Leidos awarded $36.3M for MHS Genesis product improvement, focusing on agile development and testing
Contract Overview
Contract Amount: $36,259,115 ($36.3M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2021-03-01
End Date: 2025-06-30
Contract Duration: 1,582 days
Daily Burn Rate: $22.9K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS INCENTIVE FEE
Sector: IT
Official Description: PRODUCT IMPROVEMENT ENGINEERING TO SUPPORT THE AGILE DEVELOPMENT, CONFIGURATION, AND TEST OF NEW CAPABILITIES FOR MHS GENESIS.
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $36.3 million to LEIDOS, INC. for work described as: PRODUCT IMPROVEMENT ENGINEERING TO SUPPORT THE AGILE DEVELOPMENT, CONFIGURATION, AND TEST OF NEW CAPABILITIES FOR MHS GENESIS. Key points: 1. Contract value represents a significant investment in modernizing military health systems. 2. Agile development approach suggests a focus on iterative improvements and adaptability. 3. The contract's duration indicates a long-term commitment to system enhancement. 4. Performance-based contract type (Cost Plus Incentive Fee) incentivizes efficiency and results. 5. This award falls within the broader category of IT services for government health platforms.
Value Assessment
Rating: good
The contract value of $36.3 million over approximately 3.5 years for product improvement engineering is within a reasonable range for complex IT development projects supporting critical government systems. Benchmarking against similar contracts for large-scale health IT modernization efforts suggests that the pricing is competitive, especially considering the specialized nature of supporting MHS Genesis. The Cost Plus Incentive Fee (CPIF) structure allows for cost savings to be shared, potentially leading to better value for the government if performance targets are met.
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 environment that should drive fair pricing and innovation. This approach is generally preferred for ensuring the government receives the best possible value by leveraging the widest range of market capabilities.
Taxpayer Impact: Full and open competition maximizes taxpayer value by fostering a competitive environment that encourages lower bids and higher quality services, preventing potential overspending associated with less competitive procurement methods.
Public Impact
Service members and veterans will benefit from improved functionality and reliability of the MHS Genesis electronic health record system. Enhanced capabilities in agile development, configuration, and testing will lead to a more robust and responsive healthcare IT infrastructure. The project's impact is national, supporting the healthcare delivery across the Department of Defense. Workforce implications include the need for specialized IT professionals in software development, testing, and system integration.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if incentive targets are not met or if scope creep occurs within the agile framework.
- Dependence on a single contractor (Leidos) for critical product improvement could pose a risk if performance falters.
- The complexity of MHS Genesis integration with existing systems presents inherent technical challenges.
Positive Signals
- Agile development methodology allows for flexibility and adaptation to evolving requirements, potentially leading to a more effective final product.
- The use of a Cost Plus Incentive Fee contract structure incentivizes the contractor to achieve performance goals efficiently.
- Leidos has a significant track record in large-scale government IT projects, suggesting experience relevant to this undertaking.
Sector Analysis
This contract falls within the Information Technology (IT) sector, specifically focusing on software development and systems integration for healthcare. The market for government health IT is substantial, driven by the need for secure, interoperable, and efficient electronic health record systems. Comparable spending benchmarks in this area often involve multi-year contracts for system development, maintenance, and enhancement, with values ranging from tens to hundreds of millions of dollars depending on the scope and complexity.
Small Business Impact
The contract data indicates that small business participation was not a primary set-aside consideration for this specific award (ss: false, sb: false). While Leidos, Inc. is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will depend on Leidos's strategy and the specific needs for specialized services, but it is not mandated by the prime contract's structure.
Oversight & Accountability
Oversight for this contract is likely managed by the Defense Health Agency (DHA) program office, with potential involvement from the Department of Defense's Inspector General for audits and investigations. Accountability measures are embedded within the Cost Plus Incentive Fee (CPIF) structure, which ties contractor payment to performance metrics. Transparency is facilitated through contract reporting requirements and public contract databases, though detailed performance data may be limited.
Related Government Programs
- MHS Genesis EHR Modernization
- Department of Defense IT Modernization Programs
- Healthcare IT Services Contracts
- Agile Software Development Contracts
- Defense Health Agency IT Support
Risk Flags
- Potential for scope creep in agile development.
- Dependency on contractor performance for critical system updates.
- Complexity of integrating new capabilities into a large existing system.
Tags
it, defense, healthcare-it, software-development, full-and-open-competition, cost-plus-incentive-fee, department-of-defense, defense-health-agency, product-improvement, agile-development, systems-integration, virginia
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $36.3 million to LEIDOS, INC.. PRODUCT IMPROVEMENT ENGINEERING TO SUPPORT THE AGILE DEVELOPMENT, CONFIGURATION, AND TEST OF NEW CAPABILITIES FOR MHS GENESIS.
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 $36.3 million.
What is the period of performance?
Start: 2021-03-01. End: 2025-06-30.
What is Leidos's track record with large-scale Department of Defense IT projects, particularly in healthcare?
Leidos has a substantial history of supporting the Department of Defense (DoD) with complex IT initiatives. They have been a key player in the MHS Genesis program itself, providing various services. Their experience extends to other large-scale federal IT projects, including those within healthcare and logistics. This includes system development, integration, cybersecurity, and sustainment. Their extensive portfolio suggests a deep understanding of the DoD's unique requirements, security protocols, and operational environments, making them a well-established contractor for critical defense IT infrastructure.
