Leidos awarded $95.6M for Air Force IT services, extending existing contract for facilities management
Contract Overview
Contract Amount: $95,566,088 ($95.6M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2025-09-01
End Date: 2026-08-31
Contract Duration: 364 days
Daily Burn Rate: $262.5K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS AWARD FEE
Sector: IT
Official Description: AFNCR-ITS SERVICES - FOLLOW ON
Place of Performance
Location: JB ANDREWS, PRINCE GEORGES County, MARYLAND, 20762
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $95.6 million to LEIDOS, INC. for work described as: AFNCR-ITS SERVICES - FOLLOW ON Key points: 1. Contract value represents a significant investment in maintaining critical IT infrastructure. 2. Full and open competition suggests a potentially competitive bidding process. 3. The contract's duration of 364 days indicates a focus on ongoing operational support. 4. Award type as a delivery order suggests it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 5. The Cost Plus Award Fee (CPAF) pricing structure incentivizes performance but requires careful oversight. 6. Focus on Computer Facilities Management Services highlights the importance of reliable IT operations.
Value Assessment
Rating: good
The contract value of $95.6 million over one year for IT facilities management services appears reasonable given the scope of supporting complex Department of Defense infrastructure. Benchmarking against similar large-scale IT service contracts within the federal government suggests this pricing is within expected ranges. The CPAF structure allows for performance-based adjustments, which can drive value if managed effectively, but also necessitates robust monitoring to ensure costs remain justified by outcomes.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. While the specific number of bidders is not provided, this method generally fosters a competitive environment, which can lead to better pricing and service offerings for the government. The agency's decision to use full and open competition suggests confidence in the market's ability to provide qualified vendors for these critical IT facilities management services.
Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it increases the likelihood of obtaining competitive pricing and innovative solutions, maximizing the value of federal dollars spent.
Public Impact
The Department of the Air Force benefits from continued reliable IT facilities management, ensuring operational readiness. Military personnel and civilian staff will have access to stable and functional IT systems. The contract supports IT infrastructure in Maryland, potentially impacting local technology sector employment. Ensures the continuity of essential digital services for national defense operations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns under the Cost Plus Award Fee structure if performance metrics are not rigorously defined and monitored.
- Dependence on a single large contractor (Leidos) could limit future flexibility or innovation if not managed proactively.
- The specific details of the award fee criteria are not publicly available, making it difficult to assess the full incentive structure.
Positive Signals
- Awarded under full and open competition, suggesting a robust market response and potential for competitive pricing.
- The contract is a delivery order, implying it is part of a potentially larger, pre-competed IDIQ vehicle, which can streamline acquisition.
- The focus on Computer Facilities Management Services indicates a commitment to maintaining essential IT infrastructure.
Sector Analysis
This contract falls within the Information Technology (IT) services sector, specifically focusing on computer facilities management. This sector is a critical component of government operations, encompassing the maintenance, operation, and support of data centers, networks, and related infrastructure. The federal IT services market is substantial, with agencies consistently investing in maintaining and modernizing their technological capabilities to support mission objectives. Comparable spending benchmarks for large-scale IT operations and maintenance contracts within the Department of Defense often run into hundreds of millions of dollars annually.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by the 'sb': false flag. Furthermore, the 'ss': false flag suggests it is not a small business prime award. This implies that the primary contract was awarded to a large business (Leidos, Inc.). While there are no direct set-aside benefits for small businesses on this specific award, large prime contractors are often required to meet small business subcontracting goals. The extent to which Leidos will utilize small businesses for subcontracting will determine the indirect impact on the small business ecosystem.
Oversight & Accountability
Oversight for this Cost Plus Award Fee contract will likely be managed by the Department of the Air Force contracting and program management offices. Performance will be monitored against defined objectives and award fee criteria. Transparency is facilitated through contract award announcements and reporting mechanisms like the Federal Procurement Data System (FPDS). Inspector General jurisdiction may apply in cases of fraud, waste, or abuse, ensuring accountability for federal funds.
Related Government Programs
- Department of Defense IT Services
- Air Force IT Modernization Programs
- Computer Facilities Management Contracts
- Cost Plus Award Fee Contracts
- IT Infrastructure Support Services
Risk Flags
- Potential for cost creep under CPAF
- Limited visibility into award fee criteria
- Dependence on a single large prime contractor
Tags
it-services, computer-facilities-management, department-of-defense, department-of-the-air-force, leidos-inc, cost-plus-award-fee, full-and-open-competition, delivery-order, maryland, large-business, it-infrastructure, ongoing-operations
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $95.6 million to LEIDOS, INC.. AFNCR-ITS SERVICES - FOLLOW ON
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 $95.6 million.
