Leidos awarded $17.5M for engineering services, with a high cost-plus award fee structure

Contract Overview

Contract Amount: $17,560,765 ($17.6M)

Contractor: Leidos Security Detection & Automation, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2006-09-12

End Date: 2011-09-29

Contract Duration: 1,843 days

Daily Burn Rate: $9.5K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 3

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: CAARS

Place of Performance

Location: WOBURN, MIDDLESEX County, MASSACHUSETTS, 01801

State: Massachusetts Government Spending

Plain-Language Summary

Department of Homeland Security obligated $17.6 million to LEIDOS SECURITY DETECTION & AUTOMATION, INC. for work described as: CAARS Key points: 1. The contract utilized a cost-plus award fee structure, which can incentivize performance but may lead to higher costs if not managed carefully. 2. With a duration of 1843 days, this represents a significant long-term commitment for engineering services. 3. The contract was awarded as a competitive delivery order under a larger IDIQ, suggesting some level of competition. 4. The specific engineering services provided are not detailed, making a direct performance assessment challenging. 5. The contract's value is moderate within the context of federal engineering service procurements. 6. The absence of small business set-aside indicates a focus on larger prime contractors for this requirement.

Value Assessment

Rating: fair

The cost-plus award fee (CPAF) structure, while common for complex services, requires diligent oversight to ensure value. Without detailed performance metrics or comparisons to similar CPAF contracts for engineering services, it's difficult to definitively assess value for money. The contract's duration suggests a substantial investment, and the final cost will depend heavily on performance against award fee criteria. Benchmarking the per-unit cost is not feasible without more granular data on the specific services rendered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded as a competitive delivery order, indicating that it was competed under a broader indefinite-delivery, indefinite-quantity (IDIQ) contract. While the specific number of bidders for this particular delivery order is not provided, the 'full-and-open' designation suggests that multiple offerors had the opportunity to compete. This competitive process is generally expected to foster price discovery and encourage competitive pricing among potential awardees.

Taxpayer Impact: The competitive nature of this award, even as a delivery order, is beneficial for taxpayers as it likely resulted in a more favorable price than a sole-source procurement. It ensures that the government is not unduly disadvantaged by a lack of market alternatives.

Public Impact

The Department of Homeland Security benefits from specialized engineering services to support its mission. The contract delivers essential engineering expertise, likely contributing to the development or maintenance of critical infrastructure or systems. The geographic impact is not specified but likely relates to DHS operational areas. The workforce implications involve skilled engineering professionals employed by the contractor, Leidos.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus award fee contracts can sometimes lead to cost overruns if not managed with strict oversight.
The long duration of the contract (over 4 years) increases the risk of scope creep or evolving requirements not being adequately addressed.
Lack of specific service details makes it hard to evaluate if the award fee structure truly reflects optimal value.
The contract was not set aside for small businesses, potentially limiting opportunities for smaller firms in this specific award.

Positive Signals

Awarded as a competitive delivery order, indicating a degree of market competition was leveraged.
The contractor, Leidos, is a large and established entity with significant experience in government contracting.
The contract duration suggests a stable, long-term need for these engineering services, implying strategic importance.
The use of an award fee mechanism, if well-structured, can drive high performance from the contractor.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), a broad category encompassing various specialized engineering disciplines. The federal government is a significant consumer of engineering services, procuring them for infrastructure projects, defense systems, research and development, and operational support. Spending in this sector is often driven by national security needs, infrastructure modernization, and scientific advancement. Comparable spending benchmarks would typically involve analyzing other large-scale engineering service contracts awarded by agencies like the Department of Defense, Department of Transportation, and NASA.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses explicitly mentioned in the provided data. This suggests that the primary award went to a large business prime contractor, Leidos. While large prime contractors often engage small businesses as subcontractors on their projects, the absence of a set-aside or explicit subcontracting goals means that opportunities for small businesses are not guaranteed and depend on the prime contractor's procurement strategy. This could limit the direct impact on the small business ecosystem for this particular contract.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officer and the relevant program office within the Department of Homeland Security. The cost-plus award fee structure necessitates robust monitoring of contractor performance against defined criteria to ensure that award fees are justified. Transparency is facilitated through contract award databases, but detailed performance reports or Inspector General audits specific to this delivery order are not publicly detailed. Accountability rests on the DHS's ability to manage the contract effectively and ensure deliverables meet requirements.

