Air Force awards $63.1M contract for Wide Area Surveillance systems to Leidos, Inc
Contract Overview
Contract Amount: $63,134,107 ($63.1M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2018-05-03
End Date: 2025-09-30
Contract Duration: 2,707 days
Daily Burn Rate: $23.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: WIDE AREA SURVEILLANCE- S2 PRODUCTION
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $63.1 million to LEIDOS, INC. for work described as: WIDE AREA SURVEILLANCE- S2 PRODUCTION Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Significant duration of over 2700 days suggests a long-term need for surveillance capabilities. 3. Cost-Plus-Fixed-Fee contract type may incentivize cost overruns. 4. The contract supports critical national security functions related to intelligence, surveillance, and reconnaissance (ISR). 5. Leidos, Inc. is a major defense contractor with extensive experience in similar systems. 6. The contract's value is substantial, indicating a significant investment in advanced surveillance technology.
Value Assessment
Rating: fair
The contract value of $63.1 million over approximately 7.4 years (2707 days) averages to roughly $8.5 million per year. Benchmarking this against similar large-scale surveillance system development and production contracts is challenging due to the specialized nature of Wide Area Surveillance. However, the Cost Plus Fixed Fee (CPFF) contract type, while common for R&D and complex systems, carries inherent risks of cost escalation if not meticulously managed. Without detailed cost breakdowns or comparisons to independent cost estimates, a definitive value-for-money assessment is difficult, but the duration and complexity suggest a potentially fair, though not necessarily optimal, price point.
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 a specific contractor possesses unique capabilities, proprietary technology, or when urgency dictates a rapid award. The lack of competition means that taxpayers did not benefit from potential price reductions that could arise from a competitive bidding process. This also limits the government's ability to explore alternative solutions or innovations from other market participants.
Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as there is no competitive pressure to drive down costs. It also reduces the opportunity for the government to leverage a wider range of industry capabilities.
Public Impact
The primary beneficiaries are the Department of Defense and its intelligence agencies, which will receive advanced Wide Area Surveillance capabilities. The contract delivers critical intelligence, surveillance, and reconnaissance (ISR) data essential for national security operations. Geographic impact is likely global, supporting military operations and threat monitoring worldwide. Workforce implications include employment opportunities for engineers, technicians, and support staff at Leidos, Inc. and its subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pressure on pricing.
- Cost-Plus-Fixed-Fee structure can incentivize higher costs if not managed stringently.
- Long contract duration increases exposure to potential scope creep or evolving technological requirements.
- Lack of transparency in the sole-source justification could mask underlying issues.
- Potential for vendor lock-in due to specialized system development.
Positive Signals
- Leidos, Inc. is an established contractor with a proven track record in defense systems.
- The contract addresses a critical national security need for advanced surveillance.
- The fixed fee component provides some cost certainty compared to pure cost-reimbursement contracts.
- The long duration allows for sustained development and integration of complex technologies.
- The contract is managed by the Department of the Air Force, a major procurement entity.
Sector Analysis
The Wide Area Surveillance (WAS) market is a specialized segment within the broader aerospace and defense industry, focusing on advanced sensor and data processing technologies for persistent monitoring over large geographical areas. This sector is characterized by high R&D investment, long development cycles, and significant government procurement. Companies like Leidos, Inc. operate in a landscape dominated by large, established defense contractors due to the complexity and scale of these systems. Comparable spending benchmarks are difficult to pinpoint precisely due to the proprietary nature of WAS technologies, but annual spending on ISR systems by the DoD runs into billions of dollars, with individual system procurements often in the tens to hundreds of millions.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss' (small business subcontracting) is also false. This suggests that the prime contract is not specifically targeted towards small businesses, nor is there a mandated subcontracting plan for small businesses. While Leidos, Inc. may engage small businesses as subcontractors, there is no explicit requirement within this contract's data to ensure broad participation or benefit for the small business ecosystem in this specific procurement.
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 (CPFF) structure necessitates robust financial oversight to monitor expenditures and ensure the fixed fee is earned appropriately. Transparency is limited due to the sole-source nature of the award. Inspector General (IG) jurisdiction would apply in cases of fraud, waste, or abuse, but day-to-day performance and cost management oversight rests with the contracting agency.
Related Government Programs
- Intelligence, Surveillance, and Reconnaissance (ISR) Systems
- Aerospace and Defense Procurement
- Advanced Sensor Technology
- National Security Systems
- Department of Defense Major Weapon Systems
Risk Flags
- Sole-source award
- Cost-Plus-Fixed-Fee contract type
- Lack of small business subcontracting requirements
Tags
defense, department-of-defense, department-of-the-air-force, leidos-inc, definitive-contract, cost-plus-fixed-fee, sole-source, wide-area-surveillance, intelligence-surveillance-reconnaissance, virginia, large-contract, national-security
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $63.1 million to LEIDOS, INC.. WIDE AREA SURVEILLANCE- S2 PRODUCTION
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 $63.1 million.
