Logistics support services contract awarded to Science Applications International Corporation for over $148 million

Contract Overview

Contract Amount: $25,456,557 ($25.5M)

Contractor: Leidos, Inc.

Awarding Agency: Department of Defense

Start Date: 2006-07-13

End Date: 2010-08-13

Contract Duration: 1,492 days

Daily Burn Rate: $17.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: 200610!011713!1700!N00140!FLEET AND INDUSTRIAL SUPPLY CENT!N0014006C0062 !A!N! !Y! ! !20060713!20070813!148095086!148095086!054781240!N!SCIENCE APPLICATIONS INTERNATI!10260 CAMPUS POINT DR !SAN DIEGO !CA!92121!48376!041!42!MECHANICSBURG !CUMBERLAND !PENN !+000005186546!N!N!000020394323!R706!LOGISTICS SUPPORT SERVICES !S1 !SERVICES !000 !NOT DISCERNABLE !541611!E! !3! ! ! ! ! !99990909!B! ! !A! !A!U!U!2!001!B! !Z!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! ! !1710!N00383!0001! !

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $25.5 million to LEIDOS, INC. for work described as: 200610!011713!1700!N00140!FLEET AND INDUSTRIAL SUPPLY CENT!N0014006C0062 !A!N! !Y! ! !20060713!20070813!148095086!148095086!054781240!N!SCIENCE APPLICATIONS INTERNATI!10260 CAMPUS POINT DR !SAN DIEGO !CA!92121!48376!041!42!MECHANICSBURG !CUMB… Key points: 1. Contract value of $148M over its duration suggests a significant investment in logistics capabilities. 2. Awarded under full and open competition, indicating a potentially competitive bidding process. 3. The contract type (Cost Plus Fixed Fee) can sometimes lead to cost overruns if not managed carefully. 4. The duration of the contract (over 4 years) implies a long-term need for these services. 5. The primary service area is logistics support, crucial for operational readiness. 6. The contractor, Science Applications International Corporation, has a track record in government contracting.

Value Assessment

Rating: fair

The contract value of $148,095,086 for logistics support services over approximately four years appears substantial. Benchmarking this against similar large-scale logistics contracts would be necessary for a definitive value assessment. The Cost Plus Fixed Fee (CPFF) contract type, while allowing for flexibility, carries inherent risks of cost escalation compared to fixed-price contracts. Without detailed performance metrics and cost breakdowns, it's challenging to definitively assess value for money, but the scale suggests a significant operational requirement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple bidders had the opportunity to compete. The number of bidders is not specified, but this approach generally fosters price discovery and can lead to more competitive pricing for the government. The open nature of the competition implies that the government sought the best available solution and price from the market.

Taxpayer Impact: A full and open competition is generally favorable for taxpayers as it increases the likelihood of obtaining services at a competitive price, potentially saving taxpayer dollars through market forces.

Public Impact

The Department of Defense benefits from enhanced logistics support, crucial for maintaining operational readiness and supply chain efficiency. Services delivered include comprehensive logistics support, likely encompassing inventory management, transportation, and maintenance coordination. The geographic impact is likely widespread, supporting military operations across various locations, though specific deployment details are not provided. Workforce implications may include the employment of personnel by the contractor to fulfill the logistics support requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize contractors to increase costs to maximize their fee, requiring robust oversight.
The long duration of the contract could lead to vendor lock-in or reduced flexibility if needs change significantly.
Lack of specific performance metrics in the provided data makes it difficult to assess the contractor's efficiency and effectiveness.
The broad nature of 'logistics support services' could mask potential inefficiencies if not clearly defined and monitored.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that could yield better value.
The contractor, Science Applications International Corporation, is a known entity in the government contracting space, implying some level of established capability.
The contract addresses a critical function (logistics support) essential for military operations.
The definitive contract award suggests a clear intent and commitment from the agency.

