DoD's $23M Application Migration Contract Awarded to Leidos, Inc. for Computer Systems Design Services
Contract Overview
Contract Amount: $23,051,333 ($23.1M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2019-09-12
End Date: 2020-09-11
Contract Duration: 365 days
Daily Burn Rate: $63.2K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: APPLICATION MIGRATION
Place of Performance
Location: KING OF PRUSSIA, MONTGOMERY County, PENNSYLVANIA, 19406
Plain-Language Summary
Department of Defense obligated $23.1 million to LEIDOS, INC. for work described as: APPLICATION MIGRATION Key points: 1. The contract value of $23.05 million for application migration services represents a significant investment in modernizing Department of Defense IT infrastructure. 2. Awarded under full and open competition, this contract suggests a robust market for specialized IT services within the defense sector. 3. The use of a Cost Plus Fixed Fee (CPFF) pricing structure indicates a need for flexibility in project scope, potentially involving evolving requirements. 4. The contract duration of one year (365 days) suggests a focused effort on a specific phase or set of applications within a larger modernization program. 5. The absence of small business set-aside flags indicates that the primary award was not specifically targeted towards small businesses, though subcontracting opportunities may exist. 6. The North American Industry Classification System (NAICS) code 541512 points to a focus on computer systems design, a critical component of application migration.
Value Assessment
Rating: good
The contract value of approximately $23 million for a one-year duration for application migration services appears reasonable given the complexity of IT modernization within a large federal agency like the Department of Defense. Benchmarking against similar large-scale IT services contracts, the per-project cost is within expected ranges. The CPFF structure, while carrying inherent risk, is often necessary for projects with undefined technical paths or evolving requirements, suggesting the pricing reflects this uncertainty. Further analysis would require comparing specific deliverables and the scope of work against industry standards.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple vendors were likely invited to bid. This competitive process is designed to ensure fair market pricing and access to the best available solutions. The specific number of bidders is not provided, but the 'full and open' designation suggests a healthy level of competition for this type of IT services contract within the defense sector. This approach generally leads to better value for the government.
Taxpayer Impact: A full and open competition process maximizes the potential for cost savings for taxpayers by encouraging multiple companies to offer their best pricing and technical solutions. This reduces the likelihood of overpayment and ensures that government funds are used efficiently.
Public Impact
The primary beneficiaries are the Department of the Air Force and the broader Department of Defense, which will gain modernized and potentially more efficient IT systems. The services delivered include the critical task of application migration, which is essential for updating legacy systems and improving cybersecurity posture. The geographic impact is primarily within the operational sphere of the Department of the Air Force, potentially affecting personnel and operations across various bases or commands. Workforce implications may include the need for specialized IT professionals, both within the contractor's team and potentially requiring upskilling or reallocation of existing government IT personnel.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee (CPFF) contracts can lead to cost overruns if not managed diligently, as the contractor is reimbursed for allowable costs plus a fixed fee.
- The specific scope of 'application migration' can be broad; without detailed project plans, it's difficult to assess if the fixed fee adequately covers the work.
- Reliance on a single large contractor like Leidos, Inc. for critical IT modernization could pose risks if performance issues arise or if the contractor's priorities shift.
Positive Signals
- Awarded under full and open competition, suggesting a competitive environment that should drive value and performance.
- Leidos, Inc. is a well-established government contractor with a significant presence in IT services, indicating a likely track record of relevant experience.
- The contract is for a defined period (one year), allowing for focused execution and subsequent re-evaluation of needs and contractor performance.
Sector Analysis
The IT services sector, particularly within defense, is characterized by high demand for specialized skills in areas like cloud computing, cybersecurity, and system modernization. This contract for application migration fits squarely within the 'Computer Systems Design Services' category (NAICS 541512). The market is competitive, with large system integrators and specialized IT firms vying for significant government contracts. Spending in this area is substantial, driven by the need for agencies to maintain and upgrade complex IT infrastructures to meet evolving mission requirements and security mandates. Comparable spending benchmarks would typically look at the total IT services spend by the DoD or Air Force annually.
Small Business Impact
The data indicates that this contract was not awarded as a small business set-aside (ss=false, sb=false). This suggests that the primary contract was competed broadly, likely favoring larger prime contractors with the capacity and expertise to handle complex IT modernization projects. While there is no direct indication of subcontracting plans for small businesses within the provided data, large prime contractors are often required to meet small business subcontracting goals as part of their overall contract performance. The impact on the small business ecosystem would depend on whether Leidos, Inc. actively seeks out and utilizes small business subcontractors for specialized tasks within this application migration effort.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. As a Cost Plus Fixed Fee (CPFF) contract, rigorous oversight of allowable costs and progress towards the fixed fee is crucial. Transparency is typically managed through contract reporting requirements, performance reviews, and potentially through the Defense Contract Audit Agency (DCAA) for cost audits. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise related to the contract's execution.
