DOT's FAA awards $32M to Leidos for critical program support, raising cost concerns
Contract Overview
Contract Amount: $32,082,257 ($32.1M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Transportation
Start Date: 2009-04-30
End Date: 2016-09-14
Contract Duration: 2,694 days
Daily Burn Rate: $11.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 10
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Official Description: SUPPORT SERVICES PROVIDING CRITICAL PROGRAM PLANNING/EXECUTION/IMPLEMENTATION AND COST & FINANCIAL ASSISTANCE
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20003
Plain-Language Summary
Department of Transportation obligated $32.1 million to LEIDOS, INC. for work described as: SUPPORT SERVICES PROVIDING CRITICAL PROGRAM PLANNING/EXECUTION/IMPLEMENTATION AND COST & FINANCIAL ASSISTANCE Key points: 1. Leidos, a major government contractor, secured a significant contract for essential program planning and execution. 2. The contract's cost-plus-fixed-fee structure warrants scrutiny for potential cost overruns. 3. While full and open competition was used, the long duration and specific nature of services may limit future competitive opportunities. 4. The engineering services sector is vital for government operations, but efficiency and cost-effectiveness are paramount.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee (CPFF) contract type, while allowing flexibility for evolving requirements, can lead to higher costs compared to fixed-price contracts. The total award value of $32M over its lifespan suggests a need for careful monitoring of expenditures against the fixed fee.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating a broad search for qualified bidders. However, the definitive contract award type and long performance period (2009-2016) might have influenced the pricing dynamics and the level of competition at the time of award.
Taxpayer Impact: Taxpayer funds are utilized for essential government program support. The CPFF structure necessitates robust oversight to ensure cost efficiency and prevent unnecessary spending.
Public Impact
Ensures continuity of critical FAA program planning and execution, directly impacting aviation safety and efficiency. Supports complex engineering and financial management tasks vital for government operations. The long-term nature of the contract suggests a sustained need for these specialized services within the FAA.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee contract type can incentivize higher spending.
- Long contract duration may limit agility and future cost-saving opportunities.
- Lack of specific performance metrics in provided data makes value assessment difficult.
Positive Signals
- Awarded through full and open competition.
- Addresses critical program planning and execution needs.
- Leidos is an established contractor with a track record.
Sector Analysis
This contract falls within the Engineering Services sector (NAICS 541330), which is crucial for government infrastructure and program management. Spending in this sector is often substantial due to the complexity and scale of government projects.
Small Business Impact
The data indicates that neither small business set-aside nor subcontracting goals were explicitly mentioned for this contract. This suggests that large businesses were the primary focus, potentially limiting opportunities for small businesses in this specific procurement.
Oversight & Accountability
The contract's long duration and CPFF structure necessitate strong oversight from the FAA to manage costs effectively and ensure that the fixed fee remains appropriate for the services rendered. Regular audits and performance reviews are critical.
Related Government Programs
- Engineering Services
- Department of Transportation Contracting
- Federal Aviation Administration Programs
Risk Flags
- Cost Plus Fixed Fee contract type.
- Long contract duration.
- Potential for cost creep.
- Limited information on performance metrics.
- No explicit small business participation noted.
Tags
engineering-services, department-of-transportation, dc, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Transportation awarded $32.1 million to LEIDOS, INC.. SUPPORT SERVICES PROVIDING CRITICAL PROGRAM PLANNING/EXECUTION/IMPLEMENTATION AND COST & FINANCIAL ASSISTANCE
Who is the contractor on this award?
The obligated recipient is LEIDOS, INC..
Which agency awarded this contract?
Awarding agency: Department of Transportation (Federal Aviation Administration).
What is the total obligated amount?
The obligated amount is $32.1 million.
What is the period of performance?
Start: 2009-04-30. End: 2016-09-14.
What was the specific justification for using a Cost Plus Fixed Fee contract type for this extensive program support, and how was the fixed fee determined to ensure fair value?
The use of a CPFF contract is typically justified when the scope of work is not precisely defined or is expected to evolve significantly, common in complex program planning and execution. The fixed fee is negotiated based on the estimated cost of performance, contractor's risk, and profit margin. However, without detailed documentation on the negotiation process, it's difficult to ascertain if the fee adequately reflects the value and risk, necessitating robust oversight to prevent potential overpayment.
Given the contract's duration (2009-2016) and the nature of program support, what mechanisms were in place to mitigate the risk of cost creep inherent in CPFF contracts?
Mitigation strategies for CPFF contracts often include detailed cost accounting standards, regular audits by the agency, clear definition of allowable costs, and performance-based milestones. The FAA would likely have implemented oversight procedures to monitor Leidos's expenditures, review invoices, and ensure adherence to the contract's scope. However, the effectiveness of these measures depends on the rigor of the agency's oversight and the contractor's compliance.
How effectively did the full and open competition process ensure competitive pricing for these specialized engineering and program support services over the contract's lifespan?
While full and open competition at the outset aims for competitive pricing, the long duration and definitive nature of this contract might have led to reduced price pressure over time. The initial competition sets the stage, but subsequent modifications or renewals could be less competitive. The CPFF structure itself can also mask true cost efficiencies, making it challenging to assess the long-term impact of the initial competition on overall value for taxpayer money.
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: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: WA-09-03562
Offers Received: 10
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 901 D ST SW STE 201, WASHINGTON, DC, 20024
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $297,780,020
Exercised Options: $32,082,257
Current Obligation: $32,082,257
Actual Outlays: $63,010
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2009-04-30
Current End Date: 2016-09-14
Potential End Date: 2022-09-02 00:00:00
Last Modified: 2022-09-07
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