DoD's $24.5M IT contract to Leidos for IDE/GTN convergence shows fair value, but limited competition raises concerns
Contract Overview
Contract Amount: $24,563,108 ($24.6M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2019-11-26
End Date: 2025-03-31
Contract Duration: 1,952 days
Daily Burn Rate: $12.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 5
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: INTEGRATED DATA ENVIRONMENT/GLOBAL TRANSPORTATION NETWORK CONVERGENCE
Place of Performance
Location: SCOTT AFB, SAINT CLAIR County, ILLINOIS, 62225
State: Illinois Government Spending
Plain-Language Summary
Department of Defense obligated $24.6 million to LEIDOS, INC. for work described as: INTEGRATED DATA ENVIRONMENT/GLOBAL TRANSPORTATION NETWORK CONVERGENCE Key points: 1. Value appears reasonable given the scope of integrating complex IT systems. 2. Competition was limited, potentially impacting price discovery and taxpayer savings. 3. Contract duration and delivery order structure suggest ongoing program needs. 4. Performance context is critical for assessing the effectiveness of this IT integration. 5. Sector positioning is within the defense IT services market, a significant spending area. 6. The firm-fixed-price structure aims to control costs for the government.
Value Assessment
Rating: fair
The contract's total value of approximately $24.5 million over its period of performance appears within a reasonable range for large-scale IT integration projects. Benchmarking against similar large-scale IT modernization efforts within the Department of Defense suggests that the overall cost is not excessively high. However, without detailed breakdowns of labor categories, hours, and specific deliverables, a precise value-for-money assessment is challenging. The firm-fixed-price contract type 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, indicating that all responsible sources were permitted to submit offers. However, the data indicates only 5 bids were received, which is a moderate level of competition for a contract of this size and complexity. While full and open competition is the preferred method, a lower number of bidders can sometimes suggest barriers to entry or a specialized market, potentially limiting the government's ability to secure the lowest possible price.
Taxpayer Impact: A moderate number of bidders means taxpayers likely received a competitive price, but there may have been opportunities for even greater savings with broader participation.
Public Impact
The primary beneficiaries are the Department of Defense, specifically USTRANSCOM, through improved logistics and transportation network capabilities. The services delivered involve the integration of the Integrated Data Environment (IDE) and Global Transportation Network (GTN), crucial for modernizing military logistics. The geographic impact is primarily within the operational domain of USTRANSCOM, supporting global military movements. Workforce implications include the need for specialized IT professionals to manage and implement complex system integrations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited number of bidders (5) in a full and open competition could indicate potential market concentration or high barriers to entry.
- The contract spans several years, increasing the risk of scope creep or evolving technological requirements impacting cost and schedule.
- Complexity of integrating two major IT systems (IDE and GTN) presents inherent technical and execution risks.
Positive Signals
- Firm-fixed-price contract type helps mitigate cost overrun risks for the government.
- Awarded to a single contractor (Leidos, Inc.) suggests a potentially strong track record or specialized capability.
- The contract is a delivery order under a larger contract vehicle, implying a structured procurement process.
Sector Analysis
This contract falls within the Defense Information Technology (IT) services sector, a substantial segment of federal spending. The market for IT integration and modernization services for defense agencies is highly competitive, with major players vying for significant contracts. Leidos, Inc. is a prominent contractor in this space. The spending benchmark for similar large-scale defense IT modernization projects can range from tens to hundreds of millions of dollars, making this contract's value significant but not extraordinary within its context.
Small Business Impact
The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific benefits for small businesses mandated by this award. The prime contractor, Leidos, Inc., may engage small businesses as subcontractors based on their own procurement strategies, but this is not a requirement of this specific contract.
Oversight & Accountability
Oversight for this contract would typically fall under the purview of the Department of Defense's contracting and program management offices, specifically within USTRANSCOM. Accountability measures are embedded in the contract's performance work statement and delivery schedules. Transparency is generally maintained through contract award databases and reporting requirements, although detailed performance metrics may not always be publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Defense Information Technology Modernization Programs
- USTRANSCOM Logistics IT Systems
- Global Transportation Network (GTN) Modernization
- Integrated Data Environment (IDE) Development
- Federal IT Services Contracts
Risk Flags
- Moderate competition level
- Complexity of IT system integration
- Potential for scope creep over contract duration
Tags
it-services, defense, department-of-defense, ustranscom, firm-fixed-price, full-and-open-competition, delivery-order, large-contract, system-integration, logistics-it, illinois
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $24.6 million to LEIDOS, INC.. INTEGRATED DATA ENVIRONMENT/GLOBAL TRANSPORTATION NETWORK CONVERGENCE
Who is the contractor on this award?
The obligated recipient is LEIDOS, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (USTRANSCOM).
What is the total obligated amount?
The obligated amount is $24.6 million.
What is the period of performance?
Start: 2019-11-26. End: 2025-03-31.
What is Leidos, Inc.'s track record with similar large-scale IT integration contracts for the Department of Defense?
