Leidos Inc. awarded $67.4M for DoD's CESO Operations Support, a 4-year contract for IT services
Contract Overview
Contract Amount: $67,428,507 ($67.4M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2022-09-19
End Date: 2026-01-18
Contract Duration: 1,217 days
Daily Burn Rate: $55.4K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: SAP IT - CESO OPERATIONS SUPPORT
Place of Performance
Location: FORT GEORGE G MEADE, ANNE ARUNDEL County, MARYLAND, 20755
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $67.4 million to LEIDOS, INC. for work described as: SAP IT - CESO OPERATIONS SUPPORT Key points: 1. Contract value represents a significant investment in maintaining critical IT infrastructure for the Department of Defense. 2. The full and open competition suggests a robust market for these specialized IT services. 3. Performance period extends over three years, indicating a need for sustained support. 4. The contract type, Cost Plus Fixed Fee, allows for flexibility but requires careful oversight of costs. 5. This award falls within the Computer Facilities Management Services NAICS code, a common area for IT support contracts. 6. The geographic location in Maryland suggests a concentration of defense IT operations in the region.
Value Assessment
Rating: good
The contract value of $67.4 million over approximately four years for IT operations support appears reasonable given the scope of services for a major defense agency. Benchmarking against similar large-scale IT support contracts within the Department of Defense would provide a more precise value-for-money assessment. The Cost Plus Fixed Fee (CPFF) structure necessitates diligent cost tracking to ensure efficiency and prevent cost overruns, which is standard for complex IT projects.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The specific number of bidders is not provided, but this procurement method generally fosters competitive pricing and encourages a wider range of solutions. The agency likely sought the best value proposition through a structured evaluation process.
Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down costs through market forces and ensures the government receives competitive pricing for essential services.
Public Impact
The Department of Defense benefits through the reliable operation and maintenance of its critical IT systems. Services delivered include computer facilities management, ensuring the smooth functioning of essential digital infrastructure. The primary geographic impact is within Maryland, likely supporting defense installations and personnel in the region. This contract supports a workforce skilled in IT operations, potentially including system administrators, network engineers, and support technicians.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contracts require robust oversight to manage potential cost escalations.
- The duration of the contract (over 3 years) necessitates ongoing performance monitoring to ensure sustained quality.
- Lack of specific performance metrics in the provided data makes it difficult to assess efficiency beyond cost.
Positive Signals
- Awarded through full and open competition, suggesting a competitive process that likely yielded favorable terms.
- The contract is with a well-established contractor, Leidos, Inc., known for its extensive experience in government IT services.
- The contract supports critical defense IT operations, aligning with national security objectives.
Sector Analysis
This contract falls within the IT services sector, specifically Computer Facilities Management Services. The federal IT services market is substantial, with agencies like the Department of Defense being major spenders. Contracts of this nature are crucial for maintaining the operational readiness of defense networks and systems. Comparable spending benchmarks would involve analyzing other large-scale IT operations and maintenance contracts awarded by federal agencies.
Small Business Impact
The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large contract awarded to Leidos, Inc., it is unlikely that significant subcontracting opportunities for small businesses will be mandated unless specified within the contract's terms. The focus appears to be on large-scale prime contractor capabilities rather than fostering small business participation through set-asides.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Defense and the Defense Information Systems Agency (DISA). As a Cost Plus Fixed Fee contract, rigorous financial oversight is expected to monitor expenditures against the fixed fee. Accountability measures would be tied to performance metrics and delivery schedules outlined in the contract. Transparency is generally maintained through contract award databases, though specific operational details may be sensitive.
Related Government Programs
- Defense Information Systems Agency (DISA) IT Support Contracts
- Department of Defense Computer Operations and Maintenance
- Federal IT Infrastructure Management
- Large-Scale IT Service Contracts
Risk Flags
- Cost Overrun Risk (CPFF Contract)
- Performance Monitoring Complexity
- Dependence on Contractor Expertise
Tags
it-services, computer-facilities-management, department-of-defense, defense-information-systems-agency, delivery-order, full-and-open-competition, cost-plus-fixed-fee, leidos-inc, maryland, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $67.4 million to LEIDOS, INC.. SAP IT - CESO OPERATIONS SUPPORT
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 $67.4 million.
