Leidos Biomedical Research Inc. awarded $57.9M for GOCO R&D Facility Operations by NIH

Contract Overview

Contract Amount: $57,899,368 ($57.9M)

Contractor: Leidos Biomedical Research Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2016-09-26

End Date: 2021-09-25

Contract Duration: 1,825 days

Daily Burn Rate: $31.7K/day

Competition Type: NOT COMPETED

Pricing Type: COST NO FEE

Sector: R&D

Official Description: IGF::OT::IGF OPERATION OF GOVERNMENT-OWNED CONTRACTOR-OPERATED (GOCO) R&D FACILITIES

Place of Performance

Location: FREDERICK, FREDERICK County, MARYLAND, 21702

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $57.9 million to LEIDOS BIOMEDICAL RESEARCH INC for work described as: IGF::OT::IGF OPERATION OF GOVERNMENT-OWNED CONTRACTOR-OPERATED (GOCO) R&D FACILITIES Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. The contract duration of 5 years (1825 days) suggests a long-term need for these services. 3. Facility support services are critical for ongoing research operations. 4. The contract type (Cost No Fee) indicates that the contractor is reimbursed for allowable costs but does not receive a profit margin. 5. The absence of small business set-aside flags suggests this contract was not specifically targeted for small business participation.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without comparable sole-source GOCO R&D facility operations contracts. The Cost No Fee (CNF) contract type means the government reimburses Leidos for approved expenses but does not pay a profit. This structure can help control costs by removing profit motive, but it relies heavily on accurate cost estimation and robust oversight to prevent overruns. The total award amount of $57.9 million over five years averages to approximately $11.6 million annually, which needs to be assessed against the scope and scale of the R&D facilities managed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities, proprietary technology, or when circumstances necessitate an immediate award without a competitive process. The lack of competition means that the government did not benefit from the price discovery and innovation that typically arises from a bidding process, potentially leading to higher costs than if it had been competed.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive bidding. Without multiple offers, there is less pressure on the contractor to offer the most cost-effective solution, and the government has fewer options to negotiate favorable terms.

Public Impact

The primary beneficiaries are the researchers and scientific community utilizing the GOCO R&D facilities, enabling continued scientific advancement. Services delivered include the operation and maintenance of critical research infrastructure, ensuring a functional environment for experiments and studies. The geographic impact is concentrated in Maryland, where the facilities are located. Workforce implications include the employment of personnel to manage and operate the facilities, supporting the scientific ecosystem.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially impacting cost-effectiveness.
Cost No Fee structure requires diligent oversight to ensure cost control and prevent inefficiencies.
Lack of transparency in the justification for sole-source award could obscure potential alternatives.

Positive Signals

Cost No Fee contract type can help manage costs by eliminating profit margins.
Long-term contract award provides stability for critical R&D facility operations.
Focus on facility operations ensures continuity for vital research activities.

Sector Analysis

The contract falls within the Facilities Support Services sector, specifically supporting Government-Owned, Contractor-Operated (GOCO) Research and Development facilities. This niche involves managing and maintaining specialized infrastructure crucial for scientific research. The market for such services is often characterized by long-term relationships and high barriers to entry due to the specialized nature of the facilities and security requirements. Comparable spending benchmarks are difficult to establish without more specific details on the scale and type of R&D conducted.

Small Business Impact

This contract does not appear to have a small business set-aside. The nature of operating large-scale R&D facilities often requires significant resources and specialized expertise, which may favor larger, established contractors. There is no explicit indication of subcontracting plans for small businesses within the provided data, suggesting limited direct opportunities for small businesses through this specific award.

Oversight & Accountability

Oversight for this contract would primarily fall under the National Institutes of Health (NIH) within the Department of Health and Human Services. As a Cost No Fee contract, rigorous financial oversight is essential to monitor allowable costs and ensure efficient operations. Transparency regarding the justification for the sole-source award and ongoing performance metrics would be key accountability measures. The Inspector General for HHS would have jurisdiction over any potential fraud, waste, or abuse.

