Leidos awarded $548M contract for Terminal Flight Data Manager, impacting air traffic management systems
Contract Overview
Contract Amount: $548,465,252 ($548.5M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Transportation
Start Date: 2016-06-28
End Date: 2028-06-29
Contract Duration: 4,384 days
Daily Burn Rate: $125.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS AWARD FEE
Sector: IT
Official Description: TERMINAL FLIGHT DATA MANAGER IGF::OT::IGF
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20591
Plain-Language Summary
Department of Transportation obligated $548.5 million to LEIDOS, INC. for work described as: TERMINAL FLIGHT DATA MANAGER IGF::OT::IGF Key points: 1. Contract value represents significant investment in modernizing air traffic control infrastructure. 2. Competition dynamics suggest a robust market for complex IT systems integration in aviation. 3. Performance risk is moderate given the critical nature of flight data management. 4. This contract is a key component of the FAA's NextGen air transportation modernization efforts. 5. The sector is characterized by high barriers to entry due to specialized knowledge and security requirements. 6. Contract type (Cost Plus Award Fee) incentivizes performance but requires careful oversight.
Value Assessment
Rating: good
The contract's total value of $548.5 million over its potential duration is substantial. Benchmarking against similar large-scale IT modernization contracts within the federal government, this figure appears within a reasonable range, considering the complexity and criticality of air traffic management systems. The Cost Plus Award Fee structure allows for flexibility and performance incentives, which can be a value-driver if managed effectively. However, detailed cost breakdowns and comparisons to industry benchmarks for specific services would be needed for a more precise value-for-money assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of three bidders (as suggested by 'no': 3) signifies a healthy level of competition for this significant IT services contract. This competitive environment is generally favorable for price discovery and ensures that the government receives proposals from a range of qualified vendors, potentially leading to better terms and innovative solutions.
Taxpayer Impact: A full and open competition process for a contract of this magnitude helps ensure that taxpayer dollars are used efficiently by driving competitive pricing and encouraging the best possible technical solutions.
Public Impact
The Federal Aviation Administration (FAA) and its air traffic controllers are the primary beneficiaries, receiving upgraded systems. Services delivered include computer systems design and integration for critical flight data management. The geographic impact is national, as the Terminal Flight Data Manager system supports air traffic across the United States. Workforce implications include potential needs for specialized IT professionals for development, implementation, and maintenance.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Award Fee contracts can lead to cost overruns if not rigorously managed and monitored.
- The long duration of the contract (over 10 years) introduces risks related to technological obsolescence and changing requirements.
- Dependence on a single contractor for such a critical system raises concerns about vendor lock-in and future pricing power.
Positive Signals
- Awarding under full and open competition suggests a strong initial vetting of capabilities and pricing.
- The Cost Plus Award Fee structure, if well-defined with clear performance metrics, can incentivize high-quality delivery.
- The contract's alignment with the FAA's NextGen initiative indicates a strategic investment in improving aviation safety and efficiency.
Sector Analysis
The aviation IT sector is characterized by highly specialized requirements, stringent regulatory oversight, and significant investment in modernization. Contracts like this are crucial for upgrading legacy systems to meet the demands of increased air traffic and enhanced safety protocols, such as those under the FAA's NextGen program. Market size for such specialized systems is substantial, driven by government agencies and large aerospace corporations. Comparable spending benchmarks would likely be in the hundreds of millions to billions of dollars for similar large-scale, mission-critical IT infrastructure projects.
Small Business Impact
The data indicates this contract was not set aside for small businesses (sb: false) and does not explicitly mention subcontracting goals for small businesses. This suggests that the primary award went to a large prime contractor, Leidos, Inc. While large contracts can sometimes include subcontracting opportunities for small businesses, the absence of specific set-aside information implies that the direct award did not prioritize small business participation. Further analysis of subcontracting plans would be needed to assess the impact on the small business ecosystem.
Oversight & Accountability
Oversight for this contract is primarily the responsibility of the Federal Aviation Administration (FAA). As a Cost Plus Award Fee contract, performance metrics and cost controls will be critical areas of oversight. Transparency is generally maintained through contract award databases and reporting requirements. The Department of Transportation's Office of Inspector General (OIG) would have jurisdiction to investigate potential fraud, waste, or abuse related to this contract.
Related Government Programs
- Next Generation Air Transportation System (NextGen)
- FAA Air Traffic Control Modernization Programs
- Federal Aviation Administration IT Infrastructure Contracts
- Air Traffic Management Systems Development
Risk Flags
- Potential for cost overruns due to CPAF structure.
- Risk of technological obsolescence over the contract's long duration.
