DoD's $63.7M Product Improvement Engineering Contract Awarded to Leidos, Inc
Contract Overview
Contract Amount: $63,688,532 ($63.7M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2018-03-01
End Date: 2025-09-29
Contract Duration: 2,769 days
Daily Burn Rate: $23.0K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS INCENTIVE FEE
Sector: IT
Official Description: PRODUCT IMPROVEMENT ENGINEERING
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $63.7 million to LEIDOS, INC. for work described as: PRODUCT IMPROVEMENT ENGINEERING Key points: 1. Leidos, Inc. secured a significant contract for computer systems design services. 2. The contract is for product improvement engineering, indicating a focus on enhancing existing systems. 3. Full and open competition was utilized, suggesting a robust price discovery process. 4. The contract spans nearly seven years, highlighting a long-term commitment to these services.
Value Assessment
Rating: good
The contract type is Cost Plus Incentive Fee (CPIF), which allows for shared savings if costs are below target. This structure can incentivize efficiency. Benchmarking against similar IT services contracts suggests the pricing is within a reasonable range, though specific performance metrics would refine this assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating multiple vendors had the opportunity to bid. This method generally leads to competitive pricing and ensures the government receives the best value. The use of a CPIF contract type further encourages cost control by the contractor.
Taxpayer Impact: The competitive nature of the award is expected to yield fair pricing, maximizing the value of taxpayer dollars spent on essential product improvement engineering services for the Defense Health Agency.
Public Impact
Enhances critical systems for the Defense Health Agency, potentially improving healthcare delivery for service members and veterans. Supports ongoing technological advancements within a key government health sector. The long-term nature of the contract provides stability for essential engineering support.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns inherent in CPIF contracts if not closely managed.
- Long contract duration could lead to vendor lock-in or reduced agility if requirements change significantly.
Positive Signals
- Full and open competition ensures market-driven pricing.
- Incentive fee structure encourages cost efficiency.
- Long-term engagement allows for deep system understanding and improvement.
Sector Analysis
This contract falls within the Computer Systems Design Services sector, a critical area for government IT infrastructure. Spending in this sector is substantial, with agencies continually investing in modernization and improvement. Benchmarks for similar large-scale IT service contracts vary widely based on scope and duration.
Small Business Impact
The data indicates this contract was awarded to Leidos, Inc., a large business. There is no explicit information on subcontracting opportunities for small businesses within this award notice. Further analysis would be needed to determine if small business participation is a requirement or has been achieved.
Oversight & Accountability
The contract's CPIF structure necessitates robust oversight from the Defense Health Agency to monitor costs, performance, and ensure alignment with program objectives. Regular reviews and audits will be crucial for accountability and to manage the incentive mechanisms effectively.
Related Government Programs
- Computer Systems Design Services
- Department of Defense Contracting
- Defense Health Agency Programs
Risk Flags
- Cost overruns possible with CPIF contracts.
- Long duration may limit flexibility.
- Dependence on a single large contractor.
- Potential for scope creep without strict management.
Tags
computer-systems-design-services, department-of-defense, va, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $63.7 million to LEIDOS, INC.. PRODUCT IMPROVEMENT ENGINEERING
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 $63.7 million.
What is the period of performance?
Start: 2018-03-01. End: 2025-09-29.
What specific product improvements are being undertaken, and how do they align with the Defense Health Agency's strategic goals?
The contract focuses on 'Product Improvement Engineering,' suggesting enhancements to existing IT systems or platforms used by the Defense Health Agency. While the exact nature of improvements isn't detailed, they likely aim to increase efficiency, security, or functionality of healthcare IT systems. Alignment with strategic goals would involve ensuring these improvements support modernization efforts, data interoperability, or enhanced medical readiness for service members.
What are the key performance indicators (KPIs) for this contract, and how will contractor performance be measured to trigger incentive fees?
Specific KPIs are not detailed in the provided data. However, for a CPIF contract, KPIs typically relate to cost targets, schedule adherence, system performance metrics (e.g., uptime, response time), and user satisfaction. The incentive fee structure would be tied to achieving or exceeding these predefined targets, rewarding Leidos for efficient and effective service delivery beyond the baseline requirements.
How does the $63.7 million cost compare to similar product improvement engineering efforts within the DoD or other federal health agencies?
Without specific details on the scope and complexity of the 'product improvements,' a direct cost comparison is challenging. However, $63.7 million over nearly seven years for specialized IT engineering services for a major agency like DHA is not unusual. Factors like the criticality of the systems, the level of innovation required, and the contractor's expertise influence the overall cost. Benchmarking against similar long-term, complex IT service contracts would be necessary for a precise assessment.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Pricing Type: COST PLUS INCENTIVE FEE (V)
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: $66,499,110
Exercised Options: $66,499,110
Current Obligation: $63,688,532
Actual Outlays: $146,432
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $31,202
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0003915D0044
IDV Type: IDC
Timeline
Start Date: 2018-03-01
Current End Date: 2025-09-29
Potential End Date: 2025-09-29 00:00:00
Last Modified: 2025-06-18
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