Leidos awarded $45.2M for Air Force IT services, with a 3-year duration
Contract Overview
Contract Amount: $45,232,118 ($45.2M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2022-08-15
End Date: 2025-08-14
Contract Duration: 1,095 days
Daily Burn Rate: $41.3K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS AWARD FEE
Sector: IT
Official Description: PKA:HYSKA:SYDNEY:TO22 CCR: AFNCR ITS CONTRACT
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $45.2 million to LEIDOS, INC. for work described as: PKA:HYSKA:SYDNEY:TO22 CCR: AFNCR ITS CONTRACT Key points: 1. Contract value of $45.2M over three years suggests a significant investment in IT infrastructure. 2. Full and open competition indicates a broad market search for qualified vendors. 3. The contract type (Cost Plus Award Fee) incentivizes performance but requires careful oversight. 4. IT services are critical for modern military operations, impacting readiness and efficiency. 5. The award to a large, established contractor like Leidos is common for complex IT needs. 6. Geographic focus on Virginia aligns with significant Department of Defense presence.
Value Assessment
Rating: good
The contract value of $45.2M over three years averages to approximately $15M annually for IT services. Benchmarking this against similar large-scale IT support contracts for federal agencies reveals this is within a typical range for comprehensive facilities management and IT support. The Cost Plus Award Fee structure allows for flexibility in costs while incentivizing performance, which can be a good value if performance targets are met and managed effectively. However, it necessitates robust oversight to ensure costs remain reasonable and aligned with objectives.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, suggesting that the Department of the Air Force sought proposals from all responsible sources. The number of bidders is not specified, but this procurement method generally fosters a competitive environment. A wide range of potential offerors could participate, leading to a more robust evaluation of capabilities and pricing. This approach aims to secure the best value for the government by leveraging the broadest possible market.
Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it increases the likelihood of receiving competitive pricing and high-quality services by allowing all qualified vendors to participate.
Public Impact
The Department of the Air Force benefits from enhanced IT infrastructure and management services. Military personnel and civilian staff will have access to reliable and efficient IT systems. The contract supports critical IT operations necessary for national defense and readiness. Workforce implications include potential employment opportunities within Leidos and its subcontractors in Virginia. Geographic impact is concentrated in Virginia, a hub for defense activities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Award Fee contracts can lead to cost overruns if not meticulously managed.
- Reliance on a single large contractor may limit future flexibility or innovation.
- The duration of the contract (3 years) could lock in specific technologies or approaches.
Positive Signals
- Full and open competition suggests a thorough vetting process and potential for competitive pricing.
- The award to Leidos, a known entity in government contracting, implies a level of trust in their capabilities.
- The contract's focus on IT facilities management is crucial for maintaining operational readiness.
Sector Analysis
This contract falls within the IT services sector, specifically focusing on computer facilities management. The IT services market for the federal government is substantial, with agencies heavily reliant on contractors for maintaining and upgrading complex systems. This contract represents a portion of the broader federal spending on IT infrastructure, which is essential for national security, operational efficiency, and data management. Comparable spending benchmarks for similar IT support services often range from millions to tens of millions annually, depending on the scope and complexity.
Small Business Impact
The data indicates that small business participation (sb: false) was not a specific set-aside requirement for this contract. While Leidos is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will depend on Leidos's strategy and the specific requirements outlined in the contract. Without explicit set-aside provisions, the direct impact on the small business ecosystem is likely limited unless subcontracting goals are actively pursued and met.
Oversight & Accountability
Oversight for this Cost Plus Award Fee contract will likely be managed by the Department of the Air Force contracting officers and technical representatives. Accountability measures are built into the award fee structure, which ties a portion of the contractor's profit to performance metrics. Transparency is generally maintained through contract awards databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Department of Defense IT Modernization Programs
- Air Force Cloud Computing Initiatives
- Federal Civilian IT Services Contracts
- IT Infrastructure Support Services
Risk Flags
- Cost Plus Award Fee contract type requires diligent oversight to manage costs.
- Potential for contractor lock-in due to contract duration and specific technology dependencies.
- Lack of explicit small business set-aside may limit direct opportunities for SMBs.
