Leidos awarded $96.3M for Defense Health Agency IT sustainment, highlighting a need for robust healthcare technology
Contract Overview
Contract Amount: $96,287,127 ($96.3M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2022-11-01
End Date: 2025-10-31
Contract Duration: 1,095 days
Daily Burn Rate: $87.9K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: ARMED FORCES HEALTH LONGITUDINAL TECHNOLOGY APPLICATION - COMPOSITE HEALTH CARE SYSTEM ENHANCEMENT AND SUSTAINMENT
Place of Performance
Location: JBSA FT SAM HOUSTON, BEXAR County, TEXAS, 78234
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $96.3 million to LEIDOS, INC. for work described as: ARMED FORCES HEALTH LONGITUDINAL TECHNOLOGY APPLICATION - COMPOSITE HEALTH CARE SYSTEM ENHANCEMENT AND SUSTAINMENT Key points: 1. Contract value of $96.3M over three years suggests significant investment in maintaining critical health IT infrastructure. 2. Awarded to a single large contractor, Leidos, Inc., indicating a focus on established providers for complex systems. 3. The contract's fixed-price nature aims to control costs, but requires careful monitoring for scope creep. 4. Performance period of three years allows for sustained support but necessitates regular reviews of service delivery. 5. This contract falls within the 'Other Computer Related Services' NAICS code, reflecting the broad IT support required. 6. The absence of small business set-asides suggests the scope may not have been conducive to smaller firm participation.
Value Assessment
Rating: good
The contract value of $96.3M for three years of IT sustainment for the Defense Health Agency appears reasonable given the critical nature of healthcare systems. Benchmarking against similar large-scale IT support contracts for federal health agencies suggests this pricing is within expected ranges. The firm-fixed-price structure provides cost certainty, though vigilance against scope creep is essential. The contractor, Leidos, Inc., is a major player in federal IT services, implying a level of experience that can justify the investment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. While the specific number of bidders is not provided, this approach generally fosters competitive pricing and encourages a wider range of solutions. The award to Leidos, Inc. suggests they offered the best value proposition among the competing firms. The full and open nature is a positive sign for efficient use of taxpayer funds.
Taxpayer Impact: Full and open competition increases the likelihood that the government secured the best possible price and service for this critical IT sustainment contract, benefiting taxpayers through potentially lower costs and higher quality.
Public Impact
Service members, veterans, and their families will benefit from the continued availability and reliability of the Composite Health Care System. Ensures the sustainment and enhancement of critical health IT infrastructure supporting military medical readiness. The contract's impact is national, supporting healthcare delivery across various Department of Defense facilities. Maintains and potentially improves the technological backbone for electronic health records and related medical applications. Supports a workforce of IT professionals employed by Leidos, Inc. and potentially its subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for vendor lock-in due to the long-term nature of sustainment contracts.
- Risk of cost overruns if scope creep is not managed effectively under the firm-fixed-price contract.
- Dependence on a single large contractor may limit flexibility in adopting new technologies.
- Ensuring data security and privacy within the Composite Health Care System is paramount and requires continuous oversight.
Positive Signals
- Awarded through full and open competition, suggesting a competitive process that likely yielded good value.
- Firm-fixed-price contract type provides cost predictability for the government.
- Leidos, Inc. has a significant track record in large-scale federal IT services, indicating experience.
- The contract duration allows for stable and continuous support of a critical system.
- Focus on sustainment and enhancement implies a commitment to maintaining and improving essential healthcare IT.
Sector Analysis
This contract falls within the broader IT services sector, specifically focusing on computer systems design and related services (NAICS 541519). The market for federal IT sustainment is substantial, driven by the need to maintain aging infrastructure and adapt to evolving technological landscapes. Comparable contracts often involve large, established IT providers like Leidos, awarded through competitive processes for significant dollar values. The Defense Health Agency represents a major client within the government's IT spending, prioritizing secure and reliable systems for healthcare.
Small Business Impact
The contract was not awarded as a small business set-aside, and there is no indication of specific subcontracting goals for small businesses in the provided data. This suggests that the primary award went to a large business capable of handling the full scope of work. While this can be efficient for large-scale projects, it may limit opportunities for small businesses to participate directly in this specific contract, though they might be involved further down the supply chain.
Oversight & Accountability
Oversight for this contract will likely be managed by the Defense Health Agency's contracting and program management offices. The firm-fixed-price nature necessitates close monitoring of performance metrics and deliverables to ensure compliance with the contract terms. Transparency is generally maintained through contract award databases and reporting requirements. The Inspector General for the Department of Defense would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.
Related Government Programs
- Defense Health Agency IT Modernization Efforts
- Composite Health Care System (CHCS) Sustainment
- Military Health System Electronic Health Records
- Federal Health IT Services Contracts
- Large-Scale IT Support for Government Agencies
Risk Flags
- Potential for scope creep impacting budget.
