GSA's $19M IT contract for electronic key management services awarded to Leidos, Inc. shows potential value concerns
Contract Overview
Contract Amount: $18,981,017 ($19.0M)
Contractor: Leidos, Inc.
Awarding Agency: General Services Administration
Start Date: 2005-09-01
End Date: 2009-08-31
Contract Duration: 1,460 days
Daily Burn Rate: $13.0K/day
Number of Offers Received: 2
Pricing Type: TIME AND MATERIALS
Sector: IT
Official Description: CLASSIFIED TIER3 ELECTRONIC KEY MANAGEMENT SYSTEM
Place of Performance
Location: SAN ANTONIO, BEXAR County, TEXAS, 78201
State: Texas Government Spending
Plain-Language Summary
General Services Administration obligated $19.0 million to LEIDOS, INC. for work described as: CLASSIFIED TIER3 ELECTRONIC KEY MANAGEMENT SYSTEM Key points: 1. The contract's duration and time-and-materials pricing structure may lead to cost overruns. 2. Limited competition was noted, with only two bidders participating in the award process. 3. The contractor, Leidos, Inc., has a substantial presence in the federal IT sector. 4. Performance context is limited due to the nature of the service provided. 5. This contract falls within the IT sector, specifically focusing on computer facilities management. 6. The contract was awarded in Texas, indicating a specific geographic focus for service delivery.
Value Assessment
Rating: fair
The contract's total value of $18.98 million over four years, utilizing a Time and Materials (T&M) pricing model, warrants scrutiny. T&M contracts can be prone to cost escalation if not closely managed, as the final price is directly tied to the hours worked and materials used. Benchmarking against similar IT facilities management contracts is challenging without more granular data on labor categories and material costs. However, the lack of a fixed ceiling or more defined scope could suggest a less cost-certain arrangement compared to firm-fixed-price contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
This contract was awarded under a limited competition, with only two bids received. While the specific reasons for limited competition are not detailed, it suggests that the pool of qualified bidders may have been restricted, or the solicitation process did not encourage broader participation. A limited competition can sometimes result in higher prices for the government compared to a full and open competition, as the vendor faces less pressure to offer the most competitive bid.
Taxpayer Impact: The limited number of bidders may have resulted in taxpayers paying a premium, as the government had fewer options to drive down costs through robust price competition.
Public Impact
The primary beneficiary of this contract is the General Services Administration (GSA), which receives electronic key management system services. The services delivered are crucial for secure access and management of electronic keys within federal facilities. The contract has a geographic impact primarily in Texas, where the services are performed. Workforce implications include the employment of IT professionals and support staff by Leidos, Inc. to fulfill the contract requirements.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Time and Materials pricing model increases risk of cost overruns.
- Limited competition may have led to suboptimal pricing.
- Lack of detailed performance metrics makes value assessment difficult.
Positive Signals
- Contract awarded to a well-established federal contractor, Leidos, Inc.
- Services provided are essential for federal IT security infrastructure.
- Contract duration of four years allows for stable service provision.
Sector Analysis
This contract falls within the broader Information Technology (IT) sector, specifically under the Computer Facilities Management Services NAICS code (541513). This sub-sector involves the management and operation of computer systems and related facilities for others. The federal IT market is vast, with significant spending on infrastructure, software, and services. Comparable spending benchmarks for electronic key management systems are difficult to pinpoint due to their specialized nature, but overall IT services spending by the GSA is substantial, often in the billions annually.
Small Business Impact
The contract data indicates that small business participation was not a primary focus, as the contract was not set aside for small businesses (ss: false) and the awardee, Leidos, Inc., is a large corporation. There is no explicit information regarding subcontracting plans for small businesses. This suggests that the primary benefits of this contract will likely accrue to large businesses, with limited direct impact on the small business IT ecosystem unless Leidos actively engages small business subcontractors.
Oversight & Accountability
Oversight for this contract would primarily fall under the purview of the General Services Administration (GSA), specifically the Federal Acquisition Service. The contract's Time and Materials nature necessitates diligent monitoring of labor hours and material costs to ensure compliance and prevent overcharging. Transparency is facilitated through contract databases like FPDS, but detailed operational oversight and accountability measures are internal to the agency and contractor. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.
