Leidos, Inc. awarded $84.8M for engineering services, with a significant portion for R&D
Contract Overview
Contract Amount: $84,833,107 ($84.8M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2005-01-04
End Date: 2010-01-12
Contract Duration: 1,834 days
Daily Burn Rate: $46.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: 200504!052084!1700!N00039!SPACE AND NAVAL WARFARE SYSTEMS !N0003904C2121 !A!N! !N! ! !20050104!20051231!054781240!054781240!054781240!N!SCIENCE APPLICATIONS INTERNATI!10260 CAMPUS POINT DR !SAN DIEGO !CA!92121!66000!073!06!SAN DIEGO !SAN DIEGO !CALIFORNIA!+000000025000!N!N!000076291782!R414!SYSTEMS ENGINEERING SERVICES !S1 !SERVICES !000 !* !541330!E! !3! ! ! ! ! !20200930!B! ! !A! !A!U!U!2!004!B! !Z!N!Z! ! !N!C!N! ! ! !C!C!A!A!000!A!C!N! ! ! !Y!1700!N00039!0001! !
Place of Performance
Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $84.8 million to LEIDOS, INC. for work described as: 200504!052084!1700!N00039!SPACE AND NAVAL WARFARE SYSTEMS !N0003904C2121 !A!N! !N! ! !20050104!20051231!054781240!054781240!054781240!N!SCIENCE APPLICATIONS INTERNATI!10260 CAMPUS POINT DR !SAN DIEGO !CA!92121!66000!073!06!SAN DIEGO !SAN … Key points: 1. Contract value of $84.8M over 5 years indicates substantial investment in engineering and R&D. 2. Full and open competition suggests a healthy market for these specialized services. 3. Potential for cost overruns exists given the Cost Plus Fixed Fee contract type. 4. The contract's duration and value point to a long-term strategic need for these services. 5. This contract positions Leidos as a key provider within the defense engineering sector. 6. The significant R&D component suggests innovation and future technological development.
Value Assessment
Rating: good
The contract value of $84.8 million over approximately five years for engineering services appears reasonable given the scope and duration. Benchmarking against similar large-scale engineering and R&D contracts within the Department of Defense is necessary for a precise value-for-money assessment. The Cost Plus Fixed Fee (CPFF) structure, while common for R&D, carries inherent risks of cost escalation compared to fixed-price contracts. However, the fixed fee component provides some level of cost control for the government.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple capable vendors were likely solicited. The presence of four bidders suggests a competitive environment, which generally benefits the government by driving down prices and encouraging innovation. The specific number of bidders and the evaluation criteria would provide further insight into the intensity of the competition.
Taxpayer Impact: Full and open competition typically leads to better price discovery and potentially lower costs for taxpayers compared to sole-source or limited competition awards.
Public Impact
The primary beneficiaries are likely the Department of Defense, specifically entities requiring advanced engineering and R&D support. Services delivered include critical engineering expertise and research and development for defense systems. The geographic impact is centered around the contractor's location in San Diego, CA, and potentially other defense installations. Workforce implications include the creation or sustainment of highly skilled engineering and scientific jobs.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contracts can lead to higher final costs than fixed-price agreements if not managed carefully.
- The long duration of the contract increases the risk of scope creep or changing requirements impacting budget.
- Reliance on a single large contractor for critical engineering services could pose a risk if performance falters.
Positive Signals
- Awarded through full and open competition, suggesting a robust selection process and potential for competitive pricing.
- The contract's focus on R&D indicates investment in future capabilities and technological advancement for national security.
- The contractor, Leidos, Inc., is a well-established entity with significant experience in government contracting.
Sector Analysis
This contract falls within the Engineering Services sector, a critical component of the broader Defense industry. The market for defense engineering services is substantial, driven by the continuous need for technological advancement and system sustainment. Comparable spending benchmarks would involve analyzing other large-scale engineering support contracts awarded by the Department of Defense and other federal agencies for similar types of services.
Small Business Impact
The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large prime contract, it may offer subcontracting opportunities for small businesses, depending on the prime contractor's subcontracting plan and the nature of the work. The absence of a small business set-aside suggests the primary focus was on large, specialized firms capable of handling the extensive engineering and R&D requirements.
Oversight & Accountability
Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. Accountability measures would be embedded in the contract's performance standards, reporting requirements, and payment milestones. Transparency is generally facilitated through contract award databases and public reporting mechanisms, though specific details of performance and cost management may be sensitive.
Related Government Programs
- Department of Defense Research and Development
- Naval Systems Engineering Support
- Advanced Technology Development Contracts
- Professional, Scientific, and Technical Services
Risk Flags
- Cost Plus Fixed Fee contract type carries inherent risk of cost escalation.
- Long contract duration increases potential for scope creep and requirement changes.
- Reliance on a single large contractor for critical services.
- Potential for performance issues on complex R&D and engineering tasks.
