Leidos Inc. awarded $150.8M contract for custom computer programming services by the Department of Defense
Contract Overview
Contract Amount: $150,787,886 ($150.8M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2016-12-29
End Date: 2023-04-14
Contract Duration: 2,297 days
Daily Burn Rate: $65.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: COST PLUS INCENTIVE FEE
Sector: IT
Official Description: IGF::OT::IGF
Place of Performance
Location: ABERDEEN PROVING GROUND, HARFORD County, MARYLAND, 21005
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $150.8 million to LEIDOS, INC. for work described as: IGF::OT::IGF Key points: 1. Contract value represents a significant investment in IT services for defense operations. 2. The award was made under full and open competition, suggesting a robust bidding process. 3. The contract duration of nearly 6 years indicates a long-term need for these services. 4. The cost-plus-incentive-fee structure aims to align contractor performance with government objectives. 5. This contract falls within the broader category of IT services supporting national security.
Value Assessment
Rating: good
The contract value of $150.8 million over approximately 6 years suggests a substantial but potentially reasonable investment for custom programming services. Benchmarking against similar large-scale IT contracts within the Department of Defense is crucial for a definitive value assessment. The cost-plus-incentive-fee (CPIF) pricing structure, while common for complex projects, requires careful monitoring to ensure cost efficiencies and that incentives are effectively driving desired outcomes. Without specific per-unit cost data or direct comparisons to identical services, a precise value-for-money judgment is challenging, but the competitive award process provides some assurance.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of 4 bids suggests a healthy level of competition for this requirement. A competitive process like this generally leads to better price discovery and can drive innovation as contractors vie for the award. The government likely received a range of proposals, allowing for selection of the best value offering.
Taxpayer Impact: Taxpayers benefit from a competitive process as it typically results in more favorable pricing and a higher likelihood of receiving quality services that meet the government's needs efficiently.
Public Impact
The primary beneficiaries are the Department of Defense and its various branches, which will receive enhanced custom computer programming services. These services are critical for maintaining and upgrading the technological infrastructure supporting military operations and national security. The geographic impact is likely concentrated around defense installations and operational theaters where these IT systems are deployed. The contract supports a workforce skilled in software development, systems integration, and IT support, contributing to the tech sector employment.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- The CPIF contract type requires diligent oversight to ensure costs remain within reasonable bounds and incentives are structured to prevent cost overruns.
- Long contract durations can sometimes lead to scope creep or outdated technology if not managed proactively.
- The specific nature of 'custom computer programming' can be broad, necessitating clear performance metrics and deliverables.
Positive Signals
- Awarded under full and open competition with multiple bidders indicates a strong market response and potential for competitive pricing.
- The contract's duration suggests a stable, long-term need, allowing for focused development and integration of IT solutions.
- The use of an incentive fee structure, if well-defined, can drive contractor performance and efficiency.
Sector Analysis
The Information Technology (IT) sector is a critical enabler for all government functions, particularly within defense. Custom computer programming services are essential for developing bespoke software solutions tailored to unique operational requirements, cybersecurity needs, and data management challenges. This contract fits within the broader IT services market, which is characterized by rapid innovation and significant government spending. Comparable spending benchmarks would involve analyzing other large-scale custom software development contracts awarded by defense agencies for similar complexity and duration.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the prime contractor, Leidos, Inc., is a large business. While there is no direct set-aside, large prime contractors are often required to meet subcontracting goals with small businesses. The extent to which Leidos will utilize small businesses for subcontracting opportunities will determine the impact on the small business ecosystem for this specific contract.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and their representatives within the Defense Information Systems Agency (DISA). Performance monitoring, financial reviews, and adherence to contract terms are standard oversight mechanisms. The CPIF structure necessitates close scrutiny of costs and performance against established incentives. Transparency is generally maintained through contract reporting requirements, though specific details of performance and cost may be sensitive.
Related Government Programs
- Defense Information Technology Services
- Custom Software Development Contracts
- Department of Defense IT Modernization Programs
- IT Services for National Security
Risk Flags
- Potential for cost overruns due to CPIF structure
- Risk of scope creep over the contract's long duration
- Ensuring alignment of incentive metrics with true value
- Dependency on a single contractor for critical IT functions
Tags
it, defense, department-of-defense, custom-computer-programming, definitive-contract, full-and-open-competition, cost-plus-incentive-fee, leidos-inc, maryland, large-contract, it-services, software-development
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $150.8 million to LEIDOS, INC.. IGF::OT::IGF
Who is the contractor on this award?