Related Government Programs

Department of Homeland Security - General Services
Engineering Services - Federal Procurement
Indefinite Delivery/Indefinite Quantity (IDIQ) Contracts
Cost-Plus Award Fee Contracts
Leidos - Federal Contracts

Risk Flags

Cost-Plus Award Fee structure requires diligent oversight to control costs.
Long contract duration increases potential for scope creep and requirement changes.
Lack of specific service details hinders granular performance and value assessment.
No explicit small business set-aside noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $17.6 million to LEIDOS SECURITY DETECTION & AUTOMATION, INC.. CAARS

Who is the contractor on this award?

The obligated recipient is LEIDOS SECURITY DETECTION & AUTOMATION, INC..

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Office of Procurement Operations).

What is the total obligated amount?

The obligated amount is $17.6 million.

What is the period of performance?

Start: 2006-09-12. End: 2011-09-29.

What specific engineering services were provided under this contract?

The provided data indicates the contract falls under NAICS code 541330 for Engineering Services. However, it does not specify the exact nature of these services. This could range from civil, mechanical, electrical, or aerospace engineering to specialized areas like cybersecurity engineering, systems engineering, or environmental engineering. Without further details on the Statement of Work (SOW), it is impossible to determine the precise technical contributions made by Leidos under this award. Understanding the specific services is crucial for evaluating the contract's relevance, performance, and overall value to the Department of Homeland Security's mission.

How does the Cost Plus Award Fee (CPAF) structure compare to other contract types for similar engineering services?

Cost Plus Award Fee (CPAF) contracts are often used when the scope of work is not precisely defined or when performance incentives are critical. Unlike fixed-price contracts, CPAF reimburses the contractor for allowable costs plus a fee that is composed of a base fee and an award amount determined by performance against specific criteria. This contrasts with Cost Plus Fixed Fee (CPFF), where the fee is fixed, or firm-fixed-price (FFP) contracts, which offer the most price certainty but less flexibility. For complex, long-term engineering projects where innovation and high performance are paramount, CPAF can be effective. However, it carries a higher risk of cost growth compared to FFP if the award criteria are not stringent or if oversight is lax. Agencies often choose CPAF when they need flexibility and strong contractor motivation for superior performance, accepting the potential for higher costs.

What is Leidos's track record with similar Cost Plus Award Fee contracts with the federal government?

Leidos is a major federal contractor with extensive experience across various agencies and contract types, including CPAF. While specific details on all their CPAF contracts are not provided here, their history suggests a capacity to manage complex projects under such structures. Analyzing Leidos's past performance on similar CPAF contracts would involve reviewing contract performance reports (CPARs), any past performance issues or commendations, and the overall cost and schedule adherence on comparable awards. Generally, large contractors like Leidos have established processes for managing CPAF, but the success of any individual contract hinges on the specific project requirements, the clarity of award criteria, and the diligence of government oversight.

What was the competitive landscape for this specific delivery order under the larger IDIQ?

The data indicates this was a 'COMPETITIVE DELIVERY ORDER' under a larger contract vehicle (likely an IDIQ). This implies that multiple companies, potentially holders of the parent IDIQ contract, were invited to bid on this specific delivery order. While the exact number of bidders for this particular order isn't stated, the 'competitive' nature suggests more than one offer was received. This is a positive sign for price discovery and value for taxpayers, as it introduces market forces into the procurement. The level of competition (e.g., number of bids, quality of bids) would ultimately influence the final negotiated price and terms for the engineering services.

How does the $17.5 million award value compare to typical federal spending on engineering services?

An award value of approximately $17.5 million for engineering services is a substantial sum, but it falls within the typical range for significant federal projects. The federal government procures billions of dollars in engineering services annually across various sectors like defense, infrastructure, and research. Contracts can range from a few hundred thousand dollars for specialized consulting to tens or hundreds of millions for large-scale design, development, and implementation projects. This $17.5 million contract, with a duration of nearly five years, represents a considerable investment for the Department of Homeland Security, likely for a critical or long-term engineering requirement. Its relative size depends on the specific sub-sector of engineering and the agency's overall budget allocation for such services.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: RESEARCH AND DEVELOPMENT › Space R&D Services

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Leidos Holdings, Inc.

Address: 2005 GANDY BOULEVARD, SAINT PETERSBURG, FL, 33716

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $17,560,765

Exercised Options: $17,560,765

Current Obligation: $17,560,765

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HSHQDC06D00074

IDV Type: IDC

Timeline