DoD's $776M DISN Infrastructure Contract Awarded to Leidos Faces Scrutiny Over Value and Competition
Contract Overview
Contract Amount: $775,976,292 ($776.0M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2020-11-19
End Date: 2025-11-18
Contract Duration: 1,825 days
Daily Burn Rate: $425.2K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIXED PRICE INCENTIVE
Sector: IT
Official Description: OPERATION AND SUSTAINMENT OF THE DODIN/DISN INFRASTRUCTURE
Place of Performance
Location: FORT GEORGE G MEADE, ANNE ARUNDEL County, MARYLAND, 20755
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $776.0 million to LEIDOS, INC. for work described as: OPERATION AND SUSTAINMENT OF THE DODIN/DISN INFRASTRUCTURE Key points: 1. High contract value of $776M for IT infrastructure operations and sustainment. 2. Leidos, Inc. is the sole awardee, raising questions about competition. 3. Fixed Price Incentive contract type suggests potential for cost overruns. 4. The contract falls under Computer Facilities Management Services, a critical IT sector.
Value Assessment
Rating: questionable
The $776M contract value for IT infrastructure is substantial. Benchmarking against similar large-scale IT operations and sustainment contracts is crucial to assess if the pricing is competitive and reflects fair market value, especially given the contract type.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Although listed as 'full and open competition,' the award to a single entity, Leidos, Inc., warrants further investigation into the solicitation and evaluation process to ensure genuine competition was fostered and the best value was achieved.
Taxpayer Impact: The significant contract value necessitates robust oversight to ensure taxpayer funds are used efficiently and effectively for essential defense IT infrastructure.
Public Impact
Impacts the operational readiness and security of the Department of Defense's global information network. Ensures continuity of critical communication and data services for military personnel worldwide. Potential for cost savings or overruns directly affects the defense budget and taxpayer burden.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of clear justification for single awardee despite 'full and open' status.
- Fixed Price Incentive contract type can lead to cost escalation.
- Limited transparency on performance metrics and potential for cost overruns.
Positive Signals
- Supports critical defense communication infrastructure.
- Long-term contract provides stability for service delivery.
- Focus on operations and sustainment ensures ongoing functionality.
Sector Analysis
This contract is within the IT sector, specifically focusing on Computer Facilities Management Services for the DoD's Defense Information Infrastructure. Spending in this area is critical for national security, with benchmarks often driven by the complexity and scale of the network managed.
Small Business Impact
The data indicates this contract was not awarded to small businesses. Analysis should explore opportunities for small business subcontracting within this large prime contract to foster broader participation.
Oversight & Accountability
The 'full and open' competition designation requires scrutiny to ensure it truly facilitated broad market participation and fair pricing. Robust oversight is needed to monitor performance and costs under the Fixed Price Incentive structure.
Related Government Programs
- Computer Facilities Management Services
- Department of Defense Contracting
- Defense Information Systems Agency Programs
Risk Flags
- Potential for uncompetitive pricing due to single award.
- Risk of cost overruns with Fixed Price Incentive contract.
- Lack of small business participation.
- Complexity of managing global defense IT infrastructure.
- Dependence on a single contractor for critical services.
Tags
computer-facilities-management-services, department-of-defense, md, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $776.0 million to LEIDOS, INC.. OPERATION AND SUSTAINMENT OF THE DODIN/DISN INFRASTRUCTURE
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 $776.0 million.
What is the period of performance?
Start: 2020-11-19. End: 2025-11-18.
What specific factors led to a single awardee under a 'full and open' competition for this substantial IT infrastructure contract?
Further analysis is required to understand the specific requirements and evaluation criteria used during the solicitation process. It's possible that only one offeror met all stringent technical qualifications, or that the evaluation weighted certain factors heavily, leading to a single best-value determination. Without detailed documentation, it remains unclear if the competition was truly maximized.
How does the Fixed Price Incentive (FPI) contract structure mitigate risks of cost overruns for the $776M DISN infrastructure sustainment?
The FPI structure aims to incentivize both the contractor and the government to control costs by sharing savings or overruns beyond target prices. However, the effectiveness hinges on realistic initial cost targets and robust government oversight to manage performance and prevent scope creep. The incentive mechanism needs careful monitoring to ensure it doesn't inadvertently encourage higher spending.
What are the key performance indicators (KPIs) being tracked to ensure the effectiveness and value for money of Leidos's services for the DODIN/DISN infrastructure?
Effective oversight would involve tracking KPIs related to network uptime, latency, security incident response times, system availability, and user satisfaction. Regular performance reviews against these metrics are essential to validate the contract's value and ensure the contractor is meeting or exceeding expectations for this critical defense infrastructure.
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
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: HC102818R0024
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 11951 FREEDOM DR FL 15, 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: $784,124,245
Exercised Options: $776,090,460
Current Obligation: $775,976,292
Subaward Activity
Number of Subawards: 351
Total Subaward Amount: $133,433,744
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: HC102820D0001
IDV Type: IDC
Timeline
Start Date: 2020-11-19
Current End Date: 2025-11-18
Potential End Date: 2025-11-18 00:00:00
Last Modified: 2025-11-05
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