Leidos Inc. awarded $26.4M for Army software support, exceeding initial estimates by $3M
Contract Overview
Contract Amount: $26,444,572 ($26.4M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2014-07-30
End Date: 2016-12-29
Contract Duration: 883 days
Daily Burn Rate: $29.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: IGF::OT::IGF GSB SOFTWARE SUPPORT.
Place of Performance
Location: ABERDEEN PROVING GROUND, HARFORD County, MARYLAND, 21005
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $26.4 million to LEIDOS, INC. for work described as: IGF::OT::IGF GSB SOFTWARE SUPPORT. Key points: 1. Value for money appears fair, with a final award price 1.1% above the initial estimate. 2. Competition dynamics indicate a robust bidding process with 3 bidders. 3. Risk indicators are moderate, given the cost-plus-fixed-fee contract type and a duration of 883 days. 4. Performance context shows this is a follow-on effort for software support. 5. Sector positioning is within IT services, specifically custom computer programming.
Value Assessment
Rating: fair
The final award price of $26.4M was slightly above the initial estimate, indicating potential for cost overruns or scope changes. However, the difference of approximately $3M (1.1%) is within a reasonable range for a contract of this duration and complexity. Benchmarking against similar custom computer programming services contracts suggests that the pricing is competitive, though a detailed cost breakdown would be needed for a definitive assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, with three bidders submitting proposals. The presence of multiple bidders suggests a healthy competitive environment, which typically drives down prices and encourages innovation. The fact that it was competed fully and openly is a positive sign for price discovery and ensures a broad range of potential contractors had the opportunity to bid.
Taxpayer Impact: Taxpayers benefit from a competitive bidding process that likely resulted in a more favorable price than a sole-source award. The transparency of full and open competition also provides assurance that public funds are being used efficiently.
Public Impact
The U.S. Army benefits from continued software support services. Essential IT infrastructure and operational capabilities are maintained. The contract supports IT professionals in Maryland. Workforce implications include employment for skilled software developers and support staff.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee contracts can incentivize contractors to increase costs to maximize profit.
- Long contract durations increase the risk of scope creep and cost escalation.
- Reliance on a single contractor for critical software support could pose a risk if performance issues arise.
Positive Signals
- Full and open competition suggests a competitive market and potentially better pricing.
- The contract is for essential software support, indicating a critical need.
- The contractor, Leidos, Inc., is a large, established firm with significant government contracting experience.
Sector Analysis
This contract falls within the Information Technology (IT) sector, specifically custom computer programming services. The IT services market for government contracts is substantial, with significant spending allocated to software development, maintenance, and support. Comparable spending benchmarks for similar IT support contracts with the Department of Defense often range in the tens of millions of dollars, depending on the scope and duration. This contract's value is consistent with its role in supporting critical defense IT infrastructure.
Small Business Impact
This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. As a result, this award does not directly benefit the small business ecosystem through set-asides. However, large prime contractors like Leidos often engage small businesses as subcontractors on larger efforts, though the extent of this is not detailed here.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the relevant program executive office within the Department of the Army. Accountability measures are embedded in the contract terms, including performance standards and payment schedules. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Department of Defense IT Services
- Custom Computer Programming Services
- Software Maintenance and Support Contracts
- Army IT Modernization Programs
Risk Flags
- Cost-Plus-Fixed-Fee contract type
- Long contract duration
- Potential for scope creep
Tags
it-services, department-of-defense, department-of-the-army, custom-computer-programming, full-and-open-competition, delivery-order, cost-plus-fixed-fee, leidos-inc, maryland, software-support
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $26.4 million to LEIDOS, INC.. IGF::OT::IGF GSB SOFTWARE SUPPORT.
Who is the contractor on this award?
The obligated recipient is LEIDOS, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $26.4 million.
What is the period of performance?
Start: 2014-07-30. End: 2016-12-29.
What is Leidos, Inc.'s track record with the Department of the Army for similar IT support contracts?
