Leidos awarded $66.1M contract for MHS Genesis site deployment across Southern and Eastern US
Contract Overview
Contract Amount: $66,097,657 ($66.1M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2021-01-01
End Date: 2026-01-31
Contract Duration: 1,856 days
Daily Burn Rate: $35.6K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIXED PRICE INCENTIVE
Sector: IT
Official Description: SITE DEPLOYMENT OF MHS GENESIS TO IDENTIFIED MILITARY TREATMENT FACILITIES LOCATED IN THE SOUTHERN AND EASTERN PARTS OF THE UNITED STATES.
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $66.1 million to LEIDOS, INC. for work described as: SITE DEPLOYMENT OF MHS GENESIS TO IDENTIFIED MILITARY TREATMENT FACILITIES LOCATED IN THE SOUTHERN AND EASTERN PARTS OF THE UNITED STATES. Key points: 1. Contract value represents a significant investment in modernizing military healthcare IT infrastructure. 2. The fixed-price incentive contract structure aims to balance cost control with performance incentives. 3. Deployment scope covers multiple military treatment facilities, indicating a large-scale operational undertaking. 4. The contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle, suggesting potential for follow-on work. 5. The chosen contractor, Leidos, has a substantial presence in government IT services, implying relevant experience. 6. The project's success hinges on seamless integration with existing healthcare systems and user adoption.
Value Assessment
Rating: good
The contract value of $66.1 million for site deployment of MHS Genesis appears reasonable given the scale of the project, which involves multiple military treatment facilities across a wide geographic area. Benchmarking against similar large-scale IT system deployments within the federal government suggests that costs are within expected ranges. The fixed-price incentive (FPI) contract type allows for shared savings if costs are below target, providing a potential value-for-money incentive for the contractor. However, detailed cost breakdowns and comparisons to industry standards for similar IT services would be necessary for a more precise value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The specific number of bidders is not provided, but the full and open nature suggests a competitive process that should drive price discovery and potentially lead to more favorable terms for the government. The award being a delivery order under an IDIQ vehicle means the initial competition likely occurred when the IDIQ was established, with this order being placed based on pre-competed terms and conditions.
Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and better service quality. It ensures that the government is not limited to a single provider, maximizing the potential for cost savings and innovation.
Public Impact
Military personnel and their families will benefit from an upgraded electronic health record system, potentially improving the quality and continuity of care. The services delivered include the deployment and integration of the MHS Genesis system at identified military treatment facilities. The geographic impact is significant, covering facilities in the Southern and Eastern United States. Workforce implications may include the need for training for medical staff and IT personnel involved in the system's operation and maintenance.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if implementation challenges arise, given the FPI contract structure.
- Integration complexities with legacy systems could impact deployment timelines and effectiveness.
- User adoption and training challenges may hinder the realization of full system benefits.
- Cybersecurity risks associated with deploying a new, large-scale IT system in a sensitive environment.
Positive Signals
- Leidos has extensive experience in large-scale federal IT system deployments.
- The MHS Genesis system is a critical modernization effort for military healthcare.
- The fixed-price incentive contract provides a framework for cost control and performance.
- The full and open competition process suggests a robust selection of the most capable vendor.
Sector Analysis
The contract falls within the Computer Systems Design Services sector, a critical component of the broader IT services industry. This sector is characterized by high demand from government agencies seeking to modernize their technological infrastructure and improve operational efficiency. The market size for federal IT services is substantial, with agencies consistently investing in areas like electronic health records, cybersecurity, and cloud computing. This specific contract for MHS Genesis deployment is a key element of the Department of Defense's strategic initiative to standardize and enhance its healthcare IT capabilities, aligning with broader trends in digital transformation within healthcare.
Small Business Impact
This contract does not indicate any specific small business set-aside provisions or subcontracting requirements. The prime contractor, Leidos, is a large business. Without explicit set-aside goals or reporting on subcontracting, the direct impact on the small business ecosystem is unclear. However, large prime contractors often utilize small businesses for specialized services, so there may be indirect opportunities. Further analysis of subcontracting plans would be needed to fully assess the impact on small businesses.
Oversight & Accountability
Oversight for this contract is likely managed by the Defense Health Agency (DHA) and potentially the Department of Defense's Inspector General. The contract's fixed-price incentive structure includes performance metrics that would be monitored to ensure successful deployment and cost management. Transparency is facilitated through contract award databases and reporting requirements. Accountability measures are embedded in the contract terms, with potential financial implications for the contractor based on performance against incentive targets.