Related Government Programs

Government-Owned Contractor-Operated (GOCO) Facilities
Research and Development Infrastructure Support
Facilities Management Services
Biomedical Research Support Contracts

Risk Flags

Sole-source award lacks competitive justification.
Potential for cost inefficiencies due to lack of competition.
Cost No Fee requires stringent cost oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $57.9 million to LEIDOS BIOMEDICAL RESEARCH INC. IGF::OT::IGF OPERATION OF GOVERNMENT-OWNED CONTRACTOR-OPERATED (GOCO) R&D FACILITIES

Who is the contractor on this award?

The obligated recipient is LEIDOS BIOMEDICAL RESEARCH INC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $57.9 million.

What is the period of performance?

Start: 2016-09-26. End: 2021-09-25.

What is the specific justification for awarding this contract on a sole-source basis to Leidos Biomedical Research Inc.?

The provided data indicates the contract was awarded as 'NOT COMPETED' and is sole-source. Typically, sole-source justifications are required when only one responsible source is available or capable of meeting the agency's needs. For GOCO R&D facilities, this could be due to highly specialized equipment, unique operational knowledge, proprietary processes, or specific security clearances held by the incumbent contractor. Without the official justification document (e.g., a Justification and Approval - J&A), the precise reasons remain speculative. However, agencies often cite the need for continuity of operations, avoiding significant disruption, or the unique expertise required to manage complex research environments as reasons for sole-source awards in such critical infrastructure areas.

How does the 'Cost No Fee' (CNF) contract type compare to other contract types in terms of cost control and contractor incentive?

The 'Cost No Fee' (CNF) contract type is a variation of a cost-reimbursement contract where the contractor is reimbursed for all allowable costs incurred in performing the contract but receives no fee or profit. This structure is often used when the scope of work is uncertain or when the government wants to minimize contractor profit. Compared to fixed-price contracts, CNF offers flexibility but requires robust government oversight to ensure costs are reasonable and necessary. Compared to other cost-reimbursement contracts (like Cost Plus Incentive Fee or Cost Plus Award Fee), CNF removes the profit motive entirely, potentially reducing contractor incentive for efficiency unless coupled with strong performance metrics and oversight. The government bears the primary risk of cost overruns, making diligent monitoring crucial.

What are the potential risks associated with a sole-source award for critical R&D facility operations?

A primary risk of a sole-source award for critical R&D facility operations is the potential for inflated costs due to a lack of competitive pressure. Without competing bids, the contractor may have less incentive to optimize costs or offer the most innovative or efficient solutions. There's also a risk of complacency, where the incumbent contractor might not feel the same pressure to continuously improve services or performance as they would in a competitive environment. Furthermore, the government may miss out on opportunities to leverage new technologies or approaches that emerging competitors could offer. Ensuring robust contract management, performance monitoring, and clear deliverables becomes even more critical to mitigate these risks.

What is the historical spending pattern for GOCO R&D facility operations at NIH, and how does this award fit within it?

The provided data only includes details for this specific award ($57.9M from 2016-2025). To assess historical spending patterns, one would need to examine prior contracts for the operation of these specific GOCO R&D facilities, potentially including contracts held by Leidos Biomedical Research Inc. or its predecessors, as well as any other contractors involved in similar operations at NIH. Analyzing the total obligated amounts, contract durations, and award types over several years would reveal trends in spending, whether it's increasing or decreasing, and the typical contract vehicles used. This current award represents a significant investment over a five-year period, suggesting a sustained commitment to maintaining these research capabilities.

How does the 'Facilities Support Services' (NAICS 561210) category typically perform in terms of contract value and competition?

The Facilities Support Services category (NAICS 561210) encompasses a broad range of services, including general building maintenance, cleaning, security, and operational support. Contract values within this sector can vary dramatically, from small local service agreements to large, complex contracts for managing extensive government facilities, as seen here. Competition can be high in the general facilities support market, often leading to competitive bidding and potentially lower prices for standardized services. However, for specialized facilities like GOCO R&D sites, the requirements become more niche, potentially reducing the number of capable competitors and increasing the likelihood of sole-source or limited competition awards, as observed in this case.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N01CO5240180

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: Leidos Holdings, Inc.

Address: 1050 BOYLES ST, FREDERICK, MD, 21702

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $57,899,368

Exercised Options: $57,899,368

Current Obligation: $57,899,368

Actual Outlays: $126,527

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $365,164

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: HHSN261201500003I

IDV Type: IDC

Timeline