Related Government Programs
- Federal Identity, Credential, and Access Management (ICAM)
- IT Infrastructure Management Services
- Cybersecurity Services
- Electronic Security Systems
Risk Flags
- Time and Materials pricing model
- Limited competition
- Lack of detailed scope definition
Tags
it, general-services-administration, texas, time-and-materials, large-contract, limited-competition, computer-facilities-management-services, electronic-key-management-system, leidos-inc
Frequently Asked Questions
What is this federal contract paying for?
General Services Administration awarded $19.0 million to LEIDOS, INC.. CLASSIFIED TIER3 ELECTRONIC KEY MANAGEMENT SYSTEM
Who is the contractor on this award?
The obligated recipient is LEIDOS, INC..
Which agency awarded this contract?
Awarding agency: General Services Administration (Federal Acquisition Service).
What is the total obligated amount?
The obligated amount is $19.0 million.
What is the period of performance?
Start: 2005-09-01. End: 2009-08-31.
What is the track record of Leidos, Inc. in delivering similar electronic key management systems to the federal government?
Leidos, Inc. is a major federal contractor with extensive experience across various IT services, including cybersecurity and infrastructure management. While specific details on their performance for electronic key management systems under this particular contract (awarded in 2005) are not publicly detailed in this summary, the company's broad portfolio suggests a capacity to handle such requirements. Historical data from contract databases would be needed to assess their performance trends, on-time delivery rates, and any past performance issues or commendations related to similar systems. Their significant presence in the federal IT market indicates a general familiarity with government contracting requirements and security protocols.
How does the $18.98 million cost compare to similar federal contracts for electronic key management systems?
Directly comparing the $18.98 million cost to similar federal contracts for electronic key management systems is challenging without more specific details on the scope of services, duration, and the exact technologies deployed. This contract, awarded in 2005 and ending in 2009, utilized a Time and Materials (T&M) pricing model over 1460 days. T&M contracts inherently have variable costs. To benchmark effectively, one would need to identify contracts with comparable service levels, security requirements, and geographic coverage, ideally awarded around the same period or more recently, and analyze their total contract values and pricing structures (e.g., fixed-price vs. T&M). The limited competition also suggests potential for less favorable pricing.
What are the primary risks associated with this Time and Materials contract, and how were they mitigated?
The primary risk associated with this Time and Materials (T&M) contract is the potential for cost escalation due to undefined labor hours and material usage, leading to budget overruns. Without a firm ceiling or detailed scope, the contractor has less incentive to control costs. Mitigation strategies typically involve robust oversight, including detailed review of timesheets, verification of material costs, and strict adherence to pre-negotiated labor rates. The government contracting officer must actively manage the contract, ensuring that all hours billed are necessary and reasonable for the work performed. The limited competition also adds a layer of risk regarding price competitiveness.
What was the effectiveness of the competition process in ensuring value for taxpayers?
The effectiveness of the competition process in ensuring value for taxpayers appears questionable given that this contract was awarded under limited competition with only two bidders. A robust, full and open competition typically yields the best value by exposing the government to a wider range of offers and fostering price reductions through competitive pressure. With only two bidders, the government's negotiating leverage is reduced, potentially leading to higher prices than might be achieved in a more crowded field. The specific details of the solicitation and evaluation process would be needed to fully assess if the chosen contractor offered the best value under the circumstances, but the limited pool inherently raises concerns.
How has federal spending on electronic key management systems evolved since this contract was awarded in 2005?
Federal spending on electronic key management systems has likely evolved significantly since this contract was awarded in 2005. Advancements in technology, including cloud-based solutions, biometrics, and integrated access control systems, have likely shifted the landscape. Furthermore, increased emphasis on cybersecurity and data protection post-9/11 and subsequent cyber threats may have driven higher spending and more sophisticated requirements. While this specific contract represented $18.98 million over four years, overall federal IT spending, including security and access management, has grown substantially. Analyzing current contract awards for similar services would reveal trends in technology adoption, pricing models, and overall investment levels in this domain.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Facilities Management Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Contractor Details
Parent Company: Leidos Holdings, Inc. (UEI: 611641312)
Address: 10302 EATON PLACE, SUITE 150, FAIRFAX, VA, 11
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $18,981,017
Exercised Options: $18,981,017
Current Obligation: $18,981,017
Parent Contract
Parent Award PIID: GS07T00BGD0028
IDV Type: GWAC
Timeline
Start Date: 2005-09-01
Current End Date: 2009-08-31
Potential End Date: 2009-08-31 00:00:00
Last Modified: 2012-05-07
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