DODNET Operations and Sustainment contract awarded to Leidos, Inc. for $79.5M over 711 days
Contract Overview
Contract Amount: $79,508,950 ($79.5M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2024-06-19
End Date: 2026-05-31
Contract Duration: 711 days
Daily Burn Rate: $111.8K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: DEPARTMENT OF DEFENSE (DOD) NETWORK (DODNET) OPERATIONS AND SUSTAINMENT (DOS)
Place of Performance
Location: FORT GEORGE G MEADE, ANNE ARUNDEL County, MARYLAND, 20755
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $79.5 million to LEIDOS, INC. for work described as: DEPARTMENT OF DEFENSE (DOD) NETWORK (DODNET) OPERATIONS AND SUSTAINMENT (DOS) Key points: 1. Contract value represents a significant investment in maintaining critical defense network infrastructure. 2. Leidos, Inc. has a substantial presence in government IT services, suggesting established capabilities. 3. The firm-fixed-price contract type aims to control costs, but requires careful scope management. 4. Performance period of nearly two years allows for sustained operational support. 5. This contract falls within the broader category of IT services for defense agencies. 6. The award amount suggests a mid-sized contract within the large defense IT services market.
Value Assessment
Rating: good
The contract value of $79.5 million for nearly two years of network operations and sustainment appears reasonable given the critical nature of DODNET. Benchmarking against similar large-scale IT sustainment contracts for defense agencies suggests this pricing is within expected ranges. The firm-fixed-price structure provides cost certainty for the government, assuming the scope of work is well-defined and managed effectively to prevent costly overruns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. This competitive process is designed to foster price discovery and ensure the government receives the best value. The specific number of bidders is not provided, but the 'full and open' designation suggests a robust competitive environment.
Taxpayer Impact: Full and open competition generally leads to more favorable pricing for taxpayers by encouraging multiple companies to offer their best terms and pricing to win the contract.
Public Impact
The primary beneficiaries are the Department of Defense personnel who rely on the secure and stable operation of the DODNET. Services delivered include the sustainment and operation of critical network infrastructure, ensuring communication and data flow. The geographic impact is nationwide, supporting military operations across various bases and commands. Workforce implications include the potential for Leidos, Inc. to utilize its existing IT specialists and potentially create new roles to support this contract.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for scope creep in a complex network sustainment environment.
- Reliance on a single contractor for critical network operations could pose a risk if performance falters.
- Ensuring adequate cybersecurity measures are maintained throughout the contract lifecycle is paramount.
Positive Signals
- Firm-fixed-price contract provides cost predictability.
- Full and open competition suggests a competitive award process.
- Leidos, Inc. is an established government contractor with significant IT experience.
Sector Analysis
This contract operates within the Defense Information Technology Services sector, a substantial segment of the federal IT market. The market is characterized by large, established prime contractors and a complex ecosystem of subcontractors. Spending in this area is consistently high due to the critical need for secure and reliable communication networks for national security. Comparable spending benchmarks for similar network operations and sustainment contracts within DOD often run into hundreds of millions of dollars annually.
Small Business Impact
The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). While Leidos, Inc. is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will depend on Leidos's subcontracting plan and the specific requirements of the contract, which could impact the small business ecosystem within the defense IT sector.
Oversight & Accountability
Oversight for this contract will likely be managed by the Defense Information Systems Agency (DISA), the contracting agency. Accountability measures will be tied to performance metrics outlined in the contract's statement of work and delivery orders. Transparency is generally maintained through contract award databases and reporting requirements, though specific operational details may be classified. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- DOD Information Technology Services
- Network Operations and Maintenance
- Defense Communications Infrastructure
- IT Services for National Security
Risk Flags
- Cybersecurity Risk
- Operational Continuity
- Technical Obsolescence
- Contract Scope Management
Tags
department-of-defense, dodnet, network-operations, it-services, sustainment, leidos-inc, full-and-open-competition, firm-fixed-price, defense-information-systems-agency, maryland, computer-systems-design-services, mid-size-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $79.5 million to LEIDOS, INC.. DEPARTMENT OF DEFENSE (DOD) NETWORK (DODNET) OPERATIONS AND SUSTAINMENT (DOS)
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 $79.5 million.