What is the period of performance?
Start: 2025-09-01. End: 2026-08-31.
What is the historical spending pattern for computer facilities management services by the Department of the Air Force?
The Department of the Air Force consistently allocates significant funding towards computer facilities management services to ensure the operational readiness and security of its IT infrastructure. Historical data indicates a steady demand for these services, often awarded through large, multi-year contracts to major IT service providers. Spending in this category can fluctuate based on modernization initiatives, cybersecurity requirements, and the consolidation or expansion of data center operations. Analyzing past awards reveals a trend towards consolidating services under fewer, larger contracts to achieve economies of scale and streamline management, though this also raises concerns about vendor lock-in and reduced competition over time. The specific amount spent annually can range from hundreds of millions to over a billion dollars, depending on the scope of services required and the prevailing technological landscape.
How does the Cost Plus Award Fee (CPAF) structure compare to other contract types for IT services?
The Cost Plus Award Fee (CPAF) contract type is a hybrid that offers flexibility for both the government and the contractor. Unlike fixed-price contracts, CPAF allows the government to reimburse the contractor for allowable costs incurred, plus a fee that is composed of a base fee (often a small percentage of estimated costs) and an award fee. The award fee is determined by the government based on the contractor's performance against pre-defined criteria, incentivizing high performance. This contrasts with Cost Plus Fixed Fee (CPFF), where the fee is fixed regardless of performance, or Firm Fixed Price (FFP), where the price is set and the contractor assumes most of the risk. For IT services, CPAF is often used when the scope of work is not fully defined or when performance quality is paramount and difficult to quantify upfront. However, CPAF requires robust government oversight to ensure costs are reasonable and the award fee is justified, making it more management-intensive than FFP.
What are the potential risks associated with a single large contractor providing IT facilities management?
Relying on a single large contractor for critical IT facilities management presents several potential risks. Firstly, there's a risk of vendor lock-in, where the government becomes heavily dependent on the contractor's proprietary systems, processes, or personnel, making it difficult and costly to switch providers in the future. This dependence can reduce bargaining power and limit the government's ability to adopt new technologies or approaches. Secondly, a lack of competition can lead to complacency, potentially resulting in decreased service quality or innovation over time. Thirdly, the contractor might face financial instability or undergo mergers and acquisitions, which could disrupt service delivery or lead to changes in contract terms. Finally, a single point of failure, whether technical or organizational, within the contractor's operations could have widespread impacts on the government's IT infrastructure.
What is Leidos, Inc.'s track record with the Department of Defense for IT services?
Leidos, Inc. has a substantial and long-standing track record of providing a wide range of IT and technical services to the Department of Defense (DoD) and its various branches, including the Air Force. The company has been involved in numerous large-scale contracts encompassing areas such as enterprise IT, cybersecurity, cloud computing, data analytics, and systems integration. Their experience includes supporting complex command and control systems, logistics, and mission-critical applications. Leidos has consistently secured significant contract awards from the DoD, reflecting their perceived capabilities and past performance. While specific performance details for individual contracts are often proprietary, their continued success in winning competitive bids and receiving follow-on awards suggests a generally positive relationship and a demonstrated ability to meet the DoD's demanding requirements.
How does the geographic location (Maryland) influence the IT services market for this contract?
Maryland is a significant hub for federal government contracting, particularly in the IT and defense sectors, due to its proximity to Washington D.C. and numerous federal agencies. This concentration of government activity creates a robust market for IT services, with a large pool of skilled professionals and established contracting companies. For this specific contract, being located in Maryland likely means Leidos has access to a readily available workforce experienced in government IT operations. It also suggests a competitive landscape where multiple firms may be vying for similar contracts, potentially driving innovation and efficiency. The presence of major federal installations in the region further solidifies Maryland's role as a key area for IT service delivery to the government, influencing talent acquisition, operational costs, and the overall competitive dynamics of contracts like this one.
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: 1750 PRESIDENTS ST FL 10, 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: $125,644,794
Exercised Options: $125,644,794
Current Obligation: $95,566,088
Subaward Activity
Number of Subawards: 12
Total Subaward Amount: $2,081,540
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA701424D0007
IDV Type: IDC
Timeline
Start Date: 2025-09-01
Current End Date: 2026-08-31
Potential End Date: 2026-08-31 00:00:00
Last Modified: 2026-02-13
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