DoD's $195M MAXPOWER contract with Leidos, a sole-source R&D award, raises questions on value and competition
Contract Overview
Contract Amount: $19,531,186 ($19.5M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2010-09-30
End Date: 2017-03-26
Contract Duration: 2,369 days
Daily Burn Rate: $8.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: MAXPOWER OPERATIONAL ASSESSMENT
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $19.5 million to LEIDOS, INC. for work described as: MAXPOWER OPERATIONAL ASSESSMENT Key points: 1. The $195.3M contract awarded to Leidos, Inc. for R&D services lacks competitive bidding. 2. Awarded under a sole-source basis, the contract's pricing and value are difficult to benchmark against competitors. 3. The absence of competition may limit price discovery and potentially increase costs for taxpayers. 4. The contract falls under the R&D sector, specifically 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)'.
Value Assessment
Rating: questionable
The contract's total award value is $195,311,860. Without competitive bids or detailed cost breakdowns, assessing its pricing against similar R&D contracts is challenging. The Cost Plus Fixed Fee (CPFF) structure can lead to cost overruns if not managed tightly.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and the potential for obtaining the best value through market competition. The justification for sole-source procurement is critical for ensuring fair pricing.
Taxpayer Impact: The lack of competition in this sole-source award means taxpayers may not be receiving the most cost-effective solution. Without competitive pressure, the final cost could be higher than if multiple vendors had bid.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding on this significant R&D contract. The sole-source nature of the award limits transparency and accountability in how public funds are utilized. Citizens deserve assurance that government contracts, especially large ones, are awarded through fair and open competition to maximize value.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award lacks competition
- Potential for inflated costs
- Limited transparency in pricing
Positive Signals
- Awarded to a known entity (Leidos, Inc.)
- Contract duration aligns with R&D project needs
Sector Analysis
This contract falls under the Research and Development sector, specifically NAICS code 541712. Spending in this sector is crucial for innovation but requires careful oversight to ensure taxpayer funds are used efficiently and competitively.
Small Business Impact
The data indicates this contract was not awarded to small businesses (ss: false, sb: false). The focus on a large sole-source award to Leidos, Inc. means opportunities for small businesses in this specific R&D area were likely bypassed.
Oversight & Accountability
The 'VA' status and 'VIRGINIA' location suggest potential state-level oversight, but the sole-source nature of this large contract warrants federal scrutiny to ensure accountability and prevent potential waste or fraud.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award
- Lack of competitive bidding
- Potential for cost overruns (CPFF)
- Limited transparency on pricing
- No small business participation
Tags
research-and-development-in-the-physical, department-of-defense, va, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $19.5 million to LEIDOS, INC.. MAXPOWER OPERATIONAL ASSESSMENT
Who is the contractor on this award?
The obligated recipient is LEIDOS, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $19.5 million.
What is the period of performance?
Start: 2010-09-30. End: 2017-03-26.
What was the justification for awarding this significant R&D contract on a sole-source basis, and were alternative competitive strategies considered?
The justification for sole-source procurement is critical. Typically, it requires demonstrating that only one responsible source can provide the required services or that a compelling urgency exists. Without this information, it's difficult to assess if competitive alternatives were adequately explored or if this was the most efficient path to acquiring the necessary R&D capabilities.
How does the Cost Plus Fixed Fee (CPFF) structure of this contract ensure cost control and prevent potential overruns, especially given the lack of competition?
CPFF contracts aim to control costs by setting a fixed fee for the contractor's profit, incentivizing them to manage the cost base efficiently. However, without competitive pressure, the baseline cost estimates themselves could be inflated. Robust oversight and clear performance metrics are essential to mitigate the risk of cost overruns and ensure the government receives value.
What specific R&D outcomes or deliverables were expected from this $195M contract, and how will their success be measured to ensure effective use of taxpayer funds?
Measuring the success of R&D contracts, especially sole-source ones, requires clearly defined milestones, deliverables, and performance metrics. The government must have a robust system in place to track progress against these objectives and evaluate the ultimate impact and value derived from the $195M investment. Transparency in reporting these outcomes is key.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
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. (UEI: 611641312)
Address: 10260 CAMPUS POINT DR, SAN DIEGO, CA, 92121
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $19,531,186
Exercised Options: $19,531,186
Current Obligation: $19,531,186
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2010-09-30
Current End Date: 2017-03-26
Potential End Date: 2017-03-26 00:00:00
Last Modified: 2016-07-19
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