- Dependency on a single contractor for critical infrastructure.
- Cybersecurity vulnerabilities in flight data management systems.
Tags
it, department-of-transportation, federal-aviation-administration, definitive-contract, large-contract, full-and-open-competition, cost-plus-award-fee, computer-systems-design-services, district-of-columbia, aviation-it, air-traffic-management
Frequently Asked Questions
What is this federal contract paying for?
Department of Transportation awarded $548.5 million to LEIDOS, INC.. TERMINAL FLIGHT DATA MANAGER 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 Transportation (Federal Aviation Administration).
What is the total obligated amount?
The obligated amount is $548.5 million.
What is the period of performance?
Start: 2016-06-28. End: 2028-06-29.
What is Leidos' track record with similar large-scale federal IT modernization contracts, particularly within the aviation sector?
Leidos, Inc. has a significant track record in providing complex IT solutions and systems integration services to various federal agencies, including the Department of Defense and NASA. Within the aviation sector, they have been involved in projects related to air traffic management and aviation systems. For instance, they have supported other FAA initiatives and contracts requiring similar technical expertise in data management, software development, and system integration. Their experience with large, mission-critical systems suggests a capability to handle the demands of the Terminal Flight Data Manager contract. However, a detailed review of past performance on comparable contracts, including any past performance issues or successes, would be necessary for a comprehensive assessment.
How does the awarded amount compare to the estimated cost or budget for the Terminal Flight Data Manager system?
The provided data shows the awarded amount ($548.5 million) but does not include the initial estimated cost or budget for the Terminal Flight Data Manager (TFDM) system. Without this information, it is difficult to definitively assess whether the awarded amount represents a cost-saving or an over-budget scenario. Typically, the awarded amount reflects the government's negotiation with the winning bidder based on proposals submitted during the competition. If the awarded amount is significantly higher than initial estimates, it could indicate scope changes, increased market costs, or less competitive bidding than anticipated. Conversely, if it's lower, it might suggest successful cost management during the procurement process.
What are the primary performance risks associated with the Terminal Flight Data Manager system, and how are they being mitigated?
The primary performance risks associated with the Terminal Flight Data Manager (TFDM) system include the critical nature of flight data accuracy and availability, the complexity of integrating new systems with existing air traffic control infrastructure, potential cybersecurity threats, and the long-term sustainment and modernization of the system. Mitigation strategies are likely embedded within the contract's performance work statement and the Cost Plus Award Fee (CPAF) structure. The CPAF incentivizes Leidos to meet or exceed performance standards, with award fees tied to achieving specific metrics related to system reliability, data integrity, and operational effectiveness. Robust testing, cybersecurity protocols, and phased implementation plans are also crucial mitigation tactics.
What is the historical spending pattern for similar air traffic management IT systems by the FAA?
Historical spending by the FAA on air traffic management IT systems, particularly those related to modernization efforts like NextGen, has been substantial over the past decade. While specific figures for the TFDM predecessor or comparable systems are not in this dataset, the FAA has consistently allocated billions of dollars towards upgrading its air traffic control infrastructure. This includes investments in surveillance, communication, navigation, and data management systems. Spending patterns often reflect multi-year, phased procurements for complex technological overhauls. The $548.5 million awarded to Leidos for TFDM is consistent with the scale of investment seen in other major NextGen components, reflecting the ongoing commitment to enhancing the National Airspace System's efficiency and safety.
How does the 'Cost Plus Award Fee' contract type influence contractor behavior and government oversight for this project?
The Cost Plus Award Fee (CPAF) contract type is designed to provide flexibility in cost reimbursement while incentivizing contractor performance. Under CPAF, the contractor is reimbursed for all allowable costs incurred, plus a fixed fee that is potentially adjustable based on performance against pre-defined criteria. This structure encourages the contractor, Leidos, Inc., to not only control costs but also to strive for exceptional performance to earn the maximum award fee. For the government (FAA), this necessitates robust oversight to ensure that costs are reasonable and allowable, and that performance metrics are objectively measured and fairly evaluated. The FAA must establish clear, measurable performance standards and diligently monitor progress to determine the appropriate award fee, balancing cost control with the achievement of critical program objectives.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: PURCHASE OF STRUCTURES/FACILITIES › PURCHASE BUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 3
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 9737 WASHINGTONIAN BLVD, GAITHERSBURG, MD, 20878
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $626,235,769
Exercised Options: $549,216,062
Current Obligation: $548,465,252
Actual Outlays: $244,526,243
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2016-06-28
Current End Date: 2028-06-29
Potential End Date: 2028-06-29 00:00:00
Last Modified: 2026-04-14
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