Leidos Inc. awarded $23.1M for Air Force NDC Operations and Maintenance, a sole-source contract
Contract Overview
Contract Amount: $23,128,977 ($23.1M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2015-07-01
End Date: 2019-10-31
Contract Duration: 1,583 days
Daily Burn Rate: $14.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: IGF::OT::IGF US NDC OPERATIONS AND MAINTENANCE
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $23.1 million to LEIDOS, INC. for work described as: IGF::OT::IGF US NDC OPERATIONS AND MAINTENANCE Key points: 1. Contract awarded on a sole-source basis, raising questions about price competitiveness. 2. Significant duration of over 4 years suggests a long-term need for these services. 3. The contract type is Firm Fixed Price, which can offer cost certainty but may limit flexibility. 4. The North American Industry Classification System (NAICS) code 541511 points to custom computer programming services. 5. The contract was awarded by the Department of the Air Force, indicating a defense-related IT requirement. 6. The contractor, Leidos, Inc., has a substantial presence in the federal contracting space.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging due to its sole-source nature and specific service requirements. Without competitive bids, it's difficult to ascertain if the $23.1 million price represents optimal value for the custom computer programming and maintenance services provided. The firm fixed-price structure suggests an attempt to control costs, but the lack of competition limits the ability to compare pricing against market rates or similar government contracts. Further analysis would require access to detailed cost breakdowns and performance metrics.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, or in situations where urgency or specific requirements preclude a competitive process. The absence of competition means there were no other bidders, and therefore, no direct price discovery through a bidding war. This can sometimes lead to higher prices than would be achieved in a competitive environment.
Taxpayer Impact: For taxpayers, a sole-source award means there is a reduced likelihood of achieving the lowest possible price for the services rendered. The government relies on negotiation and oversight to ensure fair pricing, which may not be as robust as the price pressures generated by open competition.
Public Impact
The primary beneficiary is the Department of the Air Force, which receives essential IT operations and maintenance services. The services delivered likely ensure the continuity and functionality of critical Air Force IT systems. The geographic impact is primarily within the operational areas of the Department of the Air Force, potentially worldwide. Workforce implications may include the direct employment of IT professionals by Leidos, Inc. to fulfill the contract requirements.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition and potential taxpayer savings.
- Lack of transparency in the justification for sole-source procurement.
- Contract duration of over 4 years may indicate a lack of agile procurement strategies.
- Firm Fixed Price contract might not be optimal for rapidly evolving IT services.
Positive Signals
- Contract awarded to a known entity (Leidos, Inc.) with established federal contracting experience.
- Firm Fixed Price contract provides cost certainty for the government.
- Contract addresses a specific operational need for the Department of the Air Force.
Sector Analysis
This contract falls within the Information Technology (IT) sector, specifically custom computer programming services and IT operations and maintenance. The federal IT market is vast, with significant annual spending on software development, system integration, and ongoing support. Contracts like this are crucial for maintaining the complex digital infrastructure that supports government operations. Benchmarking against similar IT services contracts for defense agencies can provide context, but the sole-source nature here makes direct comparisons difficult.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The prime contractor, Leidos, Inc., is a large business. There is no explicit information provided regarding subcontracting plans for small businesses. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem is unclear, though large prime contracts often involve some level of subcontracting.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. The Inspector General (IG) for the Department of Defense would have jurisdiction for audits and investigations. Transparency is limited by the sole-source nature of the award; however, contract modifications, performance reports, and payment data are generally subject to oversight and reporting requirements.
Related Government Programs
- Defense Information Systems Agency (DISA) IT Services
- Air Force Network Operations
- Custom Software Development Contracts
- IT Operations and Maintenance Services
Risk Flags
- Sole-source award
- Lack of competition
- Potential for overpricing
- Limited transparency on justification
Tags
it, defense, department-of-defense, department-of-the-air-force, custom-computer-programming-services, operations-and-maintenance, definitive-contract, firm-fixed-price, sole-source, large-business, leidos-inc, virginia
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $23.1 million to LEIDOS, INC.. IGF::OT::IGF US NDC OPERATIONS AND MAINTENANCE
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 $23.1 million.