How does the Cost Plus Incentive Fee (CPIF) structure compare to other contract types for this kind of work?
The Cost Plus Incentive Fee (CPIF) contract is a type of cost-reimbursement contract where the contractor is reimbursed for allowable costs and receives a target fee, but the final fee is adjusted based on performance against pre-determined targets (e.g., cost, schedule, performance). This differs from Fixed Price contracts, where the price is set regardless of costs, and Cost Plus Fixed Fee (CPFF), where the fee is fixed. For complex, evolving projects like product improvement engineering where exact costs and outcomes are hard to predict, CPIF offers flexibility. It incentivizes the contractor to control costs and meet objectives, potentially offering better value than CPFF, while still accommodating uncertainties better than fixed-price options.
What are the primary risks associated with the agile development approach in this context?
While agile development offers flexibility, key risks in this context include potential scope creep if requirements are not managed rigorously, leading to increased costs and extended timelines. There's also a risk of fragmented development if integration points are not clearly defined and tested early and often. Ensuring consistent adherence to security protocols throughout iterative development cycles is crucial. Furthermore, the success of agile relies heavily on effective communication and collaboration between the government stakeholders and the contractor team; breakdowns in this communication can hinder progress and lead to misaligned expectations or suboptimal solutions.
How does this contract's spending compare to previous investments in MHS Genesis or similar EHR systems?
The $36.3 million awarded to Leidos represents a specific investment in the ongoing product improvement and agile development for MHS Genesis. It's important to note that the total lifecycle cost of a system like MHS Genesis, including initial development, deployment, sustainment, and continuous improvement, is significantly higher. Previous investments in MHS Genesis and its predecessor systems (like AHLTA) have amounted to billions of dollars over many years. This particular award is a component of the broader sustainment and enhancement strategy, focusing on iterative upgrades rather than a one-time large expenditure. Comparing it requires looking at annual sustainment and modernization budgets for large EHR systems.
What are the potential implications of this contract for the future of military healthcare IT?
This contract signifies a continued commitment to the MHS Genesis platform as the future of military healthcare IT. The emphasis on agile development suggests a move towards more adaptive, responsive systems that can quickly incorporate new technologies and user feedback. This approach aims to ensure the system remains current and effective in meeting the evolving healthcare needs of service members and veterans. Successful execution could lead to a more integrated, efficient, and user-friendly healthcare experience, potentially serving as a model for other large-scale government IT modernization efforts.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: IT AND TELECOM - APLLICATIONS
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: $36,259,115
Exercised Options: $36,259,115
Current Obligation: $36,259,115
Actual Outlays: $4,264
Subaward Activity
Number of Subawards: 68
Total Subaward Amount: $28,066,534
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: 2021-03-01
Current End Date: 2025-06-30
Potential End Date: 2025-06-30 00:00:00
Last Modified: 2025-05-08
More Contracts from Leidos, Inc.
- Science Operation and Maintenance Support for the United States Antarctic Program — $3.1B (National Science Foundation)
- Provide Funding for Clin 302 for Pre-Flight and In-Flight Services. Contract Number Dtfawa-05-C-00031, Lockheed Martin. POP 01/16/08-03/31/08 — $1.9B (Department of Transportation)
- THE Facilities Development and Operations Contract(fdoc) Specifies Technical, Managerial, and Adminstrative Work Needed to Ensure the Availablitity, Integrity, and Reliability of Missionoperations Facilites Supporting National Aeronautics and Space Administration (nasa) Human Space Flight (HSF) Programs Requiring Mission Operations Support. the Objective of This Contract IS to Consolidate Efforts Across the Facilities Covered Under Fodoc in Order to Maximize Synergy for Hardware and Software Development, Modification, Sustaining. Maintenance, Reconfiguration, and Operations for the Purpose of Reducing Cost Without Compromising Facility Functionality and Performance. Nasa Will Collaborate With the Contractor on Developing Procedural and Technical Innovations That Improve Quality, Ensure Customer Satisfaction and Reduce Cost. Mission Operations Facilities Currently Support the Space Shuttle Programand the International Space Station Progra, Including International Partner and Commmercial Visiting Vehicles. Mission Operations Facilities Supporting the Cnstellation Program(cxp) ARE Continuously Under Development in Concert With CXP Formulation and Implementation. Fdoc Applies to the Facilities of These Three Programs, and ANY Other HSF Program Requiring Mission Operations Facility Support. in Addition, Future Mission Operations Facilities and Capabilities ARE Within the Technical Scope of This SOW, and Fdoc Worlk Associated With These Facilities Will BE Enabled Through Idiq — $1.3B (National Aeronautics and Space Administration)
- National Airspace System (NAS) Implementation Support Contract (nisc). Provides Engineering and Technical Support Services to FAA Organizations Responsible for NAS Transformation, Integration and Implementation in the Areas of Implementation and Integration Planning, Transition Planning, Engineering Support, Environmental Support, Automation Support and Other Engineering and Technical Disciplines AS Required. TAS::69 8107::TAS — $1.1B (Department of Transportation)
- Itssc Task Order for Systems — $1.1B (Social Security Administration)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)