrastructure for child support enforcement. 6. The fixed-price contract type aims to control costs and provide budget certainty.
Value Assessment
Rating: good
The total award amount of $86.5 million over approximately 4.7 years (from November 2021 to August 2026) averages to about $18.4 million per year. This figure appears reasonable for comprehensive IT systems operations, maintenance, and enhancement services for a federal agency like the Administration for Children and Families (ACF). Benchmarking against similar large-scale IT support contracts within HHS or other federal agencies would provide a more precise value-for-money assessment, but the annual spend is within expected ranges for such critical infrastructure support.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This task order was awarded under a full and open competition, indicating that multiple vendors had the opportunity to bid. The fact that it is a Delivery Order suggests it was placed against a pre-existing Indefinite Delivery/Indefinite Quantity (IDIQ) contract that itself was competed. The specific number of bidders for this particular task order is not provided, but the full and open nature of the underlying contract implies a competitive environment that should drive favorable pricing and service quality.
Taxpayer Impact: A full and open competition generally benefits taxpayers by ensuring that the government receives the best possible value through a wide range of offers and competitive pricing, rather than being limited to a single provider.
Public Impact
The primary beneficiaries are the Administration for Children and Families (ACF) and the Office of Child Support Enforcement (OCSE) within HHS, ensuring the continuity and improvement of vital federal systems. Services delivered include the essential operations, maintenance, and enhancements of IT systems that support child support enforcement functions nationwide. The geographic impact is national, as these federal systems likely support state and local agencies across the United States. Workforce implications may include the retention of skilled IT professionals by Leidos to perform these specialized services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for vendor lock-in if the incumbent contractor's systems become deeply integrated and difficult to transition.
- Reliance on a single task order for a significant portion of IT support could pose a risk if the contractor faces performance issues or financial instability.
Positive Signals
- Awarded under full and open competition, suggesting a competitive process that should yield good value.
- The fixed-price contract type provides cost certainty for the government.
- The long-term nature of the task order (nearly 5 years) indicates a stable and ongoing need, allowing for focused service delivery and potential efficiency gains.
Sector Analysis
This contract falls within the Computer Systems Design Services sector, a critical component of the broader IT services industry. The federal government is a major consumer of these services, investing heavily in maintaining and modernizing its vast IT infrastructure. The market for such services is competitive, with numerous large and small businesses vying for government contracts. This specific task order supports a vital function within HHS, highlighting the government's reliance on specialized IT support for its mission-critical operations. Comparable spending benchmarks for IT operations and maintenance contracts within federal agencies often run into tens or hundreds of millions of dollars annually, depending on the scope and complexity.
Small Business Impact
The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Leidos, Inc. is a large business. While there is no direct small business set-aside, large prime contractors are often required to meet small business subcontracting goals. The extent to which Leidos will utilize small businesses for subcontracting will determine the direct impact on the small business ecosystem for this specific award.
Oversight & Accountability
Oversight for this task order would typically be managed by the contracting officer and the program office within the Administration for Children and Families (ACF) at HHS. Performance monitoring, regular status meetings, and adherence to the contract's terms and conditions are standard oversight mechanisms. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any issues of fraud, waste, or abuse arise.
Related Government Programs
- HHS IT Modernization
- ACF IT Operations
- OCSE Systems Maintenance
- Federal Civilian IT Services
- GSA Schedule IT Contracts
Risk Flags
- Long-term reliance on a single vendor
- Potential for scope creep in enhancements
- Performance degradation risk
- Integration challenges with future systems
Tags
it-services, operations-and-maintenance, computer-systems-design, health-and-human-services, administration-for-children-and-families, office-of-child-support-enforcement, firm-fixed-price, delivery-order, full-and-open-competition, large-business, virginia, federal-systems
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $86.5 million to LEIDOS, INC.. THE PURPOSE IS TO AWARD A TASK ORDER FOR THE DEPARTMENT OF HEALTH AND HUMAN SERVICES, ADMINISTRATION FOR CHILDREN AND FAMILIES, OFFICE OF CHILD SUPPORT ENFORCEMENT, DIVISION OF FEDERAL SYSTEMS, OPERATIONS, MAINTENANCE, AND ENHANCEMENTS FOR OCSE FEDER
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 $86.5 million.
What is the period of performance?
Start: 2021-11-20. End: 2026-08-26.
