DoD awards $117M contract to Leidos for Navigation Systems, raising concerns about competition
Contract Overview
Contract Amount: $116,882,445 ($116.9M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2019-02-25
End Date: 2026-09-04
Contract Duration: 2,748 days
Daily Burn Rate: $42.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: NRE
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $116.9 million to LEIDOS, INC. for work described as: NRE Key points: 1. Significant contract value of $116.8M awarded to a single large business. 2. Lack of competition raises questions about price discovery and potential overspending. 3. The contract type (Cost Plus Fixed Fee) can incentivize cost overruns. 4. Sector focus on advanced navigation systems suggests critical defense applications.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee contract type, combined with a lack of competition, makes it difficult to assess pricing effectiveness. Without benchmarks or competitive bids, it's hard to determine if the $116.8M is a fair market price.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and may result in higher costs for taxpayers as there was no competitive pressure to drive down prices.
Taxpayer Impact: The lack of competition on this substantial contract likely means taxpayers are not receiving the best possible value, potentially leading to inflated costs.
Public Impact
Taxpayers may be overpaying for critical navigation systems due to the absence of competitive bidding. Reliance on a single contractor for essential defense technology could pose supply chain risks. The long duration of the contract (until 2026) means potential cost inefficiencies could persist for years.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus contract type
- No small business participation indicated
Positive Signals
- Awarded to a known defense contractor
- Supports critical defense capabilities
Sector Analysis
This contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector, a critical area for defense operations. Spending in this niche can be high due to specialized technology and R&D requirements.
Small Business Impact
The data indicates no small business participation in this contract. This is a missed opportunity to support small businesses and could indicate a lack of effort to include them in the supply chain for these specialized systems.
Oversight & Accountability
The 'NOT COMPETED' status warrants further oversight to understand the justification for a sole-source award. Accountability for ensuring fair pricing and exploring future competitive opportunities is crucial.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award lacks transparency.
- Cost-plus contract type increases risk of overspending.
- No small business participation.
- Long contract duration may lock in inefficiencies.
- Potential for vendor lock-in.
Tags
search-detection-navigation-guidance-aer, department-of-defense, va, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $116.9 million to LEIDOS, INC.. NRE
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 $116.9 million.
What is the period of performance?
Start: 2019-02-25. End: 2026-09-04.
What is the specific justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?
The justification for a sole-source award is critical for understanding the value proposition. Without competition, it's imperative to ensure the government has thoroughly vetted the necessity of this approach and explored all avenues for competitive bidding to secure the best possible pricing and technological solutions for the taxpayer.
How will the Department of Defense ensure cost control and value for money given the Cost Plus Fixed Fee structure and lack of competition?
With a Cost Plus Fixed Fee contract and no competition, robust oversight is essential. This includes detailed cost audits, performance monitoring, and clear milestones. The agency must actively manage the contractor's spending and ensure that the fixed fee remains appropriate throughout the contract's life to mitigate risks of cost overruns and ensure taxpayer value.
What is the long-term strategy for ensuring competitive sourcing for these navigation systems beyond the current contract's expiration?
Planning for future competition is vital. The Department of Defense should be actively researching the market, encouraging new entrants, and developing strategies to break down the sole-source dependency. This proactive approach will foster innovation, enhance supply chain resilience, and ultimately lead to better pricing and capabilities for national security needs.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0001918R0082
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 11951 FREEDOM DR, 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: $116,882,445
Exercised Options: $116,882,445
Current Obligation: $116,882,445
Actual Outlays: $3,896,315
Subaward Activity
Number of Subawards: 54
Total Subaward Amount: $41,516,847
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2019-02-25
Current End Date: 2026-09-04
Potential End Date: 2026-09-04 00:00:00
Last Modified: 2025-09-23
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