What is the period of performance?
Start: 2018-05-03. End: 2025-09-30.
What is Leidos, Inc.'s track record with similar Wide Area Surveillance or ISR systems contracts for the Department of Defense?
Leidos, Inc. has a substantial track record in providing advanced technology solutions and services to the Department of Defense, including significant work in intelligence, surveillance, and reconnaissance (ISR) systems. While specific details on their WAS contracts are often classified or proprietary, the company has been involved in developing and integrating complex sensor systems, data analytics platforms, and command and control solutions for various military branches. Their experience spans areas like airborne surveillance, signal intelligence, and geospatial intelligence. Leidos's history includes numerous large-scale defense contracts, demonstrating their capability to manage complex projects, integrate advanced technologies, and meet stringent performance requirements. This background suggests they possess the technical expertise and program management capacity necessary for the Wide Area Surveillance contract awarded by the Air Force.
How does the $63.1 million contract value compare to other large-scale ISR system procurements by the Air Force or DoD?
The $63.1 million contract value for Wide Area Surveillance systems positions this procurement as a significant, but not exceptionally large, investment within the broader context of Department of Defense ISR spending. Major ISR platforms, such as advanced aircraft or satellite systems, can cost hundreds of millions or even billions of dollars. However, contracts focused on specific system development, production, or sustainment, like this one for WAS, often fall within the tens to low hundreds of millions. For instance, procurements for advanced radar systems, sensor upgrades, or specialized intelligence processing capabilities frequently range in this value bracket. The value is substantial enough to indicate a critical capability being acquired, but it is not at the scale of a new major weapon system acquisition program.
What are the primary risks associated with a sole-source, Cost Plus Fixed Fee (CPFF) contract for advanced surveillance technology?
The primary risks associated with a sole-source, CPFF contract for advanced surveillance technology are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher prices than might be achieved in a competed environment. The government foregoes the opportunity to explore alternative solutions or benefit from market-driven cost reductions. Secondly, the CPFF structure, while providing a degree of cost certainty through the fixed fee, can incentivize the contractor to incur higher costs to maximize their fee, especially if the 'cost' portion of the contract is not rigorously controlled and audited. This requires intensive government oversight to ensure costs are reasonable and allocable. For advanced technology, there's also the risk of technical challenges leading to cost overruns, which the CPFF structure may not fully mitigate if not managed proactively.
What is the expected program effectiveness or outcome based on the contract details?
Based on the contract details, the expected program outcome is the delivery and sustainment of Wide Area Surveillance (WAS) systems by Leidos, Inc. for the Department of the Air Force. The contract's duration (over 7 years) suggests a focus on providing a persistent, long-term capability. WAS systems are designed to provide continuous monitoring over large areas, enhancing intelligence gathering, situational awareness, and decision-making for military operations. The effectiveness will be measured by the system's ability to reliably detect, track, and identify targets of interest within its designated operational area, providing actionable intelligence to end-users. The CPFF structure implies that the government is willing to accept some cost variability to ensure the successful development and deployment of this critical technology, aiming for high operational effectiveness.
How has federal spending on Wide Area Surveillance or similar ISR technologies evolved over the past 5-10 years?
Federal spending on Wide Area Surveillance (WAS) and broader Intelligence, Surveillance, and Reconnaissance (ISR) technologies has been a consistent and significant component of the Department of Defense budget over the past 5-10 years. While specific figures for WAS are often embedded within larger ISR program lines, overall ISR spending has remained robust, driven by ongoing global security challenges and the recognized value of persistent monitoring capabilities. There has been a continuous push towards more advanced, networked, and data-centric ISR solutions, including investments in artificial intelligence for data analysis, multi-INT fusion, and resilient communication systems. Spending trends reflect a shift from platform-centric acquisition to capability-centric acquisition, emphasizing the integration of sensors, data processing, and dissemination. While specific budget allocations fluctuate based on strategic priorities and technological advancements, the demand for effective WAS capabilities remains high, indicating sustained investment in this area.
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: COMM/DETECT/COHERENT RADIATION
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: $133,788,738
Exercised Options: $127,556,402
Current Obligation: $63,134,107
Actual Outlays: $3,419,527
Subaward Activity
Number of Subawards: 108
Total Subaward Amount: $15,648,630
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2018-05-03
Current End Date: 2025-09-30
Potential End Date: 2025-09-30 00:00:00
Last Modified: 2025-08-22
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