Leidos secures $561.8M for DODIN/DISN infrastructure maintenance, a critical defense network
Contract Overview
Contract Amount: $561,840,855 ($561.8M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2020-01-01
End Date: 2025-12-31
Contract Duration: 2,191 days
Daily Burn Rate: $256.4K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIXED PRICE INCENTIVE
Sector: IT
Official Description: MAINTENANCE AND REPAIR 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 $561.8 million to LEIDOS, INC. for work described as: MAINTENANCE AND REPAIR OF THE DODIN/DISN INFRASTRUCTURE Key points: 1. Contract value represents significant investment in maintaining essential military communication infrastructure. 2. Full and open competition suggests a competitive bidding process, potentially leading to better pricing. 3. Fixed Price Incentive contract type introduces performance-based incentives, aligning contractor and government goals. 4. Long duration (5 years) indicates a need for sustained, reliable support for a vital network. 5. Focus on computer facilities management highlights the importance of IT infrastructure for defense operations. 6. The contract's scale suggests a substantial role for Leidos within the defense IT services sector.
Value Assessment
Rating: good
The contract value of over $561 million for five years for maintaining the DODIN/DISN infrastructure appears reasonable given the critical nature and scale of the network. Benchmarking against similar large-scale IT infrastructure support contracts for defense agencies suggests this pricing is within expected ranges. The Fixed Price Incentive (FPI) structure allows for cost savings if performance targets are met or exceeded, indicating a focus on value for money. However, a detailed cost breakdown and comparison of specific service rates would be needed for a more precise value assessment.
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 bids. While the number of bidders is not specified, this procurement method generally fosters a competitive environment, which is expected to drive down costs and improve the quality of services offered. The agency likely sought proposals that demonstrated technical capability, past performance, and competitive pricing to ensure the best value for the government.
Taxpayer Impact: Full and open competition is beneficial for taxpayers as it maximizes the potential for cost savings through a robust bidding process. It ensures that the government is not limited to a single provider, thereby encouraging market-driven pricing and innovation.
Public Impact
The primary beneficiaries are the Department of Defense and its various branches, ensuring reliable communication and data services. Services delivered include the maintenance and repair of the Defense Information Systems Network (DISN) and Department of Defense Information Network (DODIN) infrastructure. The geographic impact is nationwide and potentially global, supporting military operations wherever they occur. Workforce implications include employment opportunities for IT specialists, network engineers, and maintenance personnel, primarily with the contractor, Leidos.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if performance incentives are not met or if unforeseen technical challenges arise.
- Reliance on a single large contractor for a critical national security network could pose a risk if contractor performance degrades significantly.
- The long contract duration might limit opportunities for newer, potentially more innovative solutions from smaller firms if not managed carefully.
Positive Signals
- Awarded through full and open competition, suggesting a competitive process that likely secured favorable terms.
- The Fixed Price Incentive (FPI) contract type incentivizes contractor performance and cost control.
- Leidos is a large, established defense contractor with significant experience in IT services, indicating a lower risk of execution failure.
- The contract supports a critical national security network, highlighting its strategic importance and likely robust oversight.
Sector Analysis
This contract falls within the IT services sector, specifically focusing on network infrastructure management and maintenance. The market for defense IT services is substantial, driven by the government's continuous need for secure and reliable communication systems. Leidos, as a major defense contractor, is well-positioned in this space. Comparable spending benchmarks for large-scale network operations and maintenance contracts within the federal government often run into hundreds of millions of dollars annually, reflecting the complexity and criticality of these systems.
Small Business Impact
This contract does not appear to have specific small business set-aside provisions, as indicated by 'sb': false. The prime contractor, Leidos, is a large business. While there is no direct set-aside, large prime contractors are often required to meet subcontracting goals for small businesses. The extent to which Leidos will utilize small businesses for subcontracting will determine the impact on the small business ecosystem. Without specific subcontracting plans, it's difficult to assess the precise benefit to small businesses.
Oversight & Accountability
Oversight for this contract is likely managed by the Defense Information Systems Agency (DISA), a component of the Department of Defense. Mechanisms would include regular performance reviews, milestone tracking, and financial audits, especially given the Fixed Price Incentive structure. Transparency is generally high for major defense contracts, with reporting requirements to Congress and public contract databases. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse.
Related Government Programs
- DODIN/DISN Network Operations
- Defense IT Infrastructure Support
- Network Maintenance and Repair Services
- Federal IT Services Contracts
- Department of Defense Communications Networks
Risk Flags
- Cybersecurity Risk
- Network Availability
- Contractor Performance
- Technological Obsolescence
- Cost Overruns
Tags
it-services, network-maintenance, defense, department-of-defense, disa, full-and-open-competition, fixed-price-incentive, large-contract, mission-critical, maryland, dod
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $561.8 million to LEIDOS, INC.. MAINTENANCE AND REPAIR 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 $561.8 million.
What is the period of performance?
Start: 2020-01-01. End: 2025-12-31.
What is Leidos's track record with similar large-scale IT infrastructure contracts for the Department of Defense?
Leidos has a substantial track record with the Department of Defense, frequently securing large contracts for IT services, including network operations, cybersecurity, and systems integration. They are a prime contractor on numerous other significant defense IT programs. Their experience includes managing complex, mission-critical networks similar to the DODIN/DISN. Past performance evaluations on these contracts would be a key factor in their selection for this award. While specific details of past performance are often proprietary, Leidos's consistent presence as a major awardee in this space suggests a generally positive history, though like any large contractor, they may have faced challenges or criticisms on specific projects that would be detailed in performance reviews.
How does the pricing structure of this Fixed Price Incentive (FPI) contract compare to other IT maintenance contracts?
The Fixed Price Incentive (FPI) contract type is designed to share risks and rewards between the government and the contractor. In an FPI contract, the final price is determined by the contractor's performance against target cost and target profit goals. If the contractor performs under the target cost, both parties share in the savings. If costs exceed the target, the contractor bears a larger portion of the overrun up to a ceiling price. This structure is often used for complex projects where cost certainty is desired but some flexibility is needed. Compared to Firm Fixed Price (FFP) contracts, FPI offers more flexibility but requires more oversight to manage the incentive structure. Compared to Cost-Plus contracts, FPI provides greater cost control for the government. The specific 'incentive' aspect here would involve targets related to network uptime, response times, or repair efficiency, aiming to drive better performance beyond just cost management.
What are the primary risks associated with maintaining the DODIN/DISN infrastructure under this contract?
The primary risks associated with maintaining the DODIN/DISN infrastructure involve cybersecurity threats, the aging nature of some network components requiring constant upgrades, and the potential for unforeseen technical failures in a highly complex, interconnected system. Operational risks include ensuring continuous availability and minimal downtime, which is critical for military operations. Contractor performance risk is also present; any degradation in Leidos's service could have significant national security implications. Furthermore, the sheer scale and criticality of the network mean that any disruption, whether from external attack or internal failure, could have cascading effects. The contract's long duration also introduces risks related to technological obsolescence and the need for continuous adaptation to evolving threats and requirements.
How effective is the full and open competition process in ensuring value for money for this type of defense IT contract?
Full and open competition is generally considered the most effective method for ensuring value for money in defense IT contracts, especially for services like network maintenance where multiple qualified vendors exist. It allows the government to solicit bids from a wide range of potential contractors, fostering a competitive environment that drives down prices and encourages innovation. By requiring proposals that detail technical solutions, past performance, and cost, the agency can evaluate offers holistically to select the best value. While it requires more upfront effort in solicitation and evaluation, the potential for significant cost savings and access to a broader range of capabilities typically outweighs these initial investments. The success of this method hinges on clear requirements and a robust evaluation process.
What are the historical spending patterns for DODIN/DISN infrastructure maintenance, and how does this contract compare?
Historical spending on DODIN/DISN infrastructure maintenance has consistently been in the hundreds of millions of dollars annually, reflecting the vast scale and critical importance of these networks to national security. These systems require continuous investment in hardware, software, personnel, and cybersecurity measures to remain operational and secure. This $561.8 million contract, spanning five years, averages over $112 million per year. This figure aligns with historical spending trends for major network sustainment programs within the Department of Defense. Fluctuations in annual spending are common, influenced by modernization efforts, specific upgrade projects, and evolving threat landscapes. This contract represents a significant, but not unprecedented, level of investment for maintaining this vital 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: $561,840,855
Exercised Options: $561,840,855
Current Obligation: $561,840,855
Subaward Activity
Number of Subawards: 566
Total Subaward Amount: $478,168,776
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: 2020-01-01
Current End Date: 2025-12-31
Potential End Date: 2025-12-31 00:00:00
Last Modified: 2025-12-11
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