What is Leidos' track record with HHS and similar federal IT contracts?
Leidos, Inc. has a substantial history of contracting with the Department of Health and Human Services (HHS) and other federal agencies, particularly in the IT services domain. They are a major federal contractor known for providing a wide range of IT solutions, including systems integration, operations and maintenance, cybersecurity, and data analytics. Their experience often spans complex, mission-critical systems similar to those managed by the Administration for Children and Families (ACF). A review of past performance evaluations and contract awards would reveal specific details about their success rates, any past performance issues, and their overall reputation within the federal IT contracting space. Their extensive portfolio suggests a strong capability to handle large-scale, long-term IT support requirements.
How does the $86.5 million value compare to similar federal IT operations and maintenance contracts?
The $86.5 million total value for this task order, spread over approximately 4.7 years, equates to an average annual spend of roughly $18.4 million. This figure is generally considered moderate to significant for IT operations and maintenance (O&M) services supporting a federal agency's core systems. Larger, more complex agencies or those with more extensive legacy systems might see annual O&M budgets in the tens or even hundreds of millions. For a division like the Office of Child Support Enforcement (OCSE) within ACF, which manages critical national systems, this level of investment appears aligned with industry norms for maintaining and enhancing such infrastructure. Benchmarking against contracts for similar functions within agencies like SSA, CMS, or other large HHS components would provide a more precise comparison.
What are the primary risks associated with this contract for the government?
Key risks for the government include potential over-reliance on a single contractor (Leidos) for critical IT functions, which could lead to vendor lock-in and reduced flexibility. Performance risk is also present; any degradation in service quality from Leidos could impact the operations of the child support enforcement systems, potentially affecting states and families. Furthermore, cost risk exists, although mitigated by the firm-fixed-price structure. If unforeseen technical challenges arise or the scope requires significant changes, managing contract modifications and associated costs could become complex. Finally, there's a risk related to the contractor's financial stability or strategic shifts, although Leidos is a large, established company.
How effective are IT operations and maintenance contracts like this in ensuring the reliability of federal systems?
Contracts for IT operations and maintenance (O&M) are fundamental to ensuring the reliability and availability of federal systems. They provide the dedicated resources and expertise necessary for routine upkeep, patching, system monitoring, and incident response, which are crucial for preventing downtime and security breaches. By including 'enhancements,' this contract also allows for necessary upgrades and modernization, preventing systems from becoming obsolete. The effectiveness hinges on clear performance metrics (Service Level Agreements - SLAs), robust government oversight, and the contractor's ability to execute. When well-managed, these contracts are highly effective in maintaining operational continuity for essential government functions like child support enforcement.
What are the historical spending patterns for IT services within HHS or ACF?
HHS, as one of the largest federal departments, consistently spends billions of dollars annually on IT services, encompassing a wide range of needs from electronic health records and research computing to administrative systems and cybersecurity. The Administration for Children and Families (ACF), while a smaller component than agencies like CMS or NIH, also represents a significant IT spend, particularly for its core operational systems like those managed by OCSE. Historical data would likely show a steady or increasing investment in IT O&M and modernization efforts, reflecting the government's ongoing need to maintain and upgrade its digital infrastructure. Spending patterns are influenced by agency priorities, budget allocations, and the lifecycle of existing systems.
What is the significance of this contract being a Delivery Order under a larger contract vehicle?
This contract being a Delivery Order (DO) signifies that it was placed against a pre-existing Indefinite Delivery/Indefinite Quantity (IDIQ) contract, likely awarded through a prior full and open competition. This approach allows agencies to streamline the procurement process for specific needs once a broader contract vehicle is established. It means that the foundational terms, conditions, and pricing structures were negotiated and competed earlier. The DO mechanism provides flexibility for agencies to order specific services or quantities up to the IDIQ's ceiling. For taxpayers, this can mean faster acquisition and potentially better pricing due to the initial competition, though the specific value of each DO still warrants scrutiny.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - DELIVERY
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: C-86159-O
Offers Received: 4
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 1750 PRESIDENTS ST, 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: $102,949,904
Exercised Options: $86,491,562
Current Obligation: $86,491,562
Actual Outlays: $65,353,842
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HHSN316201200044W
IDV Type: GWAC
Timeline
Start Date: 2021-11-20
Current End Date: 2026-08-26
Potential End Date: 2026-08-26 00:00:00
Last Modified: 2025-09-29
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