Leidos Inc. awarded $48.5M contract for wired telecommunications, highlighting significant defense IT infrastructure investment
Contract Overview
Contract Amount: $48,533,010 ($48.5M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2018-05-23
End Date: 2021-10-01
Contract Duration: 1,227 days
Daily Burn Rate: $39.6K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: IGF::CT::IGF
Place of Performance
Location: FORT GEORGE G MEADE, ANNE ARUNDEL County, MARYLAND, 20755
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $48.5 million to LEIDOS, INC. for work described as: IGF::CT::IGF Key points: 1. Contract value represents a substantial investment in critical telecommunications infrastructure. 2. The award to a single large contractor suggests a focus on established capabilities. 3. Contract duration of over 3 years indicates a long-term need for these services. 4. The 'Cost Plus Fixed Fee' pricing structure warrants scrutiny for potential cost overruns. 5. This contract falls within the broader category of defense information systems and telecommunications. 6. Performance in Maryland suggests a concentration of critical infrastructure in that region.
Value Assessment
Rating: fair
The contract value of $48.5 million over approximately three years for wired telecommunications services appears to be within a reasonable range for large-scale government IT infrastructure projects. However, without specific benchmarks for the exact services rendered (e.g., bandwidth, network management, equipment), a precise value-for-money assessment is challenging. The 'Cost Plus Fixed Fee' (CPFF) structure, while common for complex projects, carries inherent risks of cost escalation if not meticulously managed and audited. Comparing this to similar large-scale telecommunications contracts awarded by DISA or other defense agencies would provide a clearer picture of its competitiveness.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'Full and Open Competition,' indicating that all responsible sources were permitted to submit offers. While the specific number of bidders is not provided, this procurement method generally fosters a competitive environment, which should theoretically lead to better pricing and service offerings for the government. The fact that Leidos, Inc. was ultimately awarded the contract suggests they offered the best value proposition among the competing entities.
Taxpayer Impact: A full and open competition is generally favorable for taxpayers as it maximizes the potential for competitive pricing and encourages a wider range of innovative solutions, ultimately aiming for the best use of public funds.
Public Impact
The Department of Defense, specifically the Defense Information Systems Agency (DISA), is the primary beneficiary, ensuring robust telecommunications capabilities. Services delivered likely include the maintenance, upgrade, and operation of wired telecommunications networks essential for military operations. The geographic impact is concentrated in Maryland, suggesting a significant presence of defense infrastructure in that state. Workforce implications may include specialized IT and telecommunications professionals employed by Leidos and potentially its subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- The 'Cost Plus Fixed Fee' (CPFF) contract type can lead to cost overruns if not closely monitored, potentially exceeding initial budget expectations.
- Lack of specific performance metrics or detailed service descriptions makes it difficult to assess the efficiency and effectiveness of the awarded services.
- The concentration of a large contract in a single geographic area (Maryland) could indicate potential single points of failure or over-reliance on regional infrastructure.
Positive Signals
- Awarded through 'Full and Open Competition,' suggesting a robust and fair bidding process that likely secured competitive pricing.
- Leidos, Inc. is a large, established government contractor with a significant track record in IT and defense services, implying a lower risk of performance failure.
- The contract duration of over three years indicates a stable and predictable need for these essential telecommunications services.
Sector Analysis
This contract falls within the Information Technology and Telecommunications sector, specifically focusing on wired network infrastructure. The North American Industry Classification System (NAICS) code 517110, 'Wired Telecommunications Carriers,' encompasses establishments primarily engaged in operating and/or developing telecommunications networks. The market for government telecommunications services is substantial, with agencies like the Department of Defense being major consumers. Comparable spending benchmarks would involve analyzing other large-scale network infrastructure contracts awarded by federal agencies, particularly within the defense sector, to gauge cost-effectiveness.
Small Business Impact
This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. The award to a large prime contractor like Leidos, Inc. suggests that the primary focus was on leveraging established large-scale capabilities. This may limit direct opportunities for small businesses to participate as prime contractors on this specific award, although they could potentially be involved as subcontractors if Leidos chooses to engage them.
Oversight & Accountability
Oversight for this contract would typically fall under the purview of the Defense Information Systems Agency (DISA) contracting officers and program managers. The Department of Defense's Inspector General (IG) would also have jurisdiction to investigate any potential fraud, waste, or abuse. Transparency is generally facilitated through contract award databases like FPDS, though detailed performance reports and audits are often internal. The CPFF structure necessitates rigorous financial oversight to ensure costs are reasonable and allocable.
Related Government Programs
- Defense Information Systems Network (DISN)
- General Services Administration (GSA) IT Schedule Contracts
- Department of Defense Enterprise IT Services Contracts
- Telecommunications Infrastructure Modernization Programs
Risk Flags
- Cost Plus Fixed Fee (CPFF) contract type requires diligent oversight to manage costs.