Related Government Programs
- MHS Genesis EHR Modernization
- Department of Defense IT Modernization Programs
- Federal Electronic Health Record Systems
- Defense Health Agency IT Contracts
Risk Flags
- Potential for schedule delays
- Integration complexity with legacy systems
- Cybersecurity risks
- User adoption challenges
Tags
it-services, computer-systems-design, defense, department-of-defense, defense-health-agency, electronic-health-records, fixed-price-incentive, full-and-open-competition, delivery-order, large-business, southern-us, eastern-us
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $66.1 million to LEIDOS, INC.. SITE DEPLOYMENT OF MHS GENESIS TO IDENTIFIED MILITARY TREATMENT FACILITIES LOCATED IN THE SOUTHERN AND EASTERN PARTS OF THE UNITED STATES.
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 $66.1 million.
What is the period of performance?
Start: 2021-01-01. End: 2026-01-31.
What is Leidos's track record with large-scale federal IT system deployments, particularly in the healthcare sector?
Leidos has a significant and extensive track record in delivering large-scale IT solutions for federal agencies, including the Department of Defense and the Department of Veterans Affairs. They have been involved in numerous complex system integrations, cybersecurity initiatives, and data management projects. Within the healthcare IT space, Leidos has experience with electronic health record (EHR) systems and other health information technology solutions. Their past performance on similar contracts, such as supporting the VA's EHR modernization efforts or managing large IT infrastructure projects, provides a basis for assessing their capability to execute the MHS Genesis deployment. A detailed review of their past performance evaluations and any associated contract disputes or challenges would offer further insight into their reliability and effectiveness in similar undertakings.
How does the pricing structure of this fixed-price incentive (FPI) contract compare to industry benchmarks for similar IT deployment services?
The fixed-price incentive (FPI) contract structure is designed to share cost savings between the government and the contractor if the final cost is below a target price, while also establishing a ceiling price. This structure aims to incentivize cost efficiency. Benchmarking FPI contracts for large-scale IT deployments can be complex due to variations in scope, complexity, and risk. However, generally, FPI contracts are considered more complex than firm-fixed-price (FFP) contracts and may command a slightly higher initial target price to account for the shared risk and incentive mechanisms. Without specific cost data and detailed scope comparisons, it's challenging to definitively state if the pricing is above or below market. However, the fact that it was awarded under full and open competition suggests that the proposed pricing was deemed competitive among qualified bidders.
What are the primary risks associated with the deployment of MHS Genesis at multiple military treatment facilities, and how are they being mitigated?
Key risks associated with the MHS Genesis deployment include technical integration challenges with existing legacy systems, potential data migration issues, cybersecurity vulnerabilities during the transition, user adoption hurdles due to the learning curve of a new system, and schedule delays impacting operational readiness. Mitigation strategies typically involve rigorous testing and validation phases, phased rollouts to minimize disruption, comprehensive training programs for end-users, robust cybersecurity protocols, and strong project management oversight. The FPI contract structure itself includes incentives for the contractor to manage costs and timelines effectively, indirectly mitigating some risks. The Defense Health Agency's active program management and oversight are crucial for identifying and addressing risks proactively throughout the deployment lifecycle.
What is the historical spending pattern for MHS Genesis or similar EHR modernization efforts within the Department of Defense?
The MHS Genesis program represents a significant and ongoing investment by the Department of Defense (DoD) in modernizing its healthcare IT infrastructure. Historical spending on EHR modernization efforts within the DoD, including the broader MHS Genesis program, has been substantial, often spanning multiple years and involving billions of dollars. These programs are characterized by long development and deployment cycles, complex integration requirements, and continuous updates and maintenance. The $66.1 million awarded in this specific delivery order is part of a larger, multi-year program. Understanding the total lifecycle cost of MHS Genesis, including previous and projected future expenditures for development, deployment, training, and sustainment, provides essential context for evaluating the value and efficiency of this particular contract award within the overall program's financial landscape.
How does the geographic scope (Southern and Eastern US) influence the complexity and cost of this MHS Genesis deployment?
Deploying the MHS Genesis system across facilities in the Southern and Eastern United States introduces logistical complexities and potentially higher costs compared to a more geographically concentrated deployment. Factors influencing this include the need to coordinate installation, training, and support across potentially dispersed locations, varying state-specific regulations or infrastructure, and the potential for different environmental conditions impacting hardware installation or network connectivity. Travel and on-site support costs for technical teams may increase. However, the DoD often operates with a distributed infrastructure, so managing geographically dispersed sites is a common operational challenge. The contract's structure and the contractor's experience in managing such distributed projects are key to addressing these complexities efficiently.
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: FIXED PRICE INCENTIVE (L)
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: $66,097,657
Exercised Options: $66,097,657
Current Obligation: $66,097,657
Subaward Activity
Number of Subawards: 22
Total Subaward Amount: $29,563,630
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: 2021-01-01
Current End Date: 2026-01-31
Potential End Date: 2026-01-31 00:00:00
Last Modified: 2025-11-05
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