DoD Awards $573M for MHS Genesis Stage 9 to Leidos, Inc
Contract Overview
Contract Amount: $572,997,098 ($573.0M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2023-07-29
End Date: 2025-07-28
Contract Duration: 730 days
Daily Burn Rate: $784.9K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIXED PRICE AWARD FEE
Sector: IT
Official Description: ENTERPRISE ACTIVITIES FOR MHS GENESIS-STAGE 9
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $573.0 million to LEIDOS, INC. for work described as: ENTERPRISE ACTIVITIES FOR MHS GENESIS-STAGE 9 Key points: 1. Significant contract value of $573 million for enterprise activities. 2. Leidos, Inc. is the sole awardee, raising questions about competition. 3. Potential risk associated with a single vendor for critical health system. 4. IT sector spending, specifically computer systems design services.
Value Assessment
Rating: fair
The award fee structure suggests performance-based incentives. However, without specific performance metrics or benchmarks, assessing the value for money is challenging. The fixed-price component provides some cost certainty.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is positive for price discovery. However, it is a delivery order, implying a broader contract vehicle was used.
Taxpayer Impact: Taxpayer funds are being used for a critical defense health system upgrade, with the cost reflecting the complexity and scope of the enterprise activities.
Public Impact
Impacts the health records and IT infrastructure for the Military Health System. Ensures continued modernization and functionality of a vital healthcare system for service members. Potential for improved healthcare delivery and data management through system upgrades.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of specific performance metrics for award fee.
- Single awardee for a critical system.
- Potential for vendor lock-in.
Positive Signals
- Awarded under full and open competition.
- Fixed Price Award Fee structure incentivizes performance.
- Long-term contract duration for stability.
Sector Analysis
This contract falls within the IT sector, specifically computer systems design services. Spending in this area is substantial across government, supporting modernization and operational needs. Benchmarks for similar large-scale IT system development and integration contracts are typically in the hundreds of millions.
Small Business Impact
The data indicates that small businesses were not directly involved in this specific award. Further analysis would be needed to determine if subcontracting opportunities exist or if small businesses were involved in the broader contract vehicle.
Oversight & Accountability
Oversight will be crucial to ensure Leidos meets performance requirements and that the award fee structure effectively drives desired outcomes. Regular reviews of system implementation and cost performance are necessary.
Related Government Programs
- Computer Systems Design Services
- Department of Defense Contracting
- Defense Health Agency Programs
Risk Flags
- Potential for cost overruns if award fee criteria are not strictly managed.
- Dependency on a single contractor for a critical system.
- Limited visibility into specific performance metrics driving the award fee.
- Lack of small business participation noted in the award data.
Tags
computer-systems-design-services, department-of-defense, va, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $573.0 million to LEIDOS, INC.. ENTERPRISE ACTIVITIES FOR MHS GENESIS-STAGE 9
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 $573.0 million.
What is the period of performance?
Start: 2023-07-29. End: 2025-07-28.
How will the award fee structure be evaluated to ensure fair compensation for performance and prevent overpayment?
The effectiveness of the award fee structure hinges on clearly defined, measurable, and objective performance criteria. The Defense Health Agency must establish robust evaluation processes to assess Leidos's performance against these criteria. Transparency in the evaluation and fee determination process is essential for accountability and to ensure taxpayer funds are used efficiently, aligning payments with demonstrated value and successful delivery of MHS Genesis Stage 9 objectives.
What are the risks associated with a single awardee for such a critical and complex IT system like MHS Genesis?
A single awardee presents risks such as vendor lock-in, reduced leverage for future negotiations, and potential disruption if the vendor faces financial or operational challenges. Dependency on one company can also stifle innovation if alternative solutions are not explored. Mitigation strategies include strong contract management, clear exit clauses, and potentially fostering a competitive environment for future phases or related services.
How does this contract contribute to the overall effectiveness and modernization goals of the Military Health System's IT infrastructure?
This contract is crucial for the continued development and implementation of MHS Genesis, the DoD's modern electronic health record system. Stage 9 likely addresses specific enterprise activities essential for system integration, data management, and user support. Successful execution is vital for achieving the system's goals of improving healthcare delivery, enhancing interoperability, and providing comprehensive health data for service members.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - DELIVERY
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Pricing Type: FIXED PRICE AWARD FEE (M)
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: $677,356,792
Exercised Options: $576,216,720
Current Obligation: $572,997,098
Actual Outlays: $216,151,927
Subaward Activity
Number of Subawards: 47
Total Subaward Amount: $142,948,293
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: 2023-07-29
Current End Date: 2025-07-28
Potential End Date: 2025-07-28 00:00:00
Last Modified: 2025-07-29
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