Tags
it-services, computer-facilities-management, department-of-defense, department-of-the-air-force, cost-plus-award-fee, full-and-open-competition, delivery-order, virginia, large-contract, it-infrastructure, national-security
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $45.2 million to LEIDOS, INC.. PKA:HYSKA:SYDNEY:TO22 CCR: AFNCR ITS CONTRACT
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 $45.2 million.
What is the period of performance?
Start: 2022-08-15. End: 2025-08-14.
What is Leidos's track record with similar IT facilities management contracts for the Department of Defense?
Leidos has a substantial track record with the Department of Defense and other federal agencies in providing IT services, including facilities management, network operations, and cybersecurity. They have held numerous large-scale contracts across various branches of the military. For instance, they have been involved in significant IT modernization efforts and sustainment programs. Their experience typically involves managing complex infrastructure, ensuring high availability, and adhering to stringent security protocols. This history suggests a strong capability to handle the requirements of the Air Force's IT facilities management needs, though specific performance metrics on past contracts would provide a more granular assessment of their reliability and efficiency.
How does the $45.2M contract value compare to historical spending on similar Air Force IT services?
The $45.2M contract value over three years, averaging approximately $15M annually, is a significant but not unprecedented figure for large-scale IT facilities management services within the Department of the Air Force. Historical spending patterns show that major IT support contracts for military branches often fall within this range, especially when encompassing comprehensive management of data centers, networks, and end-user support. Factors influencing this value include the scope of services, the number of users supported, the criticality of the systems, and the geographic locations covered. Without specific historical data for this exact service category and location, it's challenging to provide a precise comparison, but it aligns with the typical investment required for robust IT infrastructure sustainment in a large federal agency.
What are the primary risks associated with a Cost Plus Award Fee (CPAF) contract for IT services?
The primary risks associated with a CPAF contract for IT services revolve around cost control and performance measurement. For the government, there's a risk of cost overruns if the contractor's incurred costs are higher than anticipated, even if performance is satisfactory. The 'award fee' component, while intended to incentivize superior performance, can be subjective and may lead to disputes if not clearly defined and objectively measured. Contractors may focus on achieving award fee criteria rather than optimizing overall value or efficiency. For the contractor, the risk lies in not achieving the performance targets necessary to earn the full award fee, thus reducing their potential profit. Effective oversight and clearly defined performance metrics are crucial to mitigate these risks.
How effective is 'full and open competition' in ensuring value for money in large IT contracts?
Full and open competition is generally considered the most effective method for ensuring value for money in large IT contracts. By allowing all responsible sources to submit proposals, the government maximizes the pool of potential offerors, thereby increasing the likelihood of receiving competitive bids. This broad competition drives down prices and encourages innovation as contractors vie for the contract. It also provides a wider range of technical solutions and capabilities to choose from, allowing the agency to select the best fit for its needs. While the procurement process can be more time-consuming and complex than other methods, the potential for cost savings and superior performance typically outweighs these challenges, leading to better overall value for taxpayers.
What are the potential implications of this contract on IT workforce dynamics within the Air Force or its contractors?
This contract, awarded to Leidos, will likely have implications for the IT workforce, primarily through Leidos's hiring and personnel management. As a large IT services provider, Leidos will leverage its existing workforce and may need to hire additional personnel, potentially including cleared professionals, to fulfill the contract requirements. This could create job opportunities in the Virginia area, where much of the defense IT work is concentrated. For the Air Force, the reliance on a contractor for IT facilities management may mean a shift in internal workforce focus towards higher-level strategy, oversight, and requirements definition, rather than direct system maintenance. It could also influence the skill sets the Air Force seeks to retain in-house versus those outsourced.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Facilities Management Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - END USER
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Pricing Type: COST PLUS AWARD FEE (R)
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: $46,556,676
Exercised Options: $46,556,676
Current Obligation: $45,232,118
Actual Outlays: $7,397,927
Subaward Activity
Number of Subawards: 54
Total Subaward Amount: $95,267,268
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA701419DA005
IDV Type: IDC
Timeline
Start Date: 2022-08-15
Current End Date: 2025-08-14
Potential End Date: 2025-08-14 00:00:00
Last Modified: 2025-10-01
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