DoD's Navy awards $144M enterprise support contract to Leidos, Inc. for computer systems design
Contract Overview
Contract Amount: $144,466,064 ($144.5M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2022-05-01
End Date: 2023-04-30
Contract Duration: 364 days
Daily Burn Rate: $396.9K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: SMIT BASE YEAR 2 (BY2) ENTERPRISE SUPPORT SERVICES
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $144.5 million to LEIDOS, INC. for work described as: SMIT BASE YEAR 2 (BY2) ENTERPRISE SUPPORT SERVICES Key points: 1. Contract value represents a significant investment in enterprise support services for the Department of the Navy. 2. The award was made under full and open competition, suggesting a competitive bidding process. 3. The contract type is Cost Plus Fixed Fee, which can introduce cost uncertainty if not managed closely. 4. The duration of the base year is 364 days, aligning with typical annual service contracts. 5. The contractor, Leidos, Inc., is a large, established entity in the federal contracting space. 6. The specific NAICS code (541512) indicates a focus on computer systems design and related services.
Value Assessment
Rating: good
The contract value of approximately $144.5 million for a one-year period for enterprise support services appears within a reasonable range for a contract of this scope and complexity, especially given the contractor's established presence. Benchmarking against similar large-scale IT support contracts within the Department of Defense suggests that the pricing structure, while Cost Plus Fixed Fee, is not inherently outliers. However, detailed cost breakdowns and performance metrics would be necessary for a more precise value-for-money assessment.
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 bids. The specific number of bidders is not provided, but this procurement method generally fosters a competitive environment, which can lead to better pricing and service offerings for the government. The open competition suggests that the Navy sought the best value proposition from the market.
Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple companies to bid, driving down costs and improving the quality of services received.
Public Impact
The Department of the Navy benefits from enhanced enterprise support services, crucial for its operational efficiency. The contract supports the delivery of computer systems design and related services. The primary impact is within the Department of Defense's IT infrastructure and operational capabilities. The workforce implications are likely concentrated within Leidos, Inc. and its subcontractors, potentially creating or sustaining jobs in the IT sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contracts require diligent oversight to manage costs effectively and prevent potential overruns.
- The absence of specific bidder numbers limits the assessment of the intensity of competition.
- The broad nature of 'enterprise support services' could encompass a wide range of activities, necessitating clear performance standards.
Positive Signals
- Award to an established contractor like Leidos, Inc. suggests a level of confidence in their capability to deliver.
- The use of full and open competition indicates a commitment to leveraging market forces for best value.
- The contract aligns with the Department of Defense's ongoing need for robust IT infrastructure and support.
Sector Analysis
This contract falls within the Computer Systems Design Services sector, a critical component of the broader Information Technology (IT) industry. This sector is characterized by rapid technological advancements and a high demand for specialized expertise in designing, developing, and managing complex IT systems. The market size for federal IT services is substantial, with agencies like the Department of Defense being major consumers. This contract represents a significant portion of spending within this specific service category for the Navy.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large prime contract awarded to Leidos, Inc., a major defense contractor, the primary impact on small businesses would likely be through subcontracting opportunities. The extent of small business subcontracting is not detailed here, but it is a common practice for large prime contractors to meet federal small business utilization goals.
Oversight & Accountability
Oversight for this contract would primarily reside with the Department of the Navy contracting officers and program managers. The Cost Plus Fixed Fee structure necessitates robust financial oversight to ensure costs are reasonable and allocable. Transparency is typically managed through contract reporting requirements and performance reviews. The Inspector General for the Department of Defense may have jurisdiction for audits and investigations related to potential fraud, waste, or abuse.
Related Government Programs
- Department of Defense Enterprise IT Services
- Navy IT Modernization Programs
- Computer Systems Design Services Contracts
- Federal IT Support Services
Risk Flags
- Cost Plus Fixed Fee contract type requires diligent oversight to manage potential cost overruns.
- Limited information on the number of bidders restricts the assessment of competitive intensity.
- The broad scope of 'enterprise support services' necessitates clear performance metrics and monitoring.
Tags
department-of-defense, department-of-the-navy, it-services, computer-systems-design, cost-plus-fixed-fee, full-and-open-competition, enterprise-support, leidos-inc, virginia, delivery-order
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $144.5 million to LEIDOS, INC.. SMIT BASE YEAR 2 (BY2) ENTERPRISE SUPPORT SERVICES
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 Navy).
What is the total obligated amount?
The obligated amount is $144.5 million.
