HUD awards $50.4M contract for systems integration and end-user services to Leidos, Inc

Contract Overview

Contract Amount: $50,444,148 ($50.4M)

Contractor: Leidos, Inc.

Awarding Agency: Department of Housing and Urban Development

Start Date: 2019-02-01

End Date: 2024-05-14

Contract Duration: 1,929 days

Daily Burn Rate: $26.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: SYSTEMS INTEGRATION AND END USER SERVICES IGF::OT::IGF

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20410

State: District of Columbia Government Spending

Plain-Language Summary

Department of Housing and Urban Development obligated $50.4 million to LEIDOS, INC. for work described as: SYSTEMS INTEGRATION AND END USER SERVICES IGF::OT::IGF Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, which can lead to cost overruns if not managed carefully. 2. The contract was not competed, raising questions about potential price efficiencies and market responsiveness. 3. A long duration of 1929 days suggests a significant, ongoing need for these services. 4. The contract's value is substantial, indicating a critical role in supporting HUD's IT infrastructure. 5. The specific Product Service Code (PSC) is not provided, limiting detailed benchmarking. 6. The contractor, Leidos, Inc., is a large, established entity in the federal IT services space.

Value Assessment

Rating: fair

The contract's cost-plus-fixed-fee structure requires close monitoring to ensure value for money. Without a competitive bidding process, it's difficult to benchmark pricing against market rates or other similar contracts. The total award amount of $50.4 million over its duration suggests a significant investment in IT infrastructure and support. Further analysis would be needed to compare the fixed fee component and indirect rates to industry standards.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not open to competition from other potential vendors. This approach is typically used when a specific contractor possesses unique capabilities or when circumstances prevent a full and open competition. The lack of competition means that HUD did not benefit from the price discovery and potential cost savings that a competitive process could have yielded.

Taxpayer Impact: Taxpayers may have paid a higher price than necessary due to the absence of competitive pressure. Without multiple bids, there is less assurance that the government secured the best possible value.

Public Impact

The contract directly supports the Department of Housing and Urban Development's mission by ensuring the functionality of its IT systems. End-users within HUD, including employees and potentially external stakeholders interacting with HUD systems, will benefit from reliable IT services. The services provided are crucial for the day-to-day operations and data management of a major federal agency. The contract's impact is primarily concentrated within the District of Columbia, where HUD's headquarters are located.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential for cost savings.
Cost-plus-fixed-fee contract type can incentivize cost increases if not rigorously managed.
Long contract duration may indicate a lack of agile procurement or potential for vendor lock-in.

Positive Signals

Leidos, Inc. is an experienced contractor with a significant presence in federal IT services.
The contract addresses critical IT infrastructure needs for a major federal agency.
The contract is for definitive services, suggesting a clear scope of work.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, a critical component of the broader Information Technology industry. This sector is characterized by high demand for specialized expertise in areas like system integration, network management, and end-user support. The market size for federal IT services is substantial, with agencies continually investing in modernizing their infrastructure and enhancing cybersecurity. This contract represents a significant portion of spending within this niche for HUD.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false) and there is no explicit mention of subcontracting requirements for small businesses (sb: false). This suggests that the primary contractor, Leidos, Inc., will likely perform the majority of the work. Consequently, this contract may not directly contribute to opportunities for small businesses within the federal contracting ecosystem, nor does it appear to leverage the small business subcontracting program.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Department of Housing and Urban Development. The cost-plus-fixed-fee structure necessitates diligent oversight of costs and performance to ensure value. Transparency would be enhanced through regular reporting requirements and potentially through public contract databases, though specific oversight mechanisms are not detailed in the provided data. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IT Systems Modernization
End-User Support Services
Computer Systems Design
Federal IT Infrastructure

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Housing and Urban Development awarded $50.4 million to LEIDOS, INC.. SYSTEMS INTEGRATION AND END USER SERVICES IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is LEIDOS, INC..

Which agency awarded this contract?

Awarding agency: Department of Housing and Urban Development (Department of Housing and Urban Development).

What is the total obligated amount?