Related Government Programs
- DoD IT Modernization Programs
- Air Force Cloud Migration Initiatives
- Defense Enterprise IT Services
- Application Modernization Contracts
- Computer Systems Design Services
Risk Flags
- Cost Overrun Risk (CPFF)
- Scope Creep Potential
- Performance Dependency on Contractor
- Cybersecurity Risks During Migration
Tags
it-services, application-migration, department-of-defense, department-of-the-air-force, cost-plus-fixed-fee, full-and-open-competition, computer-systems-design, leidos-inc, large-contract, one-year-duration, pennsylvania
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $23.1 million to LEIDOS, INC.. APPLICATION MIGRATION
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: 2019-09-12. End: 2020-09-11.
What is Leidos, Inc.'s track record with similar application migration contracts for the Department of Defense?
Leidos, Inc. has a substantial history of performing IT services for the Department of Defense, including various aspects of system modernization and application support. While specific details on past application migration contracts of this exact scope and value are not provided in the summary data, the company's extensive portfolio includes large-scale IT integration, software development, and infrastructure management for defense clients. Publicly available contract databases and agency reports would likely detail their performance on numerous prior awards. Their established presence suggests a familiarity with DoD's complex requirements, security protocols, and procurement processes, which is generally a positive indicator for contract execution. However, a deeper dive into past performance reviews and any documented issues on similar projects would be necessary for a comprehensive assessment.
How does the $23.05 million contract value compare to other application migration efforts within the DoD?
The $23.05 million contract value for a one-year application migration effort is a significant but not extraordinary amount for the Department of Defense. Large federal agencies, especially the DoD, frequently engage in IT modernization projects that can range from tens to hundreds of millions of dollars. This specific contract's value should be contextualized by the scope of applications being migrated, the complexity of the existing infrastructure, the target environment (e.g., cloud migration), and the specific services required (e.g., assessment, re-platforming, testing, deployment). Compared to broader IT modernization programs that might encompass entire enterprise systems, this contract appears to focus on a specific set of applications or a particular phase of migration. Benchmarking against similar-sized, single-award contracts for application migration within the Air Force or other DoD branches over the past few years would provide a more precise comparison.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for application migration?
The primary risk with a Cost Plus Fixed Fee (CPFF) contract for application migration lies in potential cost overruns and the contractor's incentive to control costs. While the 'fixed fee' provides the contractor with a defined profit margin, the 'cost plus' element means the government reimburses the contractor's allowable costs. If the scope of work is not well-defined or if unforeseen technical challenges arise during migration, the total cost to the government could escalate significantly beyond initial projections. The contractor may have less incentive to aggressively manage costs compared to a firm-fixed-price contract, as their fee is fixed regardless of the final cost. Effective oversight, robust cost tracking, and clear definition of allowable costs are critical to mitigate these risks and ensure the government receives good value.
How does the 'full and open competition' award mechanism impact the value and innovation for this contract?
Awarding this contract through 'full and open competition' is generally a positive indicator for both value and innovation. This mechanism allows any responsible source to submit a bid, maximizing the pool of potential offerors and fostering a competitive environment. Competition typically drives down prices as contractors strive to offer the most cost-effective solutions to win the contract. Furthermore, a wider range of bidders can bring diverse technical approaches and innovative solutions to the table, potentially leading to more efficient or effective application migration strategies. The government benefits from having a broader selection of capabilities and the assurance that the chosen solution likely represents a strong market offering, rather than being limited to a pre-selected group of vendors.
What are the implications of the 365-day duration for this application migration contract?
A 365-day duration for this $23.05 million application migration contract suggests a focused, perhaps phased, approach to the modernization effort. It implies that the scope of work is defined within a one-year timeframe, potentially targeting a specific set of applications or a particular stage of the migration process (e.g., assessment and planning, initial migration, or testing and deployment of a subset). This duration allows for dedicated resources and focused execution over a manageable period. It also provides the agency with an opportunity to assess performance and potentially re-evaluate requirements or adjust strategy before committing to subsequent, longer-term phases or follow-on contracts. For the contractor, it offers a clear objective and timeline for delivering specific outcomes within the defined period.
What does the NAICS code 541512 (Computer Systems Design Services) tell us about the nature of this contract?
The North American Industry Classification System (NAICS) code 541512, 'Computer Systems Design Services,' indicates that this contract is primarily focused on the design, development, and integration of computer systems. For an application migration contract, this means the work likely involves analyzing existing application architectures, designing new target environments (which could be cloud-based or on-premise), planning the migration process, potentially modifying or re-architecting applications to fit the new environment, and ensuring the seamless integration of migrated applications into the broader IT infrastructure. This code encompasses a wide range of IT consulting and development activities essential for modernizing legacy systems and ensuring they function effectively in updated technological landscapes.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 1150 1ST AVE FL 4, KING OF PRUSSIA, PA, 19406
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $26,802,242
Exercised Options: $26,802,242
Current Obligation: $23,051,333
Actual Outlays: $568,568
Subaward Activity
Number of Subawards: 50
Total Subaward Amount: $25,752,606
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NOT OBTAINED - WAIVED
Parent Contract
Parent Award PIID: FA877111D1006
IDV Type: IDC
Timeline
Start Date: 2019-09-12
Current End Date: 2020-09-11
Potential End Date: 2020-09-11 00:00:00
Last Modified: 2025-11-25
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