What is the period of performance?
Start: 2022-05-01. End: 2023-04-30.
What is Leidos, Inc.'s track record with similar large-scale IT support contracts within the Department of Defense?
Leidos, Inc. has a substantial history of performing large-scale IT support and systems integration contracts for the Department of Defense and other federal agencies. They are a prime contractor on numerous complex programs, often involving enterprise resource planning (ERP) systems, network infrastructure management, cybersecurity, and cloud migration services. Their track record includes managing multi-billion dollar portfolios and delivering services across various military branches. While generally considered a capable contractor, like any large entity, they have experienced both successes and challenges on specific programs, which are often documented in contract performance reports and agency evaluations. A detailed review of their past performance on contracts with similar scope, complexity, and contract types (e.g., CPFF) would provide further insight into their reliability and effectiveness for this specific award.
How does the Cost Plus Fixed Fee (CPFF) contract type impact the value for money compared to other contract types for this service?
The Cost Plus Fixed Fee (CPFF) contract type is often used when the scope of work is not precisely defined or involves significant uncertainty, such as in research and development or complex system design. For the government, the 'cost' portion means the contractor is reimbursed for allowable costs, while the 'fixed fee' represents their profit, negotiated upfront. This can be advantageous if it allows for flexibility and innovation. However, it carries a higher risk of cost growth compared to fixed-price contracts, as the government bears the risk of cost overruns. Value for money under CPFF hinges heavily on robust government oversight, clear definition of allowable costs, and effective negotiation of the fixed fee. If costs escalate significantly beyond initial estimates, the overall value may be diminished unless the performance and outcomes are exceptionally strong and justify the increased expenditure.
What are the potential risks associated with a $144 million enterprise support services contract awarded under full and open competition?
Several risks are associated with a contract of this magnitude. Firstly, the Cost Plus Fixed Fee (CPFF) structure inherently carries a risk of cost escalation if not meticulously managed and overseen by the government. Secondly, while awarded under full and open competition, the specific number of bidders isn't detailed, which could indicate varying levels of competitive intensity. A lack of robust competition could lead to suboptimal pricing or service quality. Thirdly, the contractor, Leidos, Inc., while experienced, must deliver on complex enterprise support services; performance failures could disrupt critical Navy operations. Finally, the sheer scale of the contract means that any significant issues, whether technical, financial, or managerial, could have a substantial impact on the Navy's IT infrastructure and budget. Effective risk mitigation requires strong contract management, clear performance metrics, and proactive issue resolution.
How does this contract align with the Department of the Navy's broader IT modernization and digital transformation goals?
Enterprise support services are foundational to any IT modernization or digital transformation initiative. This contract, by providing essential computer systems design and related services, likely supports the Navy's efforts to maintain, upgrade, and integrate its complex IT infrastructure. Modernization often involves updating legacy systems, migrating to cloud environments, enhancing cybersecurity, and improving data analytics capabilities – all of which rely on robust enterprise support. The contractor's role could involve designing new systems, integrating existing ones, managing networks, and ensuring the overall health and performance of the IT environment. Therefore, this contract is likely a critical enabler, ensuring the underlying infrastructure is stable and capable enough to support the Navy's strategic digital transformation objectives.
What is the historical spending trend for similar enterprise support services within the Department of the Navy?
Historical spending on enterprise support services within the Department of the Navy has consistently been substantial, reflecting the vast and complex IT infrastructure required to support naval operations globally. Agencies like the Navy typically allocate significant portions of their IT budgets to maintaining and upgrading these systems. Spending in this category often fluctuates based on major modernization programs, cybersecurity imperatives, and shifts in technology. While the specific $144 million for this base year is a significant figure, it should be viewed within the context of the Navy's overall IT expenditure, which can run into billions annually. Analyzing multi-year spending patterns for similar NAICS codes (like 541512) and contract types within the Navy would reveal trends in investment, potential consolidation or expansion of services, and the prevalence of different contracting approaches.
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 - APLLICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 11951 FREEDOM DR FL 15, 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: $172,703,210
Exercised Options: $172,703,210
Current Obligation: $144,466,064
Actual Outlays: $138,789,760
Subaward Activity
Number of Subawards: 133
Total Subaward Amount: $91,671,932
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0003920D0054
IDV Type: IDC
Timeline
Start Date: 2022-05-01
Current End Date: 2023-04-30
Potential End Date: 2023-04-30 00:00:00
Last Modified: 2023-12-15
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