DoD's $162M Pre-Operational Support Contract Awarded to Leidos Raises Questions on Competition and Value
Contract Overview
Contract Amount: $162,148,868 ($162.1M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2017-08-01
End Date: 2026-04-30
Contract Duration: 3,194 days
Daily Burn Rate: $50.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: IGF::OT::IGF PRE-OPERATIONAL SUPPORT AND INTERIM CONTRACTOR SUPPORT
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $162.1 million to LEIDOS, INC. for work described as: IGF::OT::IGF PRE-OPERATIONAL SUPPORT AND INTERIM CONTRACTOR SUPPORT Key points: 1. The contract awarded to Leidos for pre-operational support lacks competitive bidding, raising concerns about potential overpricing. 2. With a significant value of $162 million, the absence of competition limits price discovery and taxpayer value. 3. The duration of the contract (over 8 years) and its cost-plus-fixed-fee structure warrant close scrutiny for cost control. 4. The sector, focused on navigation and guidance systems, is critical but the procurement method is concerning.
Value Assessment
Rating: questionable
The $162 million contract value for pre-operational support is substantial. Without competitive bidding, it's difficult to benchmark against similar contracts to ensure fair pricing. The cost-plus-fixed-fee structure necessitates robust oversight to prevent cost overruns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
This contract was not competed, indicating a limited competition approach. This significantly impacts price discovery, as there was no mechanism to solicit multiple bids and negotiate the best possible price for the government.
Taxpayer Impact: The lack of competition means taxpayers may not be receiving the best value for their money, as the price may not have been driven down by market forces.
Public Impact
Taxpayers may be overpaying for essential pre-operational support due to the absence of competitive bidding. The long contract duration could lock the government into potentially suboptimal pricing for years. Lack of transparency in the procurement process hinders public trust and accountability.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus-fixed-fee structure
- Long contract duration
- Limited transparency
Positive Signals
- Awarded to a known entity (Leidos)
- Supports critical defense systems
Sector Analysis
The Department of Defense's spending in the IT and defense systems sector is substantial. This contract, for navigation and guidance systems, falls within a critical area. Benchmarks for similar support contracts are hard to establish without competitive data.
Small Business Impact
The contract data does not indicate any specific provisions or set-asides for small businesses. The award to Leidos, a large corporation, suggests that small business participation may be minimal or non-existent in this specific procurement.
Oversight & Accountability
The 'not competed' status raises immediate oversight concerns. Robust oversight will be crucial to monitor costs, performance, and ensure the contractor is meeting all requirements within the agreed-upon fee structure.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Potential for inflated costs due to lack of competition.
- Risk of contractor inefficiency not being penalized.
- Limited transparency in the procurement process.
- Long-term commitment without demonstrated best value.
- Potential for scope creep within the CPFF structure.
Tags
search-detection-navigation-guidance-aer, department-of-defense, va, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $162.1 million to LEIDOS, INC.. IGF::OT::IGF PRE-OPERATIONAL SUPPORT AND INTERIM CONTRACTOR SUPPORT
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 $162.1 million.
What is the period of performance?
Start: 2017-08-01. End: 2026-04-30.
What specific justifications were provided for not competing this significant contract, and how do they align with federal procurement regulations?
Federal regulations allow for non-competitive awards under specific circumstances, such as when only one responsible source exists or for urgent and compelling reasons. The justification for this contract's non-competitive award needs thorough review to ensure it meets these stringent criteria and wasn't simply a matter of convenience or missed opportunity for competition.
How will the Department of Defense ensure cost control and prevent potential overruns within the Cost Plus Fixed Fee (CPFF) structure, given the lack of competitive pressure?
With a CPFF contract, robust government oversight is paramount. This includes detailed cost monitoring, regular audits, and performance reviews to ensure Leidos's expenditures are reasonable and allocable. The fixed fee provides some incentive for efficiency, but the government must actively manage the cost-reimbursement aspect to prevent unnecessary spending.
What is the projected return on investment or value proposition for the government in awarding this $162 million contract without competition?
The value proposition is difficult to ascertain without competitive benchmarks. The government is likely prioritizing speed or perceived necessity for pre-operational support. However, the lack of competition means the government may not be realizing the full potential value that could have been achieved through a competitive bidding process, potentially leading to a higher overall cost.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
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: $191,068,561
Exercised Options: $182,075,386
Current Obligation: $162,148,868
Actual Outlays: $4,196,588
Subaward Activity
Number of Subawards: 121
Total Subaward Amount: $10,404,116
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2017-08-01
Current End Date: 2026-04-30
Potential End Date: 2026-12-31 00:00:00
Last Modified: 2026-01-16
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