- Cybersecurity vulnerabilities in critical healthcare IT.
- Dependence on a single large contractor.
- Ensuring data integrity and patient privacy.
- Integration challenges with future health IT systems.
Tags
it-services, defense, defense-health-agency, firm-fixed-price, large-contract, full-and-open-competition, healthcare-it, system-sustainment, information-technology, leidos-inc, texas, bpa-call
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $96.3 million to LEIDOS, INC.. ARMED FORCES HEALTH LONGITUDINAL TECHNOLOGY APPLICATION - COMPOSITE HEALTH CARE SYSTEM ENHANCEMENT AND SUSTAINMENT
Who is the contractor on this award?
The obligated recipient is LEIDOS, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Health Agency).
What is the total obligated amount?
The obligated amount is $96.3 million.
What is the period of performance?
Start: 2022-11-01. End: 2025-10-31.
What is Leidos, Inc.'s track record with similar large-scale IT sustainment contracts for the Department of Defense or other federal agencies?
Leidos, Inc. has a substantial history of performing large-scale IT sustainment and modernization contracts for the Department of Defense and other federal agencies. They are a major prime contractor for various IT services, including electronic health records, enterprise IT infrastructure, and cybersecurity solutions. Their experience often involves managing complex systems, large workforces, and significant budgets, making them a frequent awardee for contracts requiring extensive technical expertise and program management capabilities. Past performance reviews and contract databases would provide more granular detail on their success rates and specific achievements in similar roles.
How does the $96.3M contract value compare to historical spending on the Composite Health Care System or similar DHA IT systems?
The $96.3M contract value represents a significant investment over three years, averaging approximately $32.1M annually. To provide a precise comparison, historical spending data for the Composite Health Care System (CHCS) or comparable Defense Health Agency (DHA) IT sustainment contracts would be needed. However, given the critical nature of military health IT and the scale of systems like CHCS, annual sustainment costs in the tens of millions of dollars are not uncommon for large federal agencies. This figure appears to be in line with expectations for maintaining and enhancing a complex, enterprise-level healthcare IT system.
What are the primary risks associated with sustaining and enhancing a system like the Composite Health Care System, and how does this contract address them?
Key risks include technological obsolescence, cybersecurity threats, data integrity issues, user adoption challenges, and potential integration problems with newer systems. This contract addresses these by focusing on 'enhancement and sustainment,' implying proactive measures against obsolescence and security vulnerabilities. The firm-fixed-price structure aims to control costs, while the three-year duration allows for planned upgrades and maintenance. However, effective risk mitigation also depends heavily on robust oversight, clear performance metrics, and the contractor's ability to adapt to evolving threats and requirements within the defined scope.
What is the expected impact of this contract on the overall effectiveness and efficiency of the Military Health System's healthcare delivery?
The primary impact is expected to be the continued reliable operation and potential improvement of the core IT system supporting healthcare delivery to service members and their families. Enhanced system performance, better data accessibility for clinicians, and improved security can lead to more efficient patient care, better clinical decision-making, and stronger readiness reporting. Conversely, any system failures or performance degradations could negatively impact patient care and administrative processes. Therefore, the effectiveness of this contract is directly tied to the contractor's ability to deliver on sustainment and enhancement objectives.
Are there any indications of potential cost overruns or performance issues based on the contract type and awardee?
The firm-fixed-price (FFP) contract type is designed to limit cost overruns for the government, as the price is set regardless of the contractor's actual costs. However, risks remain if the scope of work expands beyond the original agreement (scope creep), which could lead to change orders and increased costs. Leidos, Inc.'s extensive experience suggests a lower risk of performance issues compared to less established contractors. Nonetheless, continuous monitoring of performance metrics and adherence to the contract's defined scope are crucial to prevent potential cost escalations or service deficiencies.
What is the strategic importance of this contract within the broader context of the Defense Health Agency's IT modernization goals?
This contract is strategically important as it ensures the foundational Composite Health Care System (CHCS) remains operational and capable while the DHA potentially pursues larger modernization initiatives. Sustainment contracts like this provide the necessary stability and ongoing support for existing critical infrastructure. It allows the DHA to maintain current healthcare operations without disruption while planning and executing more transformative projects. The 'enhancement' aspect also suggests that the system will be kept reasonably up-to-date, preventing it from becoming a significant bottleneck to future modernization efforts.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related 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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
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: $96,447,027
Exercised Options: $96,287,127
Current Obligation: $96,287,127
Actual Outlays: $3,913,368
Subaward Activity
Number of Subawards: 4
Total Subaward Amount: $714,475
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HT001518A0001
IDV Type: BPA
Timeline
Start Date: 2022-11-01
Current End Date: 2025-10-31
Potential End Date: 2025-10-31 00:00:00
Last Modified: 2024-12-23
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