Leidos Inc. awarded $14.7M for Low Band Universal Communications System, a decade-long contract
Contract Overview
Contract Amount: $14,744,123 ($14.7M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2009-08-07
End Date: 2018-02-21
Contract Duration: 3,120 days
Daily Burn Rate: $4.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Official Description: LOW BAND UNIVERSAL COMMUNICATIONS SYSTEM
Place of Performance
Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $14.7 million to LEIDOS, INC. for work described as: LOW BAND UNIVERSAL COMMUNICATIONS SYSTEM Key points: 1. Contract awarded for a critical communications system, indicating a long-term need. 2. The contract duration of 3120 days suggests a complex and extensive project. 3. Awarded under full and open competition, implying a robust bidding process. 4. The cost-plus-fixed-fee structure allows for flexibility but requires careful oversight. 5. The system's purpose is vital for defense communications infrastructure. 6. Contractor Leidos, Inc. has a significant presence in the defense sector.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging due to its specific nature and long duration. The cost-plus-fixed-fee (CPFF) pricing structure means the final cost could fluctuate based on actual expenses incurred by Leidos, Inc., plus a predetermined fixed fee. While CPFF contracts are common for research and development or when project scope is uncertain, they can lead to higher overall costs compared to fixed-price contracts if not managed diligently. Without detailed cost breakdowns or comparisons to similar universal communications system deployments, assessing the precise value-for-money is difficult. However, the extended period of performance suggests a sustained need and potentially a competitive pricing strategy over the contract's life.
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 a bid. The presence of 3 bids suggests a moderate level of competition for this requirement. While more bidders could potentially drive prices lower, three offers generally provide a reasonable basis for price discovery and selection of the best value. The agency's decision to use full and open competition implies confidence that the market could adequately meet the specified requirements.
Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple companies to vie for the contract, potentially leading to more competitive pricing and better value.
Public Impact
The Department of Defense benefits from an upgraded and potentially more reliable universal communications system. This contract supports the development and deployment of advanced wireless communication technologies. The geographic impact is likely widespread, supporting military operations across various locations. Workforce implications may include specialized engineering, technical, and project management roles within Leidos, Inc. and its subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee contracts can lead to cost overruns if not closely monitored.
- The long contract duration (over 8 years) increases the risk of scope creep or evolving technological requirements.
- Reliance on a single contractor for a critical system could pose risks if performance issues arise.
Positive Signals
- Awarded through full and open competition, suggesting a competitive process.
- The contract addresses a critical need for universal communications within the DoD.
- Leidos, Inc. is a well-established contractor with significant experience in defense systems.
Sector Analysis
The contract falls within the Information Technology and Telecommunications sector, specifically related to wireless communications equipment manufacturing and services. This sector is characterized by rapid technological advancements and significant government investment, particularly in defense applications. The market size for defense communications systems is substantial, with numerous companies competing for contracts. This specific award for a universal communications system likely represents a strategic investment by the DoD to modernize its C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) capabilities, fitting within broader trends of network-centric warfare and secure communication infrastructure.
Small Business Impact
There is no indication that this contract included a small business set-aside. Given the nature and scale of the Low Band Universal Communications System, it is likely that Leidos, Inc. would engage subcontractors. Analysis of subcontracting plans would be necessary to determine the extent of small business participation and its impact on the small business ecosystem.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices, potentially involving the Defense Contract Management Agency (DCMA) for contract administration. The cost-plus-fixed-fee structure necessitates rigorous financial oversight to ensure costs are reasonable and allocable, and that the fixed fee is earned. Transparency would depend on the agency's reporting practices and any public disclosures related to contract performance and expenditures. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.
Related Government Programs
- DoD C4ISR Modernization Programs
- Tactical Communications Systems
- Secure Communication Networks
- Wireless Spectrum Management
Risk Flags
- Long contract duration increases risk of technological obsolescence.
- Cost-plus-fixed-fee structure requires diligent cost oversight.
- Potential for scope creep over the extended performance period.
