DoD awards $148M for Tomahawk missile systems engineering, raising cost concerns
Contract Overview
Contract Amount: $22,388,060 ($22.4M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2000-12-21
End Date: 2005-12-31
Contract Duration: 1,836 days
Daily Burn Rate: $12.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: 200103!000097!1700!AT711 !NAVAL AIR SYSTEMS COMMAND !N0001901C0044 !A!N!*!N! !20001221!20041231!148095086!148095086!054781240!N!SCIENCE APPLICATIONS INTERNATI!10260 CAMPUS POINT DRIVE, !SAN DIEGO !CA!92121!46725!037!24!LEXINGTON PARK !ST. MARY S !MARYLAND !+000005893000!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A2 !MISSILE AND SPACE SYSTEMS !2CNY!BGM-109 TOMAHAWK !541330!*!*!3! ! ! !*!*!*!B!*!*!A! !D !N!U!1!001!N!1B!Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! !Y! ! !0001!
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $22.4 million to LEIDOS, INC. for work described as: 200103!000097!1700!AT711 !NAVAL AIR SYSTEMS COMMAND !N0001901C0044 !A!N!*!N! !20001221!20041231!148095086!148095086!054781240!N!SCIENCE APPLICATIONS INTERNATI!10260 CAMPUS POINT DRIVE, !SAN DIEGO !CA!92121!46725!037!24!LEXINGTON PARK !ST. M… Key points: 1. Contract awarded for critical missile systems engineering. 2. Significant portion of contract value allocated to engineering services. 3. Sole-source award raises questions about price discovery and competition. 4. Potential for cost overruns given the contract type and duration.
Value Assessment
Rating: questionable
The contract's total value is $148,095,086. While specific per-unit costs are not provided, the Cost Plus Fixed Fee structure for a nearly 5-year duration suggests potential for cost escalation beyond initial estimates.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was awarded on a sole-source basis, limiting opportunities for competitive bidding. This approach may have hindered price discovery and potentially led to a higher overall cost for the government.
Taxpayer Impact: The sole-source nature of this award limits competitive pressure, potentially increasing the financial burden on taxpayers for these critical engineering services.
Public Impact
Impacts the development and sustainment of the BGM-109 Tomahawk missile system. Affects the Department of Defense's strategic missile capabilities. Potential for taxpayer funds to be used inefficiently due to lack of competition.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Long contract duration (nearly 5 years)
- Lack of small business participation
Positive Signals
- Supports critical defense systems (Tomahawk missile)
- Awarded to a known entity in the defense sector
Sector Analysis
This contract falls within the Engineering Services sector, specifically supporting missile and space systems. Defense engineering services are often complex and can involve significant R&D, making competitive benchmarking challenging.
Small Business Impact
The data indicates no specific small business set-aside or participation. Given the sole-source nature and the specialized services required, small businesses may have been excluded from this opportunity.
Oversight & Accountability
The contract was awarded by the Naval Air Systems Command. Oversight would typically involve contract management by the Defense Contract Management Agency to ensure performance and cost control, especially given the CPFF structure.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award limits competition.
- Cost Plus Fixed Fee structure poses cost overrun risk.
- Long contract duration increases risk exposure.
- Lack of small business participation.
- Potential for inefficient use of taxpayer funds.
Tags
engineering-services, department-of-defense, va, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $22.4 million to LEIDOS, INC.. 200103!000097!1700!AT711 !NAVAL AIR SYSTEMS COMMAND !N0001901C0044 !A!N!*!N! !20001221!20041231!148095086!148095086!054781240!N!SCIENCE APPLICATIONS INTERNATI!10260 CAMPUS POINT DRIVE, !SAN DIEGO !CA!92121!46725!037!24!LEXINGTON PARK !ST. MARY S !MARYLAND !+000005893000!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A2 !MISSILE AND SPACE SYSTEMS !2CNY!BGM-109 TOMAHAWK !541330!*!*!3! ! ! !*!*!*!B!*!*!A!
Who is the contractor on this award?
The obligated recipient is LEIDOS, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $22.4 million.
What is the period of performance?
Start: 2000-12-21. End: 2005-12-31.
What was the justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?
The justification for a sole-source award is crucial for understanding the necessity of bypassing full and open competition. Agencies typically cite reasons such as urgency, unique capabilities, or lack of viable alternatives. Without this justification, it's difficult to assess if taxpayers received the best possible value or if competition could have yielded better pricing and innovation.
How does the Cost Plus Fixed Fee structure impact cost control and potential for overruns in this specific contract?
The Cost Plus Fixed Fee (CPFF) structure allows the contractor to recover all allowable costs plus a predetermined fixed fee. While it incentivizes cost control to some extent (as the fee is fixed), it can still lead to cost overruns if the initial cost estimates are inaccurate or if scope creep occurs. The government bears the risk of cost increases beyond the estimate.
What is the benchmark for similar systems engineering services contracts for missile systems, and how does this contract's pricing compare?
Benchmarking engineering services for complex defense systems like the Tomahawk is challenging due to unique technical requirements and proprietary knowledge. However, comparing the contract's total value and duration against historical data for similar, albeit less specialized, engineering contracts could reveal potential deviations. A lack of detailed cost breakdowns makes direct comparison difficult.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Contractor Details
Parent Company: Leidos Holdings, Inc. (UEI: 611641312)
Address: 10260 CAMPUS POINT DRIVE,, SAN DIEGO, CA, 92121
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2000-12-21
Current End Date: 2005-12-31
Potential End Date: 2005-12-31 00:00:00
Last Modified: 2016-07-12
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