The obligated recipient is LEIDOS, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Information Systems Agency).
What is the total obligated amount?
The obligated amount is $150.8 million.
What is the period of performance?
Start: 2016-12-29. End: 2023-04-14.
What is Leidos, Inc.'s track record with similar custom computer programming contracts for the Department of Defense?
Leidos, Inc. has a substantial track record with the Department of Defense, frequently securing large contracts for IT services, including custom software development and systems integration. Their history includes numerous awards across various defense agencies, often involving complex, mission-critical systems. Analyzing their past performance on similar CPIF contracts would reveal their ability to manage costs, meet performance metrics, and deliver on schedule. While generally considered a capable contractor, specific contract performance reviews and past performance evaluations would provide a more granular understanding of their success rates and any challenges encountered on prior engagements.
How does the $150.8 million value compare to other custom programming contracts of similar scope and duration?
The $150.8 million contract value over approximately 6 years places this award in the mid-to-large range for custom computer programming services within the federal government, particularly for defense applications. To benchmark effectively, one would compare this to other definitive contracts awarded by agencies like DISA, the Air Force, or Navy for similar NAICS codes (e.g., 541511) and contract types (e.g., CPIF). Factors such as the complexity of the software, the level of integration required, and the specific security clearances needed can significantly influence pricing. Without access to a comprehensive database of comparable contract values adjusted for these variables, a precise comparison is difficult, but the amount suggests a significant and complex undertaking.
What are the primary risks associated with a Cost Plus Incentive Fee (CPIF) contract of this magnitude?
The primary risks with a CPIF contract of this magnitude revolve around cost control and performance alignment. For the government, there's a risk that costs could escalate beyond initial projections if the incentive structure is not perfectly aligned with desired outcomes or if unforeseen technical challenges arise. Contractor performance is incentivized, but defining the right metrics and targets is critical; poorly defined incentives can lead to unintended consequences or focus on easily achievable goals rather than true value. For the contractor, the risk lies in not meeting the performance targets required to earn the maximum incentive fee, potentially impacting profitability. Diligent oversight, clear communication, and robust performance metrics are essential to mitigate these risks.
How effective are custom computer programming services in enhancing defense operational capabilities?
Custom computer programming services are highly effective in enhancing defense operational capabilities by providing tailored solutions that meet unique and evolving military requirements. Unlike off-the-shelf software, custom solutions can be designed for specific mission needs, integrate seamlessly with existing legacy systems, and incorporate advanced features for intelligence gathering, command and control, logistics, and cybersecurity. For instance, custom software can enable real-time data analysis for battlefield awareness, develop secure communication platforms, or create specialized simulation and training environments. The effectiveness hinges on the quality of the programming, the clarity of the requirements, and the contractor's understanding of the defense context.
What is the historical spending trend for custom computer programming services within the Department of Defense?
Historical spending trends for custom computer programming services within the Department of Defense have generally shown a consistent and often increasing demand. As technology evolves and threats become more sophisticated, the need for specialized, adaptable software solutions grows. Defense agencies frequently rely on custom development to maintain a technological edge, integrate diverse systems, and address unique cybersecurity challenges. While specific figures fluctuate year-to-year based on budgetary priorities and major program initiatives, the overall trajectory indicates a significant and sustained investment in this area, reflecting its critical importance to national security operations.
What are the implications of awarding a definitive contract versus other contract types for this service?
Awarding a definitive contract, in this case, implies a single, established agreement that outlines the terms and conditions for the duration of the service period. Unlike task orders under a larger indefinite-delivery/indefinite-quantity (IDIQ) contract, a definitive contract is typically a standalone award. For custom programming, this suggests a well-defined, long-term requirement where the scope, pricing (even if CPIF), and deliverables are sufficiently understood at the time of award to commit to a fixed agreement. This can provide stability for both the government and the contractor, facilitating focused development and resource allocation, though it may offer less flexibility than an IDIQ if requirements change significantly.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: HC102816R0005
Offers Received: 4
Pricing Type: COST PLUS INCENTIVE FEE (V)
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: $180,534,658
Exercised Options: $161,386,476
Current Obligation: $150,787,886
Subaward Activity
Number of Subawards: 296
Total Subaward Amount: $57,328,337
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2016-12-29
Current End Date: 2023-04-14
Potential End Date: 2023-04-14 00:00:00
Last Modified: 2023-03-22
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