Tags
defense, department-of-defense, leidos-inc, communications-systems, wireless-technology, cost-plus-fixed-fee, full-and-open-competition, definitive-contract, information-technology, virginia, long-term-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $14.7 million to LEIDOS, INC.. LOW BAND UNIVERSAL COMMUNICATIONS SYSTEM
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 $14.7 million.
What is the period of performance?
Start: 2009-08-07. End: 2018-02-21.
What is Leidos, Inc.'s track record with similar large-scale defense communication system contracts?
Leidos, Inc. has a substantial track record in developing and managing complex defense systems, including communications, intelligence, and command and control solutions. They have been involved in numerous large-scale contracts with the Department of Defense and other federal agencies. Their experience often spans system integration, hardware and software development, and lifecycle support for critical infrastructure. Specific to communications, Leidos has worked on projects involving tactical radios, satellite communications, and network infrastructure upgrades. A review of their past performance on similar CPFF contracts would be beneficial to assess their ability to manage costs and deliver within scope over extended periods. Their established presence and history suggest a capacity to handle the technical and logistical demands of the Low Band Universal Communications System.
How does the awarded amount of $14.7 million compare to the total obligated amount over the contract's life?
The provided data indicates an awarded amount of $14,744,123. However, the contract's performance period extends from August 7, 2009, to February 21, 2018, a duration of approximately 3120 days (over 8 years). The awarded amount likely represents the initial ceiling or a significant portion of the total value, but the final cost could be higher or lower depending on the actual work performed and the cost-plus-fixed-fee structure. Without access to the contract's full funding history and final expenditure, it's difficult to ascertain the total obligated amount. Typically, for long-term CPFF contracts, funding is incrementally obligated over the performance period. The $14.7 million figure may represent the initial contract value or a significant tranche of funding, but the total expenditure could have been substantially different by the contract's completion.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for a communications system?
The primary risk with a CPFF contract for a communications system lies in potential cost overruns. While the contractor (Leidos, Inc.) is incentivized to control costs to protect their fixed fee, the government bears the risk of all allowable costs exceeding estimates. This structure can lead to higher final prices compared to fixed-price contracts, especially if the project scope is not well-defined or if unforeseen technical challenges arise. For a communications system, evolving technology, integration complexities, and cybersecurity threats can introduce unexpected costs. Effective oversight, stringent cost accounting standards, and clear performance metrics are crucial to mitigate these risks and ensure the government receives good value. The long duration of this contract amplifies these risks, requiring sustained vigilance.
How does the competition level (3 bidders) impact the potential for price discovery and value for taxpayers?
Having three bidders for the Low Band Universal Communications System contract suggests a moderate level of competition. While more bidders could theoretically lead to even lower prices, three offers generally provide a reasonable basis for price discovery. It indicates that multiple companies were interested and capable of meeting the requirements, preventing a situation of sole-source or limited competition where pricing power is heavily skewed towards the contractor. For taxpayers, this level of competition is generally positive, as it encourages bidders to offer competitive pricing and demonstrate superior value to win the contract. However, the effectiveness of this competition in securing the best possible price also depends on the clarity of the solicitation's requirements and the evaluation criteria used by the Department of Defense.
What are the potential performance implications of a contract spanning over 8 years?
A contract spanning over eight years for a communications system presents both opportunities and challenges for performance. On the positive side, it allows for sustained focus, deep integration, and the development of long-term expertise by the contractor, potentially leading to a highly optimized and reliable system. It also provides stability for the program and the workforce involved. However, the extended duration also introduces significant risks. Technological obsolescence is a major concern; communications technology evolves rapidly, and a system designed today might be outdated by the end of the contract. Scope creep, where requirements change or expand over time, can lead to cost increases and delays. Furthermore, maintaining consistent performance and contractor engagement over such a long period requires robust contract management and performance monitoring by the agency to ensure objectives remain aligned and deliverables meet evolving needs.
Industry Classification
NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N0003908R0023
Offers Received: 3
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, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $21,264,080
Exercised Options: $14,972,859
Current Obligation: $14,744,123
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2009-08-07
Current End Date: 2018-02-21
Potential End Date: 2018-02-21 00:00:00
Last Modified: 2021-11-01
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