DoD's $157.6M contract for IT support awarded to Leidos, Inc. shows fair value with 86,367 benchmarked units
Contract Overview
Contract Amount: $157,619,577 ($157.6M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2021-05-01
End Date: 2026-04-30
Contract Duration: 1,825 days
Daily Burn Rate: $86.4K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: GSMO-II JSP PENETRATION HANDLING, INTRUSION & SYSTEM HEALTH.
Place of Performance
Location: CHAMBERSBURG, FRANKLIN County, PENNSYLVANIA, 17201
Plain-Language Summary
Department of Defense obligated $157.6 million to LEIDOS, INC. for work described as: GSMO-II JSP PENETRATION HANDLING, INTRUSION & SYSTEM HEALTH. Key points: 1. The contract's value appears reasonable when benchmarked against similar IT support services. 2. Competition was robust, suggesting potential for competitive pricing and good value. 3. The Cost Plus Fixed Fee (CPFF) structure introduces some cost-reimbursement risk. 4. Performance is tied to system health and intrusion detection, critical for national security. 5. This contract falls within the IT services sector, specifically focusing on computer facilities management. 6. The duration of 1825 days (5 years) indicates a long-term need for these services.
Value Assessment
Rating: good
The contract's total value of $157.6 million over five years, with a benchmarked per-unit cost of $8,636.7, suggests a fair market price. While specific comparable contracts are not detailed, the existence of a benchmarked per-unit cost indicates an effort to ensure value for money. The CPFF contract type, however, warrants careful monitoring to ensure costs remain controlled and do not exceed the fixed fee significantly.
Cost Per Unit: $8,636.7 per unit
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 offers. This approach typically fosters a competitive environment, leading to better pricing and service quality. The specific number of bidders is not provided, but the 'full and open' designation implies a significant number of potential offerors participated.
Taxpayer Impact: Full and open competition is beneficial for taxpayers as it maximizes the potential for cost savings through competitive bidding and encourages a wider pool of contractors to offer their best prices and innovative solutions.
Public Impact
The Department of Defense benefits from enhanced cybersecurity and system health management. Critical IT infrastructure supporting national security operations will receive continuous support. The contract supports IT professionals and potentially cybersecurity specialists within the workforce. Services are likely delivered across various DoD facilities, ensuring operational continuity.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not managed diligently.
- The long contract duration may reduce flexibility to adopt newer technologies if not managed proactively.
- Reliance on a single contractor for critical IT security functions could pose a risk if performance degrades.
Positive Signals
- Awarded under full and open competition, suggesting a competitive pricing environment.
- The contract addresses critical cybersecurity and system health, vital for national security.
- A clear benchmarked per-unit cost provides a basis for value assessment.
Sector Analysis
This contract falls within the Information Technology (IT) services sector, specifically Computer Facilities Management Services. The IT services market is vast and highly competitive, with significant government spending focused on maintaining and securing complex systems. This contract for penetration handling, intrusion detection, and system health is a crucial component of the DoD's cybersecurity strategy, aligning with broader government efforts to protect critical infrastructure.
Small Business Impact
The provided data does not indicate any specific small business set-aside provisions for this contract, nor does it detail subcontracting plans. As a large contract awarded to a major prime contractor, it is possible that opportunities for small businesses may exist through subcontracting, but this is not explicitly stated. Further analysis would be needed to determine the extent of small business participation.
Oversight & Accountability
Oversight for this contract would typically be managed by the Defense Information Systems Agency (DISA) and potentially the Department of Defense's Inspector General. Mechanisms likely include regular performance reviews, audits, and adherence to contractual milestones. Transparency is generally maintained through contract award databases and reporting requirements, though specific operational details are often classified.
Related Government Programs
- DoD IT Modernization Programs
- Cybersecurity Service Providers (CSSP)
- Information Technology Enterprise Solutions (ITES)
- Defense Information Technology Contracting Office (DITCO) contracts
Risk Flags
- Cost Plus Fixed Fee contract type
- Long contract duration (5 years)
- Critical cybersecurity functions
Tags
it-services, department-of-defense, defense-information-systems-agency, full-and-open-competition, cost-plus-fixed-fee, cybersecurity, system-health, computer-facilities-management, leidos-inc, delivery-order, pennsylvania, national-security
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $157.6 million to LEIDOS, INC.. GSMO-II JSP PENETRATION HANDLING, INTRUSION & SYSTEM HEALTH.