What is the period of performance?
Start: 2024-06-19. End: 2026-05-31.
What is Leidos, Inc.'s track record with similar large-scale DOD network sustainment contracts?
Leidos, Inc. has a significant history of performing IT services for the Department of Defense, including network operations and sustainment. They have held numerous prime contracts for various defense agencies, managing complex IT infrastructures and ensuring operational readiness. Their experience often involves large dollar values and long performance periods, similar to the DODNET DOS contract. While specific performance metrics for past contracts are not detailed here, their continued success in winning competitive bids suggests a generally positive track record in delivering on complex defense IT requirements. However, a deeper dive into past performance reviews and any documented issues would provide a more comprehensive assessment.
How does the $79.5M value compare to historical spending on DODNET operations and sustainment?
The $79.5 million awarded for this specific delivery order represents a portion of the overall spending on DODNET Operations and Sustainment (DOS). Without historical data on previous DOS contracts or a breakdown of annual spending for the entire DODNET program, a direct comparison is challenging. However, given the critical nature and scale of DODNET, annual sustainment costs can easily reach hundreds of millions of dollars. This $79.5M award, covering a period of approximately two years, suggests it is a significant but potentially not the entirety of the annual budget for DOS. It's important to analyze this within the context of the total program lifecycle costs and previous contract awards to understand if spending is increasing, decreasing, or remaining stable.
What are the primary risks associated with sustaining a network as critical as DODNET?
The primary risks associated with sustaining a network as critical as DODNET are multifaceted. Cybersecurity threats are paramount, as any breach could have severe national security implications. Operational failures, such as system outages or performance degradation, can disrupt military command and control. Technical obsolescence is another risk, requiring continuous upgrades and integration of new technologies to maintain effectiveness. Vendor lock-in or over-reliance on a single provider can limit flexibility and potentially increase costs over time. Furthermore, managing the complexity of such a vast network, with diverse hardware, software, and user requirements, presents inherent operational and integration risks. Ensuring consistent performance and rapid response to incidents are also critical risk areas.
How effective is the firm-fixed-price (FFP) contract type in managing costs for IT sustainment services?
The firm-fixed-price (FFP) contract type is generally effective in managing costs for IT sustainment services when the scope of work is well-defined and stable. It shifts the risk of cost overruns to the contractor, providing the government with cost certainty. For routine sustainment and operations where requirements are predictable, FFP can lead to significant cost savings. However, for complex IT environments where requirements may evolve or unforeseen technical challenges arise, FFP can become problematic. Contractors may be incentivized to cut corners to maintain profitability, potentially impacting quality or security. Conversely, if the government needs to make significant changes, contract modifications can become costly and time-consuming. Therefore, the effectiveness of FFP hinges on meticulous scope definition and robust change management processes.
What is the typical market size and competitive landscape for large-scale defense IT sustainment contracts?
The market for large-scale defense IT sustainment contracts is substantial, representing billions of dollars annually. It is dominated by a relatively small number of large, established government contractors with extensive experience, security clearances, and the infrastructure to support complex defense requirements. Companies like Leidos, Inc., Booz Allen Hamilton, SAIC, and others frequently compete for these high-value contracts. The competitive landscape, while appearing concentrated at the prime contractor level, often involves a tiered structure where these primes subcontract to a wider array of specialized technology providers, including small and medium-sized businesses. Full and open competition is common for major programs, but the barriers to entry for new, smaller companies to become prime contractors are very high due to security, past performance, and scale requirements.
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: $465,498,125
Exercised Options: $97,423,473
Current Obligation: $79,508,950
Actual Outlays: $13,500,000
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HC104722D0002
IDV Type: IDC
Timeline
Start Date: 2024-06-19
Current End Date: 2026-05-31
Potential End Date: 2029-05-31 00:00:00
Last Modified: 2025-12-19
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