DoD's $42.8M network optimization contract awarded to Leidos, Inc. shows fair value
Contract Overview
Contract Amount: $42,840,461 ($42.8M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2023-05-08
End Date: 2025-12-07
Contract Duration: 944 days
Daily Burn Rate: $45.4K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: FOURTH ESTATE NETWORK OPTIMIZATION DEPARTMENT OF DEFENSE NETWORK PLANNING AND DESIGN.
Place of Performance
Location: FORT GEORGE G MEADE, ANNE ARUNDEL County, MARYLAND, 20755
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $42.8 million to LEIDOS, INC. for work described as: FOURTH ESTATE NETWORK OPTIMIZATION DEPARTMENT OF DEFENSE NETWORK PLANNING AND DESIGN. Key points: 1. The contract value represents a moderate investment in critical network infrastructure. 2. Competition was robust, suggesting a healthy market for these specialized services. 3. Performance risk appears manageable given the fixed-price contract type. 4. The contract duration aligns with typical network modernization project timelines. 5. This spending falls within the broader IT services sector for the Department of Defense. 6. The awardee, Leidos, Inc., is a significant player in defense IT contracting.
Value Assessment
Rating: fair
The contract's total value of $42.8 million over its period of performance appears reasonable when benchmarked against similar large-scale network design and implementation projects within the federal government. While specific per-unit cost data is not provided, the firm-fixed-price structure suggests that the government has a clear understanding of the total cost, mitigating potential overruns. The awardee's experience in similar endeavors further supports the assessment of fair value.
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 presence of a competitive bidding process generally leads to better price discovery and potentially more innovative solutions. The specific number of bidders is not detailed, but the 'full and open' designation implies a significant level of market engagement.
Taxpayer Impact: A competitive award process ensures that taxpayer dollars are used efficiently by driving down costs and encouraging high-quality service delivery through market forces.
Public Impact
The Department of Defense benefits from enhanced network capabilities, crucial for operational effectiveness. Services delivered include network planning and design, supporting secure and efficient communication. The geographic impact is primarily within Department of Defense facilities, supporting national security. Workforce implications include the need for skilled IT professionals to implement and manage the optimized network.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for scope creep if initial network requirements are not precisely defined.
- Dependence on Leidos, Inc. for successful implementation and potential vendor lock-in.
- Cybersecurity risks associated with network modernization projects require continuous vigilance.
Positive Signals
- Awarded under full and open competition, suggesting a competitive pricing environment.
- Firm-fixed-price contract type provides cost certainty for the government.
- Leidos, Inc. has a strong track record in large-scale federal IT projects.
- The contract duration is sufficient for thorough planning and execution.
- Focus on network optimization directly supports critical defense missions.
Sector Analysis
The federal IT services market is vast, with significant spending allocated to network infrastructure, cybersecurity, and modernization. This contract for network planning and design by the Department of Defense fits within the broader category of IT services, specifically focusing on enhancing the backbone of military communications. Comparable spending benchmarks in this sector often involve multi-million dollar contracts for system integration, cloud migration, and network upgrades, reflecting the complexity and criticality of these systems.
Small Business Impact
This contract was awarded under full and open competition and does not indicate any specific small business set-aside. While Leidos, Inc. is a large business, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will depend on Leidos's strategy and the specific requirements of the network optimization project, potentially impacting the small business IT ecosystem.
Oversight & Accountability
Oversight for this contract will likely be managed by the Department of Defense's contracting officers and program managers, ensuring adherence to the statement of work and delivery schedules. Accountability measures are embedded within the firm-fixed-price contract terms, linking payment to performance. Transparency is facilitated through contract award databases, though detailed performance metrics may not be publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- DoD Network Modernization Programs
- Defense Information Systems Agency (DISA) IT Services
- Federal Civilian IT Infrastructure Contracts
- Large-Scale Network Design and Implementation Projects
Risk Flags
- Potential for cybersecurity risks during network transition.
- Dependence on contractor for successful implementation.
- Need for clear performance metrics to ensure value.
Tags
it-services, department-of-defense, network-design, network-planning, full-and-open-competition, firm-fixed-price, large-contract, defense-information-systems-agency, maryland, leidos-inc
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $42.8 million to LEIDOS, INC.. FOURTH ESTATE NETWORK OPTIMIZATION DEPARTMENT OF DEFENSE NETWORK PLANNING AND DESIGN.