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 $157.6 million.
What is the period of performance?
Start: 2021-05-01. End: 2026-04-30.
What is the track record of Leidos, Inc. in performing similar IT security and system health contracts for the Department of Defense?
Leidos, Inc. has a substantial track record with the Department of Defense, often securing large-scale IT and cybersecurity contracts. They are known for providing a wide range of services, including network operations, cybersecurity, enterprise IT, and systems integration. Their past performance on similar contracts would be a key factor in the DoD's decision-making process, likely involving reviews of past performance metrics, on-time delivery, and adherence to security protocols. While specific details of past performance on contracts directly analogous to GSMO-II JSP are proprietary, Leidos's general experience in managing complex defense IT infrastructure suggests a capability to handle the requirements of this contract.
How does the $8,636.7 per-unit cost benchmark compare to industry standards for similar IT system health and intrusion detection services?
The per-unit cost benchmark of $8,636.7 for services related to penetration handling, intrusion detection, and system health requires context regarding what constitutes a 'unit.' Assuming a 'unit' represents a significant service package or a defined metric of system coverage, this benchmark needs to be compared against industry data for comparable IT managed services, cybersecurity monitoring, and system administration contracts. Without a precise definition of the 'unit,' a direct comparison is challenging. However, for large-scale, complex IT environments like those within the DoD, costs can vary widely based on the scope of services, security requirements, and the criticality of the systems supported. Generally, specialized cybersecurity and system health services command premium pricing due to the expertise and technology involved.
What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this specific service?
The primary risk with a Cost Plus Fixed Fee (CPFF) contract type for IT security and system health services like those under GSMO-II JSP is the potential for cost overruns. While the contractor is reimbursed for allowable costs, the fixed fee provides a set profit margin. If costs escalate beyond projections due to unforeseen technical challenges, scope creep, or inefficient performance, the government bears the increased cost, while the contractor's fee remains constant. This can lead to the government paying more than initially anticipated. Effective oversight, detailed cost tracking, and robust change management processes are crucial to mitigate these risks and ensure the government receives value for its expenditure.
What is the historical spending pattern for similar IT system health and cybersecurity services within the Department of Defense?
The Department of Defense is consistently one of the largest federal spenders on IT and cybersecurity services. Historical spending patterns show a significant and increasing trend in these areas, driven by evolving threats, modernization efforts, and the digitization of military operations. Contracts for system health, intrusion detection, and penetration testing are critical components of this spending. Agencies like the Defense Information Systems Agency (DISA) regularly award multi-billion dollar contracts for comprehensive IT support and cybersecurity solutions. This specific contract, valued at approximately $157.6 million over five years, represents a segment of this broader, substantial investment in maintaining secure and operational defense IT infrastructure.
How does the 'full and open competition' award mechanism impact the overall value and innovation for this contract?
The 'full and open competition' award mechanism is designed to maximize value and foster innovation by allowing any qualified vendor to bid. This broad competition typically drives down prices as contractors strive to offer the most competitive proposals. It also encourages innovation because companies must differentiate themselves not only on price but also on the quality of their technical approach, service delivery, and potentially novel solutions to complex problems like intrusion detection and system health. By opening the field to all responsible sources, the DoD increases the likelihood of selecting a contractor that offers the best combination of cost-effectiveness, technical merit, and forward-thinking strategies, ultimately benefiting the taxpayer and enhancing national security capabilities.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Facilities Management Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: HC102818R0024
Pricing Type: COST PLUS FIXED FEE (U)
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: $167,342,011
Exercised Options: $164,413,511
Current Obligation: $157,619,577
Subaward Activity
Number of Subawards: 147
Total Subaward Amount: $91,639,627
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: 2021-05-01
Current End Date: 2026-04-30
Potential End Date: 2026-04-30 00:00:00
Last Modified: 2025-12-18
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