Tags
defense, department-of-defense, engineering-services, research-and-development, cost-plus-fixed-fee, definitive-contract, full-and-open-competition, leidos-inc, naval-warfare, california, large-business, professional-scientific-and-technical-services
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $84.8 million to LEIDOS, INC.. 200504!052084!1700!N00039!SPACE AND NAVAL WARFARE SYSTEMS !N0003904C2121 !A!N! !N! ! !20050104!20051231!054781240!054781240!054781240!N!SCIENCE APPLICATIONS INTERNATI!10260 CAMPUS POINT DR !SAN DIEGO !CA!92121!66000!073!06!SAN DIEGO !SAN DIEGO !CALIFORNIA!+000000025000!N!N!000076291782!R414!SYSTEMS ENGINEERING SERVICES !S1 !SERVICES !000 !* !541330!E! !3! ! ! ! ! !202
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 $84.8 million.
What is the period of performance?
Start: 2005-01-04. End: 2010-01-12.
What is the historical spending pattern for similar engineering services contracts awarded by the Department of Defense to Leidos, Inc. or its predecessors?
Analyzing historical spending for Leidos, Inc. (and its predecessor Science Applications International Corporation, which was acquired by Leidos) on similar engineering services contracts with the Department of Defense reveals a consistent pattern of significant awards. Prior to this specific contract (N0003904C2121), both entities secured numerous contracts for R&D, systems engineering, and technical support. For instance, SAIC, before its split and subsequent acquisition, was a major player in defense IT and engineering services, receiving billions in contracts annually. Leidos has continued this trend, often winning large, multi-year contracts for complex systems integration, cybersecurity, and engineering support across various defense branches. The $84.8 million for this particular contract is substantial but aligns with the scale of work Leidos typically undertakes for the DoD, reflecting a long-standing relationship and demonstrated capability in delivering these specialized services.
How does the per-unit cost or pricing structure of this contract compare to industry benchmarks for engineering services?
The pricing structure of this contract is Cost Plus Fixed Fee (CPFF), which means the government reimburses the contractor for allowable costs plus a fixed fee representing profit. Benchmarking CPFF contracts is complex because the 'cost' component is variable. However, the fixed fee percentage is a key indicator. Industry benchmarks for fixed fees on CPFF contracts in defense R&D and engineering services typically range from 7% to 15% of the estimated cost. Without knowing the total estimated cost and the breakdown of the fixed fee, a precise comparison is difficult. However, the overall contract value of $84.8 million over approximately five years suggests an average annual value of around $17 million. This figure, when considering the highly specialized nature of defense engineering and R&D, appears within a reasonable range for large-scale, complex projects, assuming the fixed fee is competitive.
What are the primary risks associated with this contract, and what mitigation strategies are in place?
The primary risks associated with this Cost Plus Fixed Fee (CPFF) contract include potential cost overruns, scope creep, and performance issues. CPFF contracts inherently carry a risk of the government paying more than initially anticipated if costs escalate beyond estimates, although the fixed fee provides a ceiling on profit. Scope creep is another risk, where the project's requirements expand beyond the original agreement, leading to increased costs and timelines. Performance risk exists if the contractor fails to deliver the required engineering and R&D services effectively. Mitigation strategies typically involve robust government oversight by agencies like the Defense Contract Management Agency (DCMA), detailed performance work statements (PWS), regular progress reviews, stringent cost tracking, and defined milestones. The contract's structure likely includes clauses for contract modifications to manage scope changes formally and performance metrics to ensure quality and timeliness.
What is the expected impact of this contract on the specific technological capabilities or systems it supports?
This contract is expected to significantly advance the technological capabilities and systems it supports, particularly within the realm of naval warfare systems, as suggested by the awarding agency's designation (N00039). The substantial value and focus on engineering services and R&D indicate a commitment to developing, improving, or maintaining complex defense platforms. This could involve enhancing sensor technology, improving command and control systems, developing new weapon platforms, or refining existing systems for greater efficiency and effectiveness. The R&D component specifically points towards innovation, potentially leading to breakthroughs in areas like artificial intelligence, cyber warfare, autonomous systems, or advanced materials, thereby bolstering the nation's defense posture and maintaining a technological edge over adversaries.
How has the contractor, Leidos, Inc., performed on previous contracts of similar size and scope with the federal government?
Leidos, Inc., and its predecessor Science Applications International Corporation (SAIC), have a long and extensive track record of performing on large federal contracts, particularly within the defense and intelligence sectors. Generally, Leidos is considered a capable and reliable contractor, often winning significant awards for complex IT, systems engineering, and mission support services. Performance reviews and contract histories available through federal procurement databases (like SAM.gov or FPDS) often show a mix of high ratings and occasional areas for improvement, which is typical for large, complex organizations managing numerous contracts. For contracts of similar size and scope to this $84.8 million award, Leidos has demonstrated the capacity to manage intricate projects, deliver advanced technical solutions, and meet demanding performance requirements. However, like any major contractor, they have also faced scrutiny and challenges on specific contracts, underscoring the importance of ongoing government oversight.
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: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 4
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc. (UEI: 611641312)
Address: 11951 FREEDOM DR, RESTON, VA, 20190
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2005-01-04
Current End Date: 2010-01-12
Potential End Date: 2010-01-12 00:00:00
Last Modified: 2021-11-01
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