Leidos, Inc. awarded $33M for Engineering Services by the Department of Defense, with a 5-year duration
Contract Overview
Contract Amount: $32,978,640 ($33.0M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2019-07-01
End Date: 2024-08-02
Contract Duration: 1,859 days
Daily Burn Rate: $17.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: OPERATIONAL ENERGY
Place of Performance
Location: JB ANDREWS, PRINCE GEORGES County, MARYLAND, 20762
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $33.0 million to LEIDOS, INC. for work described as: OPERATIONAL ENERGY Key points: 1. Contract value of $33 million over 5 years suggests a significant but potentially moderate annual spend. 2. The contract is for Engineering Services, a broad category that requires understanding specific deliverables for true value assessment. 3. Awarded to a single contractor, Leidos, Inc., indicating a focus on specialized capabilities or a specific project phase. 4. The contract duration of 1859 days (approx. 5 years) allows for long-term project planning and execution. 5. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 6. The presence of two bids suggests some level of competition, but further analysis is needed to determine if it was robust.
Value Assessment
Rating: fair
The contract value of $33 million over approximately five years averages to about $6.6 million annually. Without specific details on the engineering services provided, it's difficult to benchmark against similar contracts. However, the Firm Fixed Price structure is generally favorable for the government, as it caps costs. The number of bids (2) is on the lower side for a contract of this value, which could indicate less competitive pricing than ideal.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. However, only two bids were received. While full and open competition is the preferred method, a low number of bidders can sometimes indicate barriers to entry, lack of market awareness, or limited availability of qualified contractors for the specific services required. This could potentially limit price discovery.
Taxpayer Impact: A low number of bidders, even under full and open competition, may mean taxpayers did not benefit from the most competitive pricing achievable if more firms were capable of bidding but chose not to.
Public Impact
The Department of Defense benefits from specialized engineering services crucial for its operations. The contract supports national defense objectives by ensuring the availability of engineering expertise. The geographic impact is likely concentrated around the operational areas of the Department of the Air Force, with potential for broader national security implications. The contract supports a workforce skilled in engineering and related technical fields.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition (2 bids) may have resulted in a higher price than if more vendors had participated.
- The broad nature of 'Engineering Services' requires further scrutiny to ensure the specific services procured align with needs and represent good value.
- Lack of small business set-aside could mean fewer opportunities for smaller, specialized engineering firms to participate directly.
Positive Signals
- Firm Fixed Price contract type transfers cost overrun risk to the contractor.
- Awarded under full and open competition, adhering to best practices for government procurement.
- The contract duration allows for sustained support and project continuity.
Sector Analysis
Engineering services are a critical component of the defense sector, encompassing a wide range of activities from design and development to testing and maintenance. The market for these services is substantial, driven by government and private sector demand for specialized technical expertise. This contract fits within the broader category of professional services supporting defense readiness and technological advancement. Comparable spending benchmarks would require detailed service descriptions but generally fall within the professional services procurement landscape.
Small Business Impact
This contract does not appear to have a small business set-aside. While awarded under full and open competition, the absence of specific small business considerations means that opportunities for small businesses to participate as prime contractors are limited. Subcontracting opportunities may exist, but their extent and availability would depend on Leidos, Inc.'s subcontracting plan and the specific nature of the engineering services required.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Accountability measures are inherent in the Firm Fixed Price contract type, requiring the contractor to deliver specified services within the agreed-upon price. Transparency is generally maintained through contract award databases and reporting requirements, though specific performance details may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Defense Engineering Services
- Professional Services Contracts
- Department of the Air Force Contracts
- Leidos, Inc. Contracts
Risk Flags
- Limited Competition
- Potential for Cost Overruns (inherent risk in FFP if not managed)
- Scope Definition Clarity
Tags
defense, department-of-defense, department-of-the-air-force, engineering-services, leidos-inc, firm-fixed-price, full-and-open-competition, professional-services, federal-contract, maryland, operational-energy
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $33.0 million to LEIDOS, INC.. OPERATIONAL ENERGY
Who is the contractor on this award?
The obligated recipient is LEIDOS, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $33.0 million.
What is the period of performance?