What is the period of performance?
Start: 2022-09-19. End: 2026-01-18.
What is Leidos, Inc.'s track record with similar IT operations and maintenance contracts for the Department of Defense?
Leidos, Inc. has a substantial history of performing IT operations and maintenance services for the Department of Defense and other federal agencies. They are a major government contractor with extensive experience in areas such as network management, cybersecurity, enterprise IT, and systems integration. Analyzing their past performance on similar large-scale contracts, including any past performance reviews or award fees, would provide insight into their capability to successfully execute this CESO Operations Support contract. Their extensive portfolio suggests a strong capacity to manage complex IT environments, but specific contract performance data would be needed for a definitive assessment.
How does the awarded amount of $67.4 million compare to the duration and scope of services for this contract?
The $67.4 million award over approximately 1217 days (roughly 3.3 years) translates to an average annual value of approximately $20.4 million. This figure needs to be evaluated against the specific scope of Computer Facilities Management Services required by the Defense Information Systems Agency (DISA) for the CESO Operations Support. If the contract involves managing extensive data centers, complex network infrastructure, significant user support, and advanced security protocols, the annual value may be competitive. However, without a detailed breakdown of the services and deliverables, a precise value-for-money assessment is challenging. Benchmarking against other large federal IT operations contracts of similar scope and duration would be necessary for a more definitive comparison.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for IT operations support?
The primary risk with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns. While the contractor is incentivized to control costs to protect their fixed fee, the government bears the risk of all allowable costs. This structure requires robust government oversight to ensure that all costs incurred are reasonable, allocable, and necessary for contract performance. If oversight is insufficient, the contractor may not be as motivated to seek the most cost-effective solutions, potentially leading to higher overall expenditures than anticipated. Another risk is ensuring the contractor's definition of 'completion' aligns with the government's expectations, especially in long-term IT operations where requirements can evolve.
How effective is full and open competition in ensuring competitive pricing for complex IT services like CESO Operations Support?
Full and open competition is generally considered the most effective method for ensuring competitive pricing for complex IT services. By allowing all responsible sources to submit offers, it maximizes the pool of potential bidders, thereby increasing the likelihood of receiving competitive bids. This process encourages contractors to offer their best pricing and technical solutions to win the contract. For services like CESO Operations Support, where multiple companies possess the necessary expertise, this approach helps the government secure services at a fair and reasonable price. The effectiveness is further enhanced by a well-defined Statement of Work and a clear evaluation criteria that prioritizes value.
What is the historical spending trend for Computer Facilities Management Services within the Department of Defense?
The Department of Defense is a consistently large spender on Computer Facilities Management Services, reflecting the critical role of IT infrastructure in military operations. Historical spending in this category has generally trended upwards over the years, driven by increasing reliance on digital systems, modernization efforts, and the complexity of maintaining secure and resilient networks. While specific annual figures fluctuate based on budget allocations and specific program needs, the overall demand for these services remains high. Analyzing DISA's specific budget allocations for IT operations and maintenance over the past several years would provide a more granular view of their spending patterns within this domain.
What are the potential implications of this contract award on the IT services market in Maryland?
This contract award to Leidos, Inc., with its significant value and focus on IT operations support, could have several implications for the IT services market in Maryland. It reinforces Maryland's position as a hub for federal IT contracting, particularly within the defense sector. The contract may lead to job creation or expansion for Leidos and its potential subcontractors in the region, requiring skilled IT professionals. Furthermore, it signals continued government investment in IT infrastructure in the area, potentially attracting other IT service providers and fostering a competitive environment for talent and business opportunities within the state's robust defense and technology ecosystem.
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 › IT AND TELECOM - NETWORK
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: $98,369,973
Exercised Options: $67,428,507
Current Obligation: $67,428,507
Subaward Activity
Number of Subawards: 78
Total Subaward Amount: $181,495,401
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: 2022-09-19
Current End Date: 2026-01-18
Potential End Date: 2026-09-18 00:00:00
Last Modified: 2025-12-19
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