Leidos awarded $187M contract for MHS GENESIS - DIGITAL FIRST by Defense Health Agency
Contract Overview
Contract Amount: $187,358,451 ($187.4M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2023-09-29
End Date: 2026-07-28
Contract Duration: 1,033 days
Daily Burn Rate: $181.4K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: MHS GENESIS - DIGITAL FIRST
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $187.4 million to LEIDOS, INC. for work described as: MHS GENESIS - DIGITAL FIRST Key points: 1. Contract value of $187.4M over approximately 3 years. 2. Awarded under full and open competition. 3. Firm Fixed Price contract type suggests defined scope and cost control. 4. Computer Systems Design Services (NAICS 541512) is a common category for IT support. 5. Delivery Order award indicates it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 6. Contract duration of 1033 days. 7. No small business set-aside noted.
Value Assessment
Rating: good
The contract value of $187.4 million for approximately three years of service appears reasonable for a large-scale IT system implementation and support. Benchmarking against similar large IT system contracts within the federal government, particularly those involving healthcare IT, would provide a more precise value-for-money assessment. The firm fixed-price nature of the contract suggests that the government has a clear understanding of the scope and is seeking cost certainty, which is generally a positive indicator for value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The specific number of bidders is not provided, but full and open competition generally fosters a competitive environment, which can lead to better pricing and innovation. This approach is the government's preferred method for procurement, aiming to maximize competition and achieve the best value for taxpayers.
Taxpayer Impact: Full and open competition is the most advantageous for taxpayers as it maximizes the pool of potential offerors, driving down prices through competitive pressure and increasing the likelihood of receiving innovative solutions at a fair market price.
Public Impact
The primary beneficiaries are the Department of Defense and its healthcare providers, who will receive enhanced digital health services through the MHS GENESIS system. The contract supports the delivery of critical IT services for the Military Health System. The geographic impact is likely nationwide, supporting military health facilities across various locations. Workforce implications may include the need for specialized IT personnel to manage and implement the digital health solutions.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for scope creep if the 'DIGITAL FIRST' initiative evolves significantly beyond the initial contract parameters.
- Dependence on contractor performance for critical healthcare IT infrastructure.
- Integration challenges with existing or future DoD IT systems.
Positive Signals
- Firm Fixed Price contract type provides cost certainty.
- Full and open competition suggests a robust bidding process.
- Award to a known entity (Leidos) may indicate prior experience with similar systems.
Sector Analysis
The IT services sector, particularly within government contracting, is highly competitive. This contract falls under computer systems design services, a segment focused on planning and designing computer systems that integrate hardware, software, and communication technologies. The market size for federal IT services is substantial, with agencies like the Department of Defense being major spenders. This contract for MHS GENESIS - DIGITAL FIRST aligns with the government's ongoing efforts to modernize its IT infrastructure and improve digital service delivery.
Small Business Impact
The contract was awarded under full and open competition and does not indicate any specific small business set-aside. This suggests that large businesses were likely the primary bidders. There is no explicit information on subcontracting plans for small businesses within this award notice. Without specific subcontracting goals or set-asides, the direct impact on the small business ecosystem for this particular contract is likely limited, though Leidos may engage small businesses as subcontractors.
Oversight & Accountability
Oversight for this contract will likely be managed by the Defense Health Agency (DHA) contracting officers and program managers. The firm fixed-price nature of the contract provides a degree of accountability for cost. Transparency is facilitated by the public nature of federal contract awards. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.
Related Government Programs
- MHS GENESIS Electronic Health Record System
- Department of Defense IT Modernization Programs
- Healthcare IT Services Contracts
- Federal Civilian Health IT Spending
Risk Flags
- Potential for cost overruns if scope is not tightly managed.
- Risk of performance issues impacting critical healthcare operations.
- Cybersecurity vulnerabilities could compromise sensitive patient data.
Tags
it-services, defense, department-of-defense, defense-health-agency, computer-systems-design-services, full-and-open-competition, firm-fixed-price, delivery-order, large-contract, healthcare-it, mhs-genesis, leidos-inc
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $187.4 million to LEIDOS, INC.. MHS GENESIS - DIGITAL FIRST
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 $187.4 million.
