DoD's $61.7M RTD2 contract to Leidos, Inc. for R&D in physical sciences shows strong competition
Contract Overview
Contract Amount: $61,682,507 ($61.7M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2019-07-03
End Date: 2026-07-03
Contract Duration: 2,557 days
Daily Burn Rate: $24.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: RAPID TECHNOLOGY DEVELOPMENT AND DEMONSTRATIONS (RTD2)
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $61.7 million to LEIDOS, INC. for work described as: RAPID TECHNOLOGY DEVELOPMENT AND DEMONSTRATIONS (RTD2) Key points: 1. Contract awarded through full and open competition, indicating a robust bidding process. 2. Leidos, Inc. has a significant presence in government contracting, suggesting established capabilities. 3. The contract's duration of over 7 years points to a long-term R&D investment. 4. Focus on physical, engineering, and life sciences R&D aligns with critical defense modernization needs. 5. The cost-plus-fixed-fee structure incentivizes cost control while allowing for flexibility in research. 6. Virginia is a key hub for defense contracting and R&D activities.
Value Assessment
Rating: good
The contract's value of $61.7 million over approximately seven years for R&D in physical sciences appears reasonable given the scope. While specific cost breakdowns are not provided, the cost-plus-fixed-fee (CPFF) structure suggests that costs are reimbursed, plus a fixed fee for profit. Benchmarking against similar large-scale R&D contracts in the defense sector would provide a clearer picture of value for money, but the competitive award process is a positive indicator.
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. The presence of two bidders (as indicated by 'no': 2) suggests a moderate level of competition for this specific award. While more bidders could potentially drive prices lower, full and open competition generally ensures a fair process and access to a wide range of capabilities.
Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages multiple companies to offer their best pricing and technical solutions, potentially leading to more cost-effective outcomes for the government.
Public Impact
The Department of the Air Force benefits from advanced research and development in physical, engineering, and life sciences. This contract supports the development of new technologies and demonstrations crucial for national defense. The geographic impact is centered in Virginia, a state with a strong defense industry presence. Workforce implications include potential job creation for scientists, engineers, and technical staff in the R&D sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- The cost-plus-fixed-fee (CPFF) contract type can lead to cost overruns if not managed diligently, as the contractor is reimbursed for all allowable costs.
- The long contract duration (over 7 years) increases the risk of scope creep or evolving technological requirements not being fully captured in the initial award.
- Reliance on a single prime contractor, Leidos, Inc., for such a significant R&D effort could pose risks if their performance falters or if key personnel depart.
Positive Signals
- Awarded through full and open competition, suggesting a competitive process that likely yielded a fair price.
- Leidos, Inc. is a large, established government contractor with a proven track record in complex R&D and technology integration.
- The contract's focus on 'RAPID TECHNOLOGY DEVELOPMENT AND DEMONSTRATIONS (RTD2)' indicates a commitment to acquiring cutting-edge capabilities.
- The definitive contract award type provides a stable framework for long-term research and development efforts.
Sector Analysis
The contract falls within the Research and Development in the Physical, Engineering, and Life Sciences sector, specifically NAICS code 541715. This is a critical area for defense modernization, encompassing advancements in materials science, advanced manufacturing, artificial intelligence, and other foundational technologies. The market for defense R&D is substantial, with significant government investment aimed at maintaining a technological edge. Comparable spending benchmarks would typically involve looking at other large, multi-year R&D contracts awarded by the Department of Defense or other federal agencies for similar scientific domains.
Small Business Impact
This contract does not appear to have specific small business set-aside provisions (ss: false, sb: false). As a large contract awarded to a major prime contractor, there may be opportunities for small businesses to participate as subcontractors. However, the extent of small business subcontracting is not detailed in the provided data. Analysis would be needed to determine if the prime contractor has robust subcontracting plans that benefit the small business ecosystem.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. The cost-plus-fixed-fee structure necessitates close monitoring of expenditures to ensure costs are allowable and reasonable. Transparency is generally maintained through contract reporting mechanisms. Inspector General (IG) jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.