What is the period of performance?
Start: 2015-07-01. End: 2019-10-31.
What was the specific justification for awarding this contract on a sole-source basis?
The provided data indicates the contract was awarded as 'NOT COMPETED' and is a 'SOLE SOURCE' type. Typically, sole-source justifications are based on factors such as unique capabilities of the contractor, urgent and compelling needs where competition is not feasible, or when only one responsible source exists. For this specific contract, the detailed justification would likely be found in a Justification and Approval (J&A) document filed with the Federal Business Opportunities (now SAM.gov) prior to award. Without access to that document, the precise reasons remain unknown, but common rationales include proprietary technology, specialized expertise, or continuity of essential services where switching contractors would be detrimental.
How does the $23.1 million total contract value compare to similar IT operations and maintenance contracts within the Department of the Air Force?
Direct comparison of the $23.1 million value is difficult without knowing the specific scope and duration of services. However, the contract ran for approximately 4 years (July 2015 to October 2019), equating to an average annual value of roughly $5.78 million. The Department of the Air Force procures a wide range of IT services, from large enterprise-wide solutions to niche support. Larger, more comprehensive IT operations and maintenance contracts can easily reach tens or hundreds of millions of dollars annually. This contract's value suggests it covered a specific set of systems or a particular operational function rather than a broad, enterprise-level IT support agreement. Benchmarking would require identifying contracts with similar NAICS codes (541511) and service descriptions within the Air Force.
What are the potential risks associated with a sole-source contract of this magnitude and duration?
The primary risk associated with a sole-source contract is the lack of competitive pressure, which can lead to inflated pricing and reduced innovation. Taxpayers may not be receiving the best possible value for their money. Another risk is vendor lock-in, where the government becomes overly reliant on a single provider, making it difficult and costly to transition to a different vendor in the future. Furthermore, without the scrutiny of a competitive bidding process, there's a potential for less rigorous performance standards or a reduced incentive for the contractor to proactively improve services. The long duration (over 4 years) exacerbates these risks by extending the period of non-competition.
What is Leidos, Inc.'s track record with the Department of Defense and specifically the Air Force?
Leidos, Inc. is a major government contractor with a significant and long-standing presence across various U.S. federal agencies, including the Department of Defense (DoD) and the Department of the Air Force. They have a history of performing large-scale IT services, systems integration, logistics, and technical support contracts. Their portfolio includes work on command and control systems, cybersecurity, enterprise IT infrastructure, and data analytics. Given their size and expertise, Leidos is frequently a prime contractor on complex defense programs. Awards to Leidos by the Air Force are common and span a wide array of services, reflecting their established capabilities and past performance within the service.
How does the Firm Fixed Price (FFP) contract type influence the risk and cost for this specific service?
A Firm Fixed Price (FFP) contract type means the price is set and not subject to adjustment based on the contractor's cost experience in performing the work. For the government, this offers cost certainty, as the total expenditure is known upfront, assuming the scope of work doesn't change. The risk of cost overruns lies primarily with the contractor. However, for complex IT services like custom programming and maintenance, where requirements can evolve or unforeseen technical challenges arise, an FFP contract might incentivize the contractor to cut corners on quality or scope to protect their profit margin. Conversely, it can also drive efficiency if the contractor finds ways to perform the work at a lower cost than anticipated. The suitability of FFP depends heavily on how well-defined the requirements were at the time of award.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services
Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: FA702215R0003
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc. (UEI: 611641312)
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: $26,683,344
Exercised Options: $23,132,177
Current Obligation: $23,128,977
Subaward Activity
Number of Subawards: 2
Total Subaward Amount: $561,001
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2015-07-01
Current End Date: 2019-10-31
Potential End Date: 2019-10-31 00:00:00
Last Modified: 2019-09-09
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