Start: 2019-07-01. End: 2024-08-02.
What specific engineering services are being procured under this contract, and how do they align with the Department of the Air Force's mission requirements?
The provided data indicates the contract is for 'Engineering Services' (NAICS code 541330) awarded to Leidos, Inc. by the Department of the Air Force. However, the specific nature of these services is not detailed. Engineering services in the defense context can range widely, from aerospace design and systems integration to logistical support analysis and cybersecurity engineering. To assess alignment with mission requirements, one would need to examine the Statement of Work (SOW) or Performance Work Statement (PWS) associated with this contract. This document would detail the tasks, deliverables, and performance standards expected. Without the SOW/PWS, it's impossible to definitively state how these services directly support the Air Force's operational or strategic objectives.
How does the awarded price of approximately $33 million over five years compare to market rates for similar engineering services provided to the Department of Defense?
Benchmarking the $33 million contract value requires a detailed understanding of the specific engineering services rendered. The average annual value is approximately $6.6 million. For comparison, one would look at other Department of Defense (DoD) contracts for similar engineering disciplines (e.g., aerospace, systems, mechanical engineering) awarded around the same period, with comparable durations and scopes. Factors like the contractor's overhead, profit margins, labor rates, and the complexity of the required services heavily influence pricing. Given that only two bids were received, it's possible that the pricing, while fixed, might not reflect the most aggressive market competition. A thorough analysis would involve comparing labor hours, skill mixes, and overhead structures if such data were publicly available or obtainable through Freedom of Information Act (FOIA) requests.
What is Leidos, Inc.'s track record with the Department of Defense, particularly in providing engineering services?
Leidos, Inc. is a major government contractor with a significant history of serving the Department of Defense (DoD) across various sectors, including defense, intelligence, and federal civilian agencies. Their portfolio often includes complex engineering, IT, and systems integration services. To assess their track record specifically for this type of engineering service, one would review their past performance on similar DoD contracts. This includes examining contract performance evaluations (e.g., CPARS reports, if available), any past performance issues or commendations, and their experience with Firm Fixed Price contracts. Leidos generally has a strong reputation, but specific performance on contracts analogous to this one would provide the most relevant context for assessing their capability and reliability in delivering the required engineering solutions.
What are the potential risks associated with a Firm Fixed Price contract for complex engineering services, and how are they mitigated?
The primary risk of a Firm Fixed Price (FFP) contract for complex engineering services is that the contractor may cut corners on quality or scope to maintain profitability if costs exceed initial estimates. This can lead to subpar deliverables or unmet performance standards. Mitigation strategies employed by the government include a well-defined Statement of Work (SOW) with clear technical requirements and performance metrics, robust government oversight and quality assurance, and potentially performance-based payment schedules tied to milestones. For Leidos, Inc., the risk is that unforeseen technical challenges or scope creep not formally addressed could erode their profit margin. The government's mitigation relies on precise contract language and diligent program management to ensure the contractor meets all obligations.
Given the 'full and open competition' designation but only two bids, what does this suggest about the market for these specific engineering services?
The designation of 'full and open competition' signifies that the solicitation was broadly advertised, allowing any qualified entity to bid. However, receiving only two bids suggests potential limitations within the market for these specific engineering services. This could be due to several factors: a highly specialized niche requiring few qualified providers, high barriers to entry (e.g., security clearances, specific certifications, past performance requirements), insufficient market research by the agency to identify all potential bidders, or perhaps the contract's value or scope not being attractive enough to draw more interest. For taxpayers, this limited competition might mean less downward pressure on pricing than would occur in a more crowded marketplace, potentially leading to a higher cost for the services.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1750 PRESIDENTS ST FL 4, 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: $44,649,212
Exercised Options: $32,981,552
Current Obligation: $32,978,640
Actual Outlays: $14,538,388
Subaward Activity
Number of Subawards: 4
Total Subaward Amount: $202,830
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: GS00Q14OADU122
IDV Type: IDC
Timeline
Start Date: 2019-07-01
Current End Date: 2024-08-02
Potential End Date: 2024-08-02 00:00:00
Last Modified: 2025-04-26
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