The obligated amount is $50.4 million.

What is the period of performance?

Start: 2019-02-01. End: 2024-05-14.

What is the track record of Leidos, Inc. in delivering similar IT systems integration and end-user services to federal agencies?

Leidos, Inc. is a well-established government contractor with extensive experience in IT services, including systems integration and end-user support. They have a long history of performing large-scale contracts for various federal agencies, such as the Department of Defense, NASA, and the Department of Veterans Affairs. Their portfolio often includes complex IT modernization efforts, cybersecurity solutions, and enterprise-wide IT support. While specific performance metrics for this particular HUD contract are not detailed, Leidos generally has a strong reputation for technical capability and program execution. However, like any large contractor, they may have faced past performance issues on specific contracts, which would typically be reviewed during a competitive procurement process. For this sole-source award, HUD would have relied on their existing knowledge of Leidos' capabilities or conducted a specific review.

How does the cost-plus-fixed-fee pricing structure compare to other contract types for similar IT services?

The Cost-Plus-Fixed-Fee (CPFF) contract type is often used when the scope of work is well-defined but the exact costs are uncertain, or when the contractor needs to be incentivized to control costs while performing a specific task. In CPFF, the government pays the contractor's actual allowable costs plus a fixed fee, which represents the contractor's profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers more flexibility for the government if requirements change, but it carries a higher risk of cost overruns if not managed diligently. Other contract types like Time and Materials (T&M) or Labor Hour (LH) are generally used for smaller, less defined efforts. For large-scale IT systems integration and support, CPFF can be appropriate, but it requires robust oversight to ensure the fixed fee remains a reasonable profit margin and that costs are controlled.

What are the potential risks associated with a sole-source award for critical IT services?

A sole-source award for critical IT services, like those provided under this HUD contract, presents several potential risks. Primarily, the absence of competition means the government may not achieve the best possible price, potentially leading to higher costs for taxpayers. It can also reduce the incentive for the incumbent contractor to innovate or improve efficiency, as there is no direct threat of losing the business to a competitor. Furthermore, sole-source awards can sometimes indicate a lack of market research or planning, or a reliance on a single vendor's unique capabilities, which can create vendor lock-in and limit future flexibility. Agencies typically justify sole-source awards based on specific criteria, such as urgency, unique capabilities, or the need for compatibility with existing systems, but these justifications should be rigorously scrutinized.

What is the historical spending pattern for systems integration and end-user services at HUD?

Analyzing historical spending patterns for systems integration and end-user services at HUD is crucial for understanding the context of this $50.4 million award. While the provided data focuses on a single contract, a comprehensive review would involve examining previous contracts awarded by HUD for similar services over several fiscal years. This would help identify trends in contract values, types of services procured, and the contractors frequently utilized. It would also reveal whether spending has been consistent, increasing, or decreasing. Understanding this history can help assess if the current award is an anomaly or part of a sustained investment strategy. Without access to HUD's broader contract database, a detailed historical analysis is not possible from the given information.

How does the contract duration of 1929 days (approximately 5.3 years) impact the overall value and risk?

A contract duration of 1929 days, or roughly 5.3 years, is quite substantial for IT services. This long duration can offer stability and predictability for both the agency and the contractor, allowing for long-term planning and the development of deep institutional knowledge. For the agency, it can ensure continuity of critical IT operations. However, it also introduces risks. Technology evolves rapidly, and a long-term contract might not be agile enough to adapt to new advancements or changing requirements, potentially leading to outdated systems or inefficient processes. Furthermore, a long commitment can limit the agency's ability to re-evaluate its needs or seek potentially better solutions from the market if they emerge. The cost-plus-fixed-fee structure over such a long period necessitates continuous monitoring to ensure the fixed fee remains appropriate and costs are managed effectively throughout the contract's life.

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 › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

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: $64,333,932

Exercised Options: $50,444,148

Current Obligation: $50,444,148

Actual Outlays: $45,459,565

Subaward Activity

Number of Subawards: 117

Total Subaward Amount: $17,337,209

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline