Leidos awarded $46.5M for product supportability, with a significant portion allocated to the Navy
Contract Overview
Contract Amount: $46,507,370 ($46.5M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2021-06-18
End Date: 2025-01-05
Contract Duration: 1,297 days
Daily Burn Rate: $35.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: PRODUCT SUPPORTABILITY
Place of Performance
Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92101
Plain-Language Summary
Department of Defense obligated $46.5 million to LEIDOS, INC. for work described as: PRODUCT SUPPORTABILITY Key points: 1. Contract value represents a substantial investment in maintaining critical defense systems. 2. Sole-source award raises questions about potential price overruns and limited market engagement. 3. Performance period extends over two years, indicating a long-term need for these services. 4. The contract falls within the Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing sector. 5. California is the primary geographic location for contract performance, suggesting a concentration of related defense activities.
Value Assessment
Rating: questionable
The contract's value of $46.5 million for product supportability services warrants scrutiny, especially given its sole-source nature. Without competitive bidding, it is difficult to benchmark the pricing against market rates or identify potential cost savings. The cost-plus incentive fee structure suggests that while there are incentives for efficiency, the government bears a significant portion of the risk if costs escalate. Further analysis of historical spending on similar supportability contracts and the specific deliverables would be necessary to provide a more definitive value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor, Leidos, Inc., was considered. This approach bypasses the standard competitive bidding process, which typically involves multiple companies vying for the contract. While sole-source awards can be justified in specific circumstances, such as when only one vendor possesses the required unique capabilities or when urgency precludes competition, they generally lead to less price discovery and potentially higher costs for the government.
Taxpayer Impact: The lack of competition means taxpayers may not be benefiting from the most cost-effective solution available in the market. This could result in a higher overall expenditure for the product supportability services provided.
Public Impact
The Department of the Navy benefits from continued product supportability for its critical systems. This contract ensures the operational readiness and longevity of specialized defense equipment. The primary geographic impact is in California, likely supporting naval bases or facilities in the state. The contract may indirectly support a specialized workforce in the aerospace and defense industry within California.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pressure, potentially leading to higher costs.
- Cost-plus incentive fee structure places cost risk on the government.
- Lack of transparency in the sole-source justification requires further review.
- Contract duration of over two years necessitates ongoing monitoring for performance and cost control.
Positive Signals
- Leidos, Inc. is an established defense contractor with experience in product support.
- The incentive fee structure aims to align contractor performance with government objectives.
- The contract addresses a critical need for product supportability in defense systems.
Sector Analysis
The defense sector, particularly within the realm of aerospace and nautical systems, relies heavily on specialized product supportability to maintain the operational effectiveness of complex equipment. This contract falls under the NAICS code 334511 (Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing). The market for such services is characterized by a limited number of highly specialized contractors capable of meeting stringent defense requirements. Spending in this area is often driven by the need for sustainment of aging platforms and the integration of new technologies, making long-term support contracts a common feature.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, there is no explicit mention of subcontracting goals for small businesses. This suggests that the primary awardee, Leidos, Inc., will likely perform the majority of the work. The absence of specific small business provisions means there may be limited direct benefit or opportunity for the small business ecosystem within this particular contract, although Leidos may engage small businesses as part of its broader supply chain.
Oversight & Accountability
Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. Given the sole-source nature and cost-plus incentive fee structure, robust oversight is crucial to ensure cost control and performance. Accountability measures would be tied to the incentive fee clauses and performance metrics defined in the contract. Transparency may be limited due to the sole-source justification, but contract award details and performance reports are typically available through federal procurement databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Defense Logistics Agency (DLA) Support Contracts
- Naval Air Systems Command (NAVAIR) Sustainment Programs
- Product Support Management Services
- Aerospace Systems Maintenance Contracts
Risk Flags
- Sole-source award
- Cost-plus contract type
- Lack of small business subcontracting goals
Tags
defense, department-of-defense, department-of-the-navy, leidos-inc, product-supportability, definitive-contract, sole-source, cost-plus-incentive-fee, california, aerospace-and-defense, navigational-equipment, search-and-detection-equipment
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $46.5 million to LEIDOS, INC.. PRODUCT SUPPORTABILITY
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 $46.5 million.
What is the period of performance?
Start: 2021-06-18. End: 2025-01-05.
What is Leidos, Inc.'s track record with the Department of Defense, particularly in product supportability?
Leidos, Inc. is a major defense contractor with a substantial history of serving the Department of Defense across various domains, including product supportability, systems integration, and information technology. They have held numerous contracts with different branches of the military, including the Navy, Army, and Air Force. Their experience often involves complex systems and long-term sustainment efforts. While specific performance metrics for past product supportability contracts are not detailed here, Leidos's continued presence and significant award values suggest a generally satisfactory performance history with the DoD. However, a deeper dive into past performance reviews and any documented issues on similar contracts would provide a more comprehensive understanding of their capabilities and reliability in this specific area.
How does the $46.5 million contract value compare to similar product supportability contracts awarded by the Navy or DoD?
Without specific details on the scope of services and the systems supported, a direct comparison of the $46.5 million contract value to similar product supportability contracts is challenging. However, for major defense platforms, product supportability contracts can range from tens of millions to billions of dollars over their lifecycle. Given that this is a definitive contract with a defined period of performance extending into 2025, $46.5 million appears to be a significant, but not exceptionally large, investment for specialized support. It suggests a focused scope of work rather than comprehensive fleet-wide sustainment. Benchmarking would ideally involve comparing contracts for similar types of systems (e.g., aeronautical vs. nautical) and similar service levels (e.g., depot-level maintenance vs. field support).
What are the primary risks associated with a sole-source award for product supportability services?
The primary risks associated with a sole-source award for product supportability services include a lack of competitive pricing, which can lead to higher costs for the government and taxpayers. Without competition, there is reduced incentive for the contractor to innovate or become more efficient, potentially leading to complacency. Furthermore, the government may be locked into a single vendor, limiting flexibility if performance issues arise or if better solutions become available from other providers. There's also a risk that the sole-source justification might not be as robust as it could be, potentially masking opportunities for competition that were overlooked or not adequately explored. This can undermine the principles of fair and open competition in government contracting.
How effective is the Cost Plus Incentive Fee (CPIF) contract type in managing costs for product supportability?
The Cost Plus Incentive Fee (CPIF) contract type aims to manage costs by incentivizing the contractor to perform efficiently. In a CPIF contract, the final negotiated fee is adjusted based on whether the final cost is above or below a target cost. If the contractor achieves cost savings, they share in a portion of those savings, increasing their fee. Conversely, if costs exceed the target, their fee is reduced. This structure can be effective in encouraging cost consciousness and performance improvement, especially when the target cost and sharing ratios are well-defined and achievable. However, the government still bears the risk of cost overruns, and the effectiveness hinges on accurate cost estimation and robust monitoring of contractor performance against the established targets.
What are the historical spending patterns for product supportability within the Department of the Navy?
Historical spending patterns for product supportability within the Department of the Navy are substantial and represent a significant portion of the overall defense budget. The Navy, operating a vast and complex array of naval vessels, aircraft, and shore-based systems, requires continuous support to maintain operational readiness. Spending in this category typically includes maintenance, repair, overhaul, spare parts, technical data, and logistics support. While specific aggregate figures for 'product supportability' can vary depending on how the category is defined and tracked across different fiscal years and appropriations, it is consistently a multi-billion dollar annual expenditure. Factors influencing these patterns include the age of platforms, modernization programs, operational tempo, and geopolitical demands.
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: INSTALLATION OF EQUIPMENT › INSTALLATION OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0002421R5202
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 1750 PRESIDENTS ST, 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: $67,020,845
Exercised Options: $62,432,462
Current Obligation: $46,507,370
Actual Outlays: $99,919
Subaward Activity
Number of Subawards: 74
Total Subaward Amount: $13,566,340
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2021-06-18
Current End Date: 2025-01-05
Potential End Date: 2025-01-05 00:00:00
Last Modified: 2024-05-22
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