DoD awards $60M IT contract to Leidos, Inc. for computer systems design services
Contract Overview
Contract Amount: $59,926,076 ($59.9M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2025-01-01
End Date: 2025-09-30
Contract Duration: 272 days
Daily Burn Rate: $220.3K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: FOR THE PROVISION OF NON-PERSONAL SERVICES IAW SMIT CONTRACT AND THIS ORDER'S REQUIREMENT
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $59.9 million to LEIDOS, INC. for work described as: FOR THE PROVISION OF NON-PERSONAL SERVICES IAW SMIT CONTRACT AND THIS ORDER'S REQUIREMENT Key points: 1. Contract value of $59.9M represents a significant investment in IT infrastructure. 2. Awarded under full and open competition, suggesting a competitive bidding process. 3. Fixed-price contract type aims to control costs and manage contractor risk. 4. Computer Systems Design Services are critical for modern defense operations. 5. Contract duration of 272 days indicates a focused, short-term project. 6. Leidos, Inc. is a major defense contractor with extensive experience in IT. 7. Virginia location suggests potential impact on the regional tech workforce.
Value Assessment
Rating: good
The contract value of approximately $60 million for computer systems design services appears reasonable given the scope and duration. Benchmarking against similar large-scale IT service contracts awarded by the Department of Defense, this figure falls within expected ranges. The firm fixed-price structure suggests that cost control was a primary consideration, potentially leading to better value for the government compared to cost-reimbursement contracts, assuming the contractor can manage their expenses effectively. Further analysis would require detailed task order breakdowns and comparison to specific service benchmarks.
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 bids. The specific number of bidders is not provided, but this procurement method generally fosters a competitive environment. A robust competition typically leads to better price discovery and encourages contractors to offer competitive pricing and innovative solutions to win the award. The government likely received multiple proposals, allowing for a thorough evaluation of technical capabilities and cost.
Taxpayer Impact: Full and open competition is beneficial for taxpayers as it maximizes the potential for cost savings through a competitive bidding process. It ensures that the government is not limited to a single provider, thereby driving down prices and improving the overall value received for taxpayer dollars.
Public Impact
The Department of the Navy benefits from enhanced computer systems design capabilities. Modernized IT infrastructure will support critical defense operations and data management. The contract's primary impact is on the defense sector's technological advancement. Potential for job creation or utilization of skilled IT professionals in Virginia.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of specific performance metrics makes it difficult to assess contractor effectiveness.
- The fixed-price nature could incentivize cost-cutting that might impact quality if not closely monitored.
- Limited duration may indicate a project with potential for follow-on work, creating uncertainty.
- Reliance on a single large contractor for critical IT services could pose a risk if performance falters.
Positive Signals
- Awarded through full and open competition, suggesting a competitive and fair process.
- Leidos, Inc. has a strong track record with the Department of Defense.
- Firm fixed-price contract type provides cost certainty for the government.
- The contract addresses a clear need for computer systems design services.
Sector Analysis
The IT services sector, particularly within defense, is characterized by high demand for specialized skills in areas like computer systems design. This contract fits within the broader market for IT support and modernization for federal agencies. The total addressable market for IT services to the U.S. government is substantial, with agencies like the Department of Defense being major spenders. Comparable spending benchmarks for similar IT design and integration services can range from tens to hundreds of millions of dollars, depending on the complexity and duration.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the prime contractor, Leidos, Inc., is a large business. While there is no direct set-aside, there may be opportunities for small businesses to participate as subcontractors. The extent of subcontracting to small businesses will depend on Leidos's subcontracting plan and the specific requirements of the computer systems design services. Without this information, the direct impact on the small business ecosystem is unclear, but it is unlikely to be a primary driver of small business growth.
Oversight & Accountability
Oversight for this contract will likely be managed by the Department of the Navy's contracting officers and program managers. The firm fixed-price nature provides a degree of accountability by linking payment to deliverables. Transparency is generally maintained through contract award notices and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected. The specific oversight mechanisms will be detailed within the contract's terms and conditions.
Related Government Programs
- Department of Defense IT Modernization Programs
- Navy Enterprise IT Services
- Computer Systems Design and Integration Contracts
- Federal Civilian IT Services
Risk Flags
- Potential for scope creep due to the nature of IT design services.
- Reliance on a single large contractor for critical IT functions.
- Need for robust oversight to ensure quality and adherence to fixed price.
- Cybersecurity vulnerabilities inherent in IT system design.