- Potential for technological obsolescence over the contract's duration.
- Concentration of services in a specific geographic region (Maryland).
Tags
it, defense, wired-telecommunications, delivery-order, cost-plus-fixed-fee, full-and-open-competition, leidos-inc, department-of-defense, defense-information-systems-agency, maryland, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $48.5 million to LEIDOS, INC.. IGF::CT::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 $48.5 million.
What is the period of performance?
Start: 2018-05-23. End: 2021-10-01.
What is the specific nature of the wired telecommunications services provided under this contract?
The provided data indicates the NAICS code is 517110 (Wired Telecommunications Carriers), and the contract type is 'Delivery Order' under a larger award. This suggests services related to the operation, maintenance, and potentially upgrade of wired communication networks. Given the awarding agency (Department of Defense) and the specific service area (Defense Information Systems Agency), these services are likely critical for military command and control, data transmission, and secure communications. Examples could include managing fiber optic networks, ensuring bandwidth availability, maintaining network hardware, and providing associated technical support. Without more granular details on the specific task orders issued against this contract, the precise scope remains somewhat generalized.
How does the 'Cost Plus Fixed Fee' (CPFF) pricing structure compare to other contract types for similar services?
The Cost Plus Fixed Fee (CPFF) structure is often used for complex projects where the scope of work may evolve or is not fully defined at the outset, as is common in IT and telecommunications. It allows the contractor to recover all allowable costs plus a predetermined fixed fee representing profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers more flexibility but less cost certainty for the government. While FFP contracts provide greater price predictability, they can be less suitable for rapidly changing technological environments or services requiring extensive research and development. For essential, long-term infrastructure like wired telecommunications, a mix of contract types might be employed, with CPFF potentially used for initial setup or upgrades and FFP for ongoing maintenance or standardized services. The key risk with CPFF is ensuring robust cost accounting and oversight to prevent unnecessary expenditures.
What is Leidos, Inc.'s track record with similar Department of Defense telecommunications contracts?
Leidos, Inc. is a major government contractor with extensive experience in IT, cybersecurity, and defense systems, including telecommunications infrastructure. They have a significant history of performing large-scale contracts for the Department of Defense and other federal agencies. Their portfolio often includes network modernization, secure communications, and enterprise IT services. While specific details of past performance on contracts identical to this one are not provided, Leidos's general profile suggests they possess the technical expertise, financial stability, and security clearances necessary for such work. Government contract databases and past performance reviews would offer more detailed insights into their specific successes and challenges on comparable projects.
What are the potential risks associated with a contract of this duration and value for wired telecommunications?
A contract valued at $48.5 million over approximately three years for wired telecommunications carries several potential risks. Firstly, the 'Cost Plus Fixed Fee' (CPFF) structure, while offering flexibility, can lead to cost overruns if not meticulously managed and audited. Scope creep, where the project's requirements expand beyond the initial agreement without corresponding budget adjustments, is a common risk with CPFF. Technological obsolescence is another concern; telecommunications technology evolves rapidly, and a three-year contract might see the infrastructure become outdated before its term ends, requiring potential modifications or early upgrades. Furthermore, reliance on a single large contractor, even with full and open competition, can reduce long-term market pressure on pricing and innovation. Finally, performance risks, such as service disruptions or security breaches, are inherent in any critical infrastructure contract.
How does this contract fit into the broader landscape of federal spending on telecommunications infrastructure?
This $48.5 million contract for wired telecommunications services awarded to Leidos, Inc. by the Department of Defense represents a significant, albeit specific, component of broader federal spending on IT and communication infrastructure. Federal agencies collectively spend billions annually on telecommunications, encompassing everything from basic internet services and voice lines to complex, secure networks for national security and civilian operations. Contracts like this are crucial for maintaining and upgrading the backbone of military communications. Compared to the total federal IT budget, this single contract is substantial but not exceptionally large. It highlights the ongoing need for robust, reliable, and secure wired networks to support agency missions, particularly within defense and intelligence communities. Benchmarking this against other large DISA or DoD network contracts would provide better context on its relative scale and importance.
Industry Classification
NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers
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: 700 N FREDERICK AVE, GAITHERSBURG, MD, 20879
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $48,533,010
Exercised Options: $48,533,010
Current Obligation: $48,533,010
Subaward Activity
Number of Subawards: 344
Total Subaward Amount: $142,609,846
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HC102812D0021
IDV Type: IDC
Timeline
Start Date: 2018-05-23
Current End Date: 2021-10-01
Potential End Date: 2021-10-01 00:00:00
Last Modified: 2023-05-08
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