Related Government Programs
- Department of Defense Research, Development, Test, and Evaluation (RDT&E)
- Advanced Technology Development Programs
- Science and Technology Reinvention Laboratories (STRLs)
- Small Business Innovation Research (SBIR) Program
- Defense Advanced Research Projects Agency (DARPA) Contracts
Risk Flags
- Cost Overrun Risk (CPFF)
- Long-Term Contract Management
- Technological Obsolescence
- Dependence on Single Prime Contractor
Tags
department-of-defense, air-force, research-and-development, physical-sciences, engineering, life-sciences, definitive-contract, cost-plus-fixed-fee, full-and-open-competition, leidos-inc, virginia, technology-development
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $61.7 million to LEIDOS, INC.. RAPID TECHNOLOGY DEVELOPMENT AND DEMONSTRATIONS (RTD2)
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 $61.7 million.
What is the period of performance?
Start: 2019-07-03. End: 2026-07-03.
What is Leidos, Inc.'s track record with similar large-scale R&D contracts for the Department of Defense?
Leidos, Inc. is a major government contractor with extensive experience in research, development, and systems integration across various defense and intelligence agencies. They have a history of managing large, complex contracts, including those involving advanced technology development and demonstrations. While specific details on past R&D contract performance metrics are not provided here, their sustained presence and significant contract awards suggest a generally positive track record. Further analysis would involve reviewing past performance evaluations, contract modifications, and any reported issues on similar programs to fully assess their capabilities and reliability in executing this specific RTD2 contract.
How does the $61.7 million value compare to other R&D contracts in physical sciences awarded by the Air Force?
The $61.7 million value for this seven-year R&D contract is substantial but falls within the typical range for large-scale, multi-year research initiatives within the Department of the Air Force. The Air Force, like other branches of the DoD, invests billions annually in RDT&E. Contracts for advanced technology development, particularly those involving complex physical sciences and engineering, often span multiple years and reach tens to hundreds of millions of dollars. Without access to a comprehensive database of all Air Force R&D contract awards, a precise benchmark is difficult. However, considering the duration and the nature of 'Rapid Technology Development and Demonstrations,' this award appears to be a significant, but not outlier, investment in critical capabilities.
What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this R&D effort?
The primary risk with a CPFF contract type for R&D is the potential for cost overruns. While the contractor is reimbursed for all allowable costs incurred, the 'fixed fee' component means their profit margin is predetermined. This can incentivize contractors to manage costs efficiently, but it also means the government bears the risk of cost increases beyond initial estimates. For R&D, where the scope and technical challenges can be unpredictable, this risk is heightened. Effective oversight, rigorous cost tracking, and clear definition of allowable costs are crucial to mitigate these risks and ensure the government receives value for its investment. Unforeseen technical hurdles or scope changes could significantly increase the total cost to the government.
How effective is 'full and open competition' in ensuring value for money in R&D contracts of this nature?
Full and open competition is generally considered the most effective method for ensuring value for money in government contracting, including R&D. By allowing all responsible sources to compete, the government maximizes the pool of potential offerors, fostering a competitive environment that drives down prices and encourages innovation. For R&D, this means potentially accessing a wider range of novel approaches and technologies. However, the effectiveness is contingent on the clarity of the solicitation, the evaluation criteria, and the number of qualified bidders. In this case, with two bidders, the competition was present but perhaps not as intense as it could be with more participants. Nevertheless, the principle of open competition remains a strong foundation for achieving value.
What are the historical spending patterns for R&D in physical sciences by the Department of the Air Force?
The Department of the Air Force consistently allocates significant portions of its budget to Research, Development, Test, and Evaluation (RDT&E), with a substantial focus on physical, engineering, and life sciences. Historical spending patterns show a trend of increasing investment in areas critical for maintaining technological superiority, such as advanced materials, cyber capabilities, aerospace technologies, and directed energy. Funding often fluctuates based on strategic priorities, emerging threats, and technological breakthroughs. The RTD2 program, under which this contract was awarded, represents a mechanism for rapidly acquiring and demonstrating these advanced capabilities. Analyzing multi-year budget requests and appropriations data for the Air Force's RDT&E accounts would reveal specific trends and priorities within the physical sciences domain.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: BASIC RESEARCH
Solicitation ID: FA865019S1110
Offers Received: 2
Pricing Type: COST PLUS FIXED FEE (U)
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: $66,752,500
Exercised Options: $66,752,500
Current Obligation: $61,682,507
Actual Outlays: $772,270
Subaward Activity
Number of Subawards: 121
Total Subaward Amount: $21,107,527
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2019-07-03
Current End Date: 2026-07-03
Potential End Date: 2026-07-03 00:00:00
Last Modified: 2025-08-22
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