Tags
it-services, computer-systems-design, department-of-defense, department-of-the-navy, firm-fixed-price, full-and-open-competition, large-business, virginia, delivery-order, it-modernization
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $59.9 million to LEIDOS, INC.. FOR THE PROVISION OF NON-PERSONAL SERVICES IAW SMIT CONTRACT AND THIS ORDER'S REQUIREMENT
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 $59.9 million.
What is the period of performance?
Start: 2025-01-01. End: 2025-09-30.
What is Leidos, Inc.'s track record with the Department of Defense for similar IT services?
Leidos, Inc. is a significant contractor for the Department of Defense, frequently awarded contracts for a wide range of IT services, including systems design, integration, cybersecurity, and enterprise IT management. Their history with the DoD includes numerous large-scale projects supporting various branches and agencies. For instance, they have been involved in major initiatives related to command and control systems, data analytics, and cloud migration. While specific performance metrics for past contracts are not publicly detailed in this summary, their continued success in securing substantial DoD contracts suggests a generally positive track record and a strong understanding of military IT requirements. However, as with any large contractor, there may be instances of performance issues or contract disputes on specific projects that are not immediately apparent from award data alone.
How does the $59.9 million contract value compare to similar IT services contracts awarded by the DoD?
The $59.9 million contract value for computer systems design services is a substantial but not extraordinary amount for the Department of Defense. The DoD is one of the largest purchasers of IT services globally, with annual spending in the tens of billions of dollars. Contracts for complex IT systems design, development, and integration can easily range from tens to hundreds of millions, and sometimes even billions, depending on the scope, duration, and technological sophistication. This particular contract, with a duration of 272 days (approximately 9 months), suggests a focused project. When compared to other large-scale, multi-year IT modernization efforts or enterprise-wide system deployments, $60 million for a specific design service over less than a year is within a common range. However, without knowing the precise technical requirements and deliverables, a definitive value-for-money assessment is challenging.
What are the primary risks associated with this contract for the government?
The primary risks associated with this contract include potential performance issues, cost overruns (despite the fixed-price nature, scope creep can occur), and contractor dependency. If Leidos, Inc. fails to deliver the required computer systems design services effectively or on time, it could disrupt critical defense operations. While the firm fixed-price contract aims to mitigate cost overruns, poorly defined requirements or unforeseen technical challenges could still lead to disputes or necessitate contract modifications, potentially increasing the overall cost. Another risk is the reliance on a single large contractor for a critical function; if Leidos experiences significant internal issues or decides to exit the market, the government could face challenges in transitioning services. Finally, cybersecurity risks are inherent in any IT contract, requiring robust security protocols and monitoring.
How effective is the firm fixed-price (FFP) contract type in ensuring value for this IT services contract?
The firm fixed-price (FFP) contract type is generally considered effective in ensuring value for IT services when the scope of work is well-defined and stable. For this contract, it places the primary risk of cost overruns on the contractor (Leidos, Inc.), incentivizing them to manage their resources efficiently and complete the work within budget. This structure provides the government with cost certainty, making budgeting more predictable. However, the effectiveness hinges on the clarity and completeness of the contract's requirements. If the scope is ambiguous or subject to frequent changes, it can lead to disputes, change orders, or a contractor potentially cutting corners on quality to maintain profitability, thereby diminishing the value. For complex IT design services, where innovation and adaptation might be needed, an FFP contract requires meticulous upfront planning and robust change management processes to maximize value.
What are the historical spending patterns for computer systems design services within the Department of the Navy?
Historical spending patterns for computer systems design services within the Department of the Navy (DoN) show a consistent and significant investment in IT infrastructure and modernization. The DoN, like other branches of the DoD, relies heavily on advanced IT systems for command, control, communications, intelligence, and logistics. Spending in this category typically fluctuates based on major modernization initiatives, new platform acquisitions, and evolving cybersecurity threats. Over the past decade, the DoN has consistently awarded contracts in the hundreds of millions, and sometimes billions, of dollars annually for various IT services, including systems design. Factors influencing these patterns include the introduction of new technologies (e.g., cloud computing, AI), the need to upgrade legacy systems, and the ongoing demand for secure and resilient networks. This $60 million award represents a portion of that ongoing investment.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - SECURITY AND COMPLIANCE
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N0003918R0005
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 11951 FREEDOM DR FL 15, 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: $59,926,076
Exercised Options: $59,926,076
Current Obligation: $59,926,076
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0003920D0054
IDV Type: IDC
Timeline
Start Date: 2025-01-01
Current End Date: 2025-09-30
Potential End Date: 2025-09-30 00:00:00
Last Modified: 2025-07-28
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