Leidos, Inc. has a significant history of performing large-scale IT integration and modernization contracts for the Department of Defense and other federal agencies. They are a major defense contractor known for their expertise in areas such as command and control systems, logistics IT, and cybersecurity. While specific performance details for every contract are not always public, Leidos generally holds a strong reputation for delivering complex solutions. However, like any large contractor, they have also faced scrutiny and performance challenges on certain projects. A deeper dive into past performance reviews and contract close-out reports for comparable USTRANSCOM or DoD IT contracts awarded to Leidos would provide a more granular understanding of their capabilities and reliability in this specific domain.
How does the $24.5 million value compare to similar IDE/GTN integration efforts or comparable DoD IT modernization projects?
The $24.5 million value for the IDE/GTN convergence contract appears to be a moderate investment for a significant IT integration effort within the Department of Defense. Large-scale IT modernization projects for DoD can easily reach hundreds of millions, or even billions, of dollars. For instance, major enterprise resource planning (ERP) system upgrades or network infrastructure overhauls often exceed this amount significantly. The value of this contract suggests a focused scope, possibly a specific phase of a larger initiative or the integration of particular components. Benchmarking against contracts for similar system integrations (e.g., logistics IT, data environment consolidation) within DoD over the past five years would reveal if the per-year cost or total cost is competitive, considering factors like contract duration, complexity, and the number of bidders.
What are the primary risks associated with integrating the Integrated Data Environment (IDE) and Global Transportation Network (GTN)?
The primary risks associated with integrating the IDE and GTN stem from the inherent complexity of merging two distinct, large-scale IT systems. Technical risks include data compatibility issues, interoperability challenges between different software architectures, and the potential for system failures or performance degradation during the integration process. Schedule risks are significant, as complex integrations often encounter unforeseen delays due to technical hurdles or changing requirements. Cost risks, while mitigated by the firm-fixed-price structure, can still arise from scope creep if requirements evolve or if initial cost estimations were inaccurate. Furthermore, there are operational risks related to ensuring the seamless transition of critical transportation and logistics functions without disrupting military operations. Cybersecurity risks are also paramount, as integrating data environments can create new vulnerabilities if not managed meticulously.
What is the expected impact of this contract on the efficiency and effectiveness of military logistics and transportation?
The successful integration of the IDE and GTN is expected to significantly enhance the efficiency and effectiveness of military logistics and transportation. The IDE aims to provide a common, accessible platform for data, while the GTN focuses on the operational network for moving assets. By converging these, the Department of Defense anticipates achieving better visibility over its global supply chain, enabling more informed decision-making, and improving the speed and accuracy of cargo movement. This convergence should lead to reduced redundancies, streamlined processes, and potentially lower transportation costs. Ultimately, it supports enhanced mission readiness by ensuring that personnel and equipment can be deployed and sustained more effectively during operations worldwide.
How has spending on IT services for USTRANSCOM evolved over the past five years, and does this contract represent a significant shift?
Analyzing historical spending patterns for USTRANSCOM's IT services over the past five years would provide crucial context for this $24.5 million contract. Federal procurement data (like FPDS or USASpending) can reveal trends in IT investments, including the types of services procured (e.g., software development, system integration, cloud services) and the primary contractors. If USTRANSCOM's IT spending has been steadily increasing, this contract might represent a continuation of that trend. If spending has been relatively flat or decreasing, a new large integration contract could signify a strategic shift towards modernization or a response to identified capability gaps. Without specific historical data, it's difficult to definitively state if this contract represents a significant shift, but large integration projects often indicate a strategic push towards improving core operational capabilities.
Given the firm-fixed-price (FFP) contract type, what are the potential implications for scope management and change orders?
The firm-fixed-price (FFP) contract type is designed to shift the risk of cost overruns from the government to the contractor, Leidos, Inc. This means the contractor is obligated to complete the work for the agreed-upon price, regardless of their actual costs. For scope management, an FFP contract necessitates a very clearly defined Performance Work Statement (PWS). Any deviation from this defined scope would typically require a formal change order, which would involve negotiation of additional cost and potentially schedule adjustments. While FFP provides cost certainty, it can sometimes lead to contractors being resistant to necessary changes or, conversely, to disputes over whether a requested modification constitutes a change or is within the original scope. Effective contract administration is crucial to manage scope and process any necessary changes fairly under an FFP arrangement.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: HTC71119RD006
Offers Received: 5
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 9737 WASHINGTONIAN BLVD, GAITHERSBURG, MD, 20878
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $25,705,058
Exercised Options: $24,611,768
Current Obligation: $24,563,108
Actual Outlays: $5,226,393
Subaward Activity
Number of Subawards: 39
Total Subaward Amount: $2,958,271
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HC102818D0013
IDV Type: IDC
Timeline
Start Date: 2019-11-26
Current End Date: 2025-03-31
Potential End Date: 2025-03-31 00:00:00
Last Modified: 2025-02-24
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