What is the period of performance?
Start: 2023-09-29. End: 2026-07-28.
What is the historical spending by the Defense Health Agency on IT services similar to this contract?
The Defense Health Agency (DHA) has a significant history of investing in IT services to support the Military Health System (MHS). While specific historical spending figures for contracts directly comparable to 'MHS GENESIS - DIGITAL FIRST' require detailed analysis of past solicitations and awards, the DHA's overall IT budget is substantial, often in the billions of dollars annually. This includes expenditures on electronic health records (EHRs), network infrastructure, cybersecurity, and various health IT applications. Analyzing trends in DHA's IT procurement over the past 5-10 years would reveal a consistent demand for system design, integration, and support services, with a growing emphasis on digital transformation and data analytics, making this $187.4 million award a notable, but not unprecedented, investment within that broader context.
How does the pricing structure (Firm Fixed Price) compare to other large federal IT contracts?
A Firm Fixed Price (FFP) contract structure is common for federal IT projects where the scope of work is well-defined and risks are understood. Compared to other contract types like Cost-Plus-Fixed-Fee (CPFF) or Time and Materials (T&M), FFP places more cost risk on the contractor. This structure is generally favored by agencies when they seek budget certainty and want to avoid cost overruns. For large federal IT contracts, FFP is often used for system development, implementation, and sustainment phases where requirements are stable. While it can lead to higher initial bids due to contractor risk premiums, it often results in better overall cost control for the government if the scope is managed effectively. The $187.4 million award to Leidos utilizes this structure, aligning with standard government practices for managing large IT investments.
What are the key performance indicators (KPIs) likely being used to evaluate Leidos's performance on this contract?
For a contract like 'MHS GENESIS - DIGITAL FIRST,' key performance indicators (KPIs) would likely focus on system availability, performance, security, and user satisfaction. Specific metrics could include system uptime percentages (e.g., 99.9% availability), response times for critical functions, successful data integration rates, adherence to cybersecurity protocols (e.g., zero critical vulnerabilities), and timely resolution of reported issues. User feedback surveys from healthcare providers and administrators would also be crucial. The contract's success would be measured against these defined KPIs, with potential for award fees or penalties tied to performance outcomes, ensuring the contractor meets the stringent requirements of a critical healthcare IT system.
What is Leidos's track record with similar large-scale IT system implementations for the Department of Defense?
Leidos has a substantial track record of delivering large-scale IT solutions and services to the Department of Defense (DoD) and other federal agencies. They have been involved in numerous complex projects, including enterprise resource planning (ERP) systems, network modernization, cybersecurity solutions, and data analytics platforms. Notably, Leidos has been a significant contractor for the MHS GENESIS program itself, providing various services related to its development and implementation. Their experience with the DoD's unique requirements, security protocols, and large-scale IT infrastructure suggests a strong capability to manage contracts of this magnitude and complexity. Past performance evaluations and contract awards provide evidence of their capacity to handle such critical systems.
How does the $187.4 million contract value compare to the overall MHS GENESIS program budget or spending?
The $187.4 million awarded to Leidos for 'MHS GENESIS - DIGITAL FIRST' represents a specific delivery order, likely for a defined phase or set of services within the broader MHS GENESIS program. The total lifecycle cost of the MHS GENESIS program, encompassing development, deployment, sustainment, and upgrades across all military branches, is significantly higher, often estimated in the billions of dollars. Therefore, this $187.4 million award should be viewed as a component of a much larger, multi-year investment. Comparing this single award to the overall program budget highlights its significance as a substantial funding allocation for specific IT modernization efforts within the MHS, but it is not indicative of the total program expenditure.
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: FIRM FIXED PRICE (J)
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: $245,503,572
Exercised Options: $245,503,572
Current Obligation: $187,358,451
Actual Outlays: $20,210,349
Subaward Activity
Number of Subawards: 16
Total Subaward Amount: $109,577,097
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: 2023-09-29
Current End Date: 2026-07-28
Potential End Date: 2026-07-28 00:00:00
Last Modified: 2025-07-29
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