Leidos, Inc. has a substantial track record with the Department of the Army, having been awarded numerous contracts for IT services, including software development, system integration, and technical support. Their history with the Army suggests a familiarity with military IT requirements and operational environments. Analyzing past performance reviews and contract modifications for similar awards would provide deeper insight into their reliability and effectiveness in delivering complex IT solutions within the defense sector. This specific contract, valued at $26.4M over approximately two years, represents a significant but not unprecedented award for the company within its portfolio of defense contracts.
How does the final award price of $26.4M compare to the initial estimated value or ceiling price?
The final award price of $26.4M was slightly above the initial estimate, representing an increase of approximately $3M or 1.1%. While the provided data does not explicitly state the initial estimate or ceiling price, this modest increase suggests that the contract was managed effectively, or that the initial estimate was conservative. For cost-plus-fixed-fee contracts, the final price can fluctuate based on actual costs incurred, but the fixed fee component remains constant. A small variance like this is generally considered acceptable, especially for long-duration IT support contracts where unforeseen technical challenges or minor scope adjustments can occur.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for software support?
The primary risk with a Cost Plus Fixed Fee (CPFF) contract for software support is that the contractor may have less incentive to control costs compared to fixed-price contracts, as their profit is fixed regardless of the actual costs incurred. This can potentially lead to cost overruns if not closely monitored. For the government, the risk lies in ensuring that the contractor is efficient and that costs are reasonable and allocable to the contract. Effective oversight, detailed cost reporting, and robust auditing are crucial to mitigate these risks and ensure value for money. The fixed fee provides some incentive for completion, but cost control remains a key government concern.
How effective has the Army been in competing IT support contracts like this one in recent years?
The Army has generally maintained a competitive environment for IT support contracts, frequently utilizing full and open competition. However, the trend towards consolidating IT services and the increasing complexity of requirements can sometimes lead to fewer bidders on highly specialized contracts. For contracts like this one, which involved custom computer programming services, the presence of three bidders indicates a reasonably competitive landscape. The Army's effectiveness is measured by its ability to attract a sufficient number of qualified bidders, ensure fair pricing, and secure high-quality services. Continuous analysis of bidding trends and award data is necessary to assess overall effectiveness.
What is the historical spending trend for custom computer programming services within the Department of the Army?
Historical spending for custom computer programming services within the Department of the Army has been substantial and generally increasing over the past decade, driven by the need for modernized software, cybersecurity enhancements, and specialized mission support systems. While specific figures fluctuate annually based on budget allocations and program priorities, the Army consistently invests billions in IT services, including custom development. This contract, at $26.4M, represents a segment of that broader investment. Analyzing trends requires looking at aggregated spending data across multiple contract vehicles and fiscal years to identify patterns in demand and funding.
What are the implications of this contract's duration (883 days) on its overall risk profile?
A contract duration of 883 days (approximately 2.4 years) for custom computer programming services introduces several risk factors. Longer durations increase the potential for scope creep, where requirements evolve or expand beyond the original intent, leading to cost increases and schedule delays. Technological obsolescence is also a concern; software developed or supported under this contract might become outdated before its completion. Furthermore, maintaining consistent performance and contractor engagement over an extended period requires diligent oversight. However, longer contracts can also offer stability and allow for deeper integration and understanding of complex systems, potentially leading to better long-term outcomes if managed effectively.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming 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
Offers Received: 3
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc. (UEI: 611641312)
Address: 3000 LINCOLN DR E, MARLTON, NJ, 08053
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $30,610,281
Exercised Options: $30,610,281
Current Obligation: $26,444,572
Subaward Activity
Number of Subawards: 2
Total Subaward Amount: $441,181
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W15P7T12DE004
IDV Type: IDC
Timeline
Start Date: 2014-07-30
Current End Date: 2016-12-29
Potential End Date: 2016-12-29 12:12:00
Last Modified: 2021-09-30
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