Leidos, Inc. awarded $21.8M for IT services by NIH, highlighting need for robust IT support

Contract Overview

Contract Amount: $21,804,237 ($21.8M)

Contractor: Leidos, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2012-06-13

End Date: 2017-08-31

Contract Duration: 1,905 days

Daily Burn Rate: $11.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIXED PRICE LEVEL OF EFFORT

Sector: IT

Official Description: FUNDING NEEDS TO IRTMB IT SERVICE CONTRACTS

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20852

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $21.8 million to LEIDOS, INC. for work described as: FUNDING NEEDS TO IRTMB IT SERVICE CONTRACTS Key points: 1. Contract value of $21.8M over 5 years indicates significant investment in IT infrastructure. 2. Full and open competition suggests a healthy market for IT services. 3. Fixed Price Level of Effort contract type aims to control costs while ensuring service delivery. 4. Performance period of 1905 days spans over 5 years, suggesting a long-term need. 5. The contract falls under Computer Systems Design Services, a critical area for federal operations. 6. Delivery Order award type implies this is part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract.

Value Assessment

Rating: good

The contract value of $21.8 million over approximately 5 years for IT services appears reasonable given the scope of Computer Systems Design Services. Benchmarking against similar large-scale IT contracts within the federal government suggests that pricing is likely competitive, especially considering it was awarded under full and open competition. The fixed-price nature of the contract provides cost certainty for the government, assuming the level of effort is accurately estimated and managed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of 3 bids suggests a moderate level of competition for this specific delivery order. While full and open competition is generally preferred for maximizing price discovery and ensuring fair access to government contracts, the number of bidders can vary based on contract complexity and market dynamics.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through vendor rivalry. A moderate number of bidders, like the 3 in this case, suggests that while competition exists, there might be opportunities for even greater price reductions with a larger pool of interested and qualified vendors.

Public Impact

The National Institutes of Health (NIH) benefits from enhanced IT infrastructure and support services. Essential IT services, including computer systems design, are delivered to support NIH's research and health initiatives. The primary geographic impact is in Maryland, where the contract is managed and likely performed. The contract supports a workforce skilled in IT services and computer systems design.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if follow-on contracts are not competitively bid.
Risk of scope creep if the 'level of effort' is not strictly managed.
Dependence on a single contractor for critical IT systems could pose operational risks.

Positive Signals

Awarded under full and open competition, indicating a fair and accessible process.
Fixed Price Level of Effort contract type provides cost predictability.
Long performance period suggests a stable and ongoing need for these services.

Sector Analysis

The federal IT services market is vast and highly competitive, with agencies like the NIH relying heavily on contractors for specialized expertise. This contract for Computer Systems Design Services falls within a segment focused on the architecture, development, and implementation of IT systems. Comparable spending benchmarks for similar IT support contracts within large federal health agencies often range in the tens to hundreds of millions of dollars over multiple years, making this $21.8M award a significant but not outlier investment.

Small Business Impact

This contract was not set aside for small businesses, as indicated by 'ss: false' and 'sb: false'. The award to a large prime contractor like Leidos, Inc. suggests that small businesses are unlikely to be directly involved as prime awardees. However, there is potential for small businesses to participate as subcontractors, depending on Leidos's subcontracting plan and the specific needs of the IT services required. The absence of a small business set-aside means opportunities for direct prime contracting with small businesses were not prioritized for this specific award.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the National Institutes of Health. Accountability measures are inherent in the fixed-price level-of-effort structure, requiring the contractor to deliver defined services within agreed-upon parameters. Transparency is facilitated through contract award databases, though specific performance metrics and detailed oversight reports are often internal. The Inspector General for the Department of Health and Human Services may have jurisdiction for audits and investigations if fraud or mismanagement is suspected.

Related Government Programs

NIH IT Support Contracts
Federal Computer Systems Design Services
Large-Scale IT Service Delivery
Health IT Modernization Efforts

Risk Flags

Contract Duration
Competition Level
Contract Type

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $21.8 million to LEIDOS, INC.. FUNDING NEEDS TO IRTMB IT SERVICE CONTRACTS

Who is the contractor on this award?