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 $42.8 million.
What is the period of performance?
Start: 2023-05-08. End: 2025-12-07.
What is Leidos, Inc.'s track record with similar large-scale network optimization contracts for the Department of Defense?
Leidos, Inc. has a substantial history of performing complex IT services for the Department of Defense, including network design, implementation, and sustainment. They have been involved in numerous large-scale projects aimed at modernizing military networks, enhancing cybersecurity, and improving communication capabilities across various branches. Their experience often includes managing firm-fixed-price contracts with significant dollar values, demonstrating an ability to handle the scope and complexity typical of defense network initiatives. Publicly available contract databases and agency performance reports often highlight Leidos's role in delivering critical infrastructure upgrades, though specific details on past network optimization projects may vary in public disclosure.
How does the $42.8 million contract value compare to other federal network planning and design contracts?
The $42.8 million contract value for network planning and design by the Department of Defense is within the typical range for large-scale federal IT infrastructure projects. Federal agencies frequently award contracts in the tens to hundreds of millions of dollars for comprehensive network modernization, system integration, and cybersecurity enhancements. When compared to similar contracts awarded by agencies like the General Services Administration (GSA) or other defense components for network services, this award appears to be a moderate-sized investment. The specific scope, duration, and complexity of the required services would be the primary drivers for cost variations across different contracts.
What are the primary risks associated with this network optimization contract, and how are they being mitigated?
Key risks for this network optimization contract include potential technical challenges during implementation, cybersecurity vulnerabilities introduced during the upgrade process, and the possibility of schedule delays or cost overruns if not managed effectively. Mitigation strategies are likely embedded within the contract's structure and oversight. The firm-fixed-price nature of the contract shifts some financial risk to the contractor, Leidos, Inc. Robust cybersecurity protocols and testing phases are critical to address vulnerabilities. The Department of Defense's program management and contracting officers will provide oversight, monitoring progress against milestones and ensuring adherence to the statement of work. Clear communication channels and defined change management processes are also essential for mitigating risks.
How effective is the 'full and open competition' approach in ensuring value for money for this type of IT service?
The 'full and open competition' approach is generally considered highly effective in ensuring value for money for complex IT services like network optimization. By allowing all responsible sources to submit bids, it fosters a competitive environment that drives down prices and encourages innovation. This broad competition increases the likelihood that the government will receive the best combination of technical solution and cost. It also provides a wider pool of potential contractors, reducing the risk of relying on a single vendor and potentially leading to better-quality services. The transparency inherent in this process also aids in benchmarking and validating the chosen solution against market offerings.
What is the historical spending trend for network planning and design services within the Department of Defense?
Historical spending on network planning and design services within the Department of Defense has consistently been significant, reflecting the critical nature of secure and efficient communication for military operations. Over the past decade, spending in this area has seen fluctuations driven by evolving technological landscapes, emerging threats, and strategic modernization initiatives. While specific figures vary annually, the DoD represents one of the largest federal spenders on IT infrastructure, including network upgrades, cybersecurity enhancements, and the design of resilient communication systems. This consistent investment underscores the ongoing need to maintain and advance the technological capabilities of the defense network.
What are the potential implications of this contract on the broader defense IT market and its participants?
This contract, awarded to a major defense contractor like Leidos, Inc., reinforces the dominance of large system integrators in the high-value defense IT market. It signals continued investment in core network infrastructure modernization by the DoD. For smaller businesses, the primary implication lies in potential subcontracting opportunities, provided they possess specialized skills in areas like cybersecurity, specific hardware/software integration, or niche network services. The competitive nature of the award suggests that established players with proven capabilities are favored, potentially creating barriers to entry for newer or smaller firms unless they can secure subcontracts or demonstrate unique value propositions.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: HC104720R0014
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 1750 PRESIDENTS ST, 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: $75,758,605
Exercised Options: $43,332,171
Current Obligation: $42,840,461
Actual Outlays: $19,696,310
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HC104722D0002
IDV Type: IDC
Timeline
Start Date: 2023-05-08
Current End Date: 2025-12-07
Potential End Date: 2027-12-07 00:00:00
Last Modified: 2025-09-22
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