The obligated recipient is LEIDOS, 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 $21.8 million.

What is the period of performance?

Start: 2012-06-13. End: 2017-08-31.

What is the track record of Leidos, Inc. in delivering similar IT services to federal agencies?

Leidos, Inc. has a substantial track record in providing a wide array of IT services to various federal agencies, including defense, intelligence, and health sectors. Their experience encompasses areas such as systems integration, cybersecurity, cloud computing, data analytics, and enterprise IT modernization. For instance, they have held numerous large-scale contracts with agencies like the Department of Defense and NASA. Their performance history generally indicates a capacity to manage complex IT projects and deliver on demanding requirements. However, like any large contractor, specific contract performance can vary, and a detailed review of past performance evaluations for similar NIH contracts would provide a more granular understanding of their reliability and effectiveness in this specific domain.

How does the $21.8 million value compare to other IT service contracts awarded by the NIH?

The $21.8 million contract value for Leidos, Inc. is a significant but not exceptionally large award within the context of the National Institutes of Health's overall IT spending. The NIH, as a major research institution, invests heavily in IT infrastructure and services, often awarding multi-year contracts that can reach tens or even hundreds of millions of dollars. This particular contract, spanning over five years, represents a substantial commitment to computer systems design services. When compared to other NIH IT contracts, it falls within a common range for specialized IT support, particularly for projects requiring extensive design and integration work. However, it is smaller than some of the agency's largest enterprise-wide IT modernization or managed services contracts.

What are the primary risks associated with this fixed-price level-of-effort contract type?

The primary risks associated with a fixed-price level-of-effort (FPLE) contract type involve balancing cost control with service delivery. For the government, the risk lies in the potential for the contractor to deliver only the minimum required effort to meet the fixed price, potentially impacting the quality or completeness of services if not carefully monitored. There's also a risk of scope creep if the 'level of effort' is not precisely defined and managed, leading to costs exceeding the initial estimate if additional work is required. For the contractor, the risk is that the defined level of effort may prove insufficient to complete the work adequately, potentially leading to losses if they cannot renegotiate terms or if the fixed price is strictly adhered to without flexibility. Effective oversight and clear performance metrics are crucial to mitigate these risks.

How effective is full and open competition in ensuring value for money for this type of IT service contract?

Full and open competition is generally considered the most effective method for ensuring value for money in federal IT service contracts. By allowing all responsible sources to submit bids, it fosters a competitive environment that drives down prices and encourages innovation. For a contract like this, valued at $21.8 million for computer systems design services, competition helps ensure that the NIH receives high-quality services at a fair and reasonable price. The presence of multiple bidders allows the agency to compare technical approaches and pricing, selecting the offer that provides the best overall value. While the number of bidders (3 in this case) influences the intensity of competition, the principle of full and open competition itself is a strong mechanism for achieving value.

What are the historical spending patterns for Computer Systems Design Services at the NIH?

Historical spending patterns for Computer Systems Design Services at the NIH indicate a consistent and significant investment in this area, reflecting the agency's reliance on advanced IT infrastructure to support its biomedical research mission. Over the years, the NIH has awarded numerous contracts for system design, integration, and development, often through IDIQ vehicles that allow for task orders like the one awarded to Leidos. Spending in this category typically fluctuates based on major modernization initiatives, the introduction of new research technologies, and the need to maintain and upgrade existing complex systems. The total annual expenditure on computer systems design services can range from tens to hundreds of millions of dollars, depending on the scale of ongoing projects and the agency's strategic IT priorities.

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 › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: FIXED PRICE LEVEL OF EFFORT (B)

Evaluated Preference: NONE

Contractor Details

Parent Company: Leidos Holdings, Inc.

Address: 11951 FREEDOM DR, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $21,804,237

Exercised Options: $21,804,237

Current Obligation: $21,804,237

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 263010046

IDV Type: IDC

Timeline