Sector Analysis

Logistics support services represent a significant segment within the broader professional services sector, particularly for government agencies reliant on complex supply chains. The market for these services is competitive, with numerous firms offering specialized capabilities. This contract fits within the defense logistics sub-sector, which is characterized by high demand, stringent requirements, and substantial contract values. Comparable spending benchmarks would typically involve analyzing other large-scale logistics support contracts awarded by the Department of Defense or other federal agencies to similar contractors.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss=false, sb=false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside provision. However, the prime contractor, Science Applications International Corporation, may engage small businesses as subcontractors for specific components or services, though this is not detailed in the available information. The absence of a small business set-aside means the primary competition was open to all eligible large businesses.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the awarding agency, the Department of Defense, and specifically the Defense Contract Management Agency (DCMA), which is listed as the servicing agency. Accountability measures would be embedded within the contract's terms and conditions, including performance standards and reporting requirements. Transparency is facilitated through contract databases like FPDS, which provide public access to award details. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Defense Logistics Agency (DLA) Contracts
General Services Administration (GSA) Schedule Contracts
Department of the Army Logistics Support Contracts
Department of the Navy Fleet Readiness Contracts

Risk Flags

Cost Plus Fixed Fee contract type carries inherent risk of cost escalation.
Long contract duration may reduce flexibility and increase risk of vendor lock-in.
Lack of specific performance metrics in provided data hinders detailed value assessment.
Potential for cost overruns if not managed with rigorous oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.5 million to LEIDOS, INC.. 200610!011713!1700!N00140!FLEET AND INDUSTRIAL SUPPLY CENT!N0014006C0062 !A!N! !Y! ! !20060713!20070813!148095086!148095086!054781240!N!SCIENCE APPLICATIONS INTERNATI!10260 CAMPUS POINT DR !SAN DIEGO !CA!92121!48376!041!42!MECHANICSBURG !CUMBERLAND !PENN !+000005186546!N!N!000020394323!R706!LOGISTICS SUPPORT SERVICES !S1 !SERVICES !000 !NOT DISCERNABLE !541611!E! !3! ! ! ! ! !999

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 $25.5 million.

What is the period of performance?

Start: 2006-07-13. End: 2010-08-13.

What is the historical spending pattern for logistics support services by the Department of Defense?

The Department of Defense (DoD) is a major consumer of logistics support services, with annual spending often reaching tens of billions of dollars. This spending fluctuates based on global operational tempo, strategic priorities, and budget allocations. Historically, the DoD has relied on a mix of in-house capabilities and contracted services to manage its vast and complex supply chains. Major contract vehicles often involve large, multi-year awards for services ranging from supply chain management and transportation to maintenance and depot operations. Spending trends are influenced by factors such as technological advancements in logistics, geopolitical events, and efforts to improve efficiency and reduce costs through consolidation or outsourcing. Analyzing historical data reveals a consistent and significant investment in ensuring the readiness and operational effectiveness of military forces through robust logistics.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other contract types in terms of risk and cost efficiency for the government?

Cost Plus Fixed Fee (CPFF) contracts are used when the scope of work is not precisely defined, or when there is significant uncertainty in the cost of performance. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee, which represents profit. This structure shifts a considerable amount of cost risk to the government, as the contractor is incentivized to incur costs to perform the work, while their profit remains constant. Compared to Firm-Fixed-Price (FFP) contracts, where the contractor assumes most of the cost risk and is paid a set amount regardless of actual costs, CPFF can be less cost-efficient for the government if not managed diligently. However, CPFF offers flexibility and is suitable for research and development or complex service contracts where requirements may evolve. Other contract types, like Cost Plus Incentive Fee (CPIF), introduce performance incentives to mitigate cost risks, while Time and Materials (T&M) contracts are generally used for smaller efforts with less defined scopes.

What is the typical profit margin for contractors in the logistics support services sector for the federal government?

Profit margins for contractors in the federal logistics support services sector can vary significantly based on contract type, complexity, competition, and the specific services provided. For Cost Plus Fixed Fee (CPFF) contracts, the 'fixed fee' is negotiated as a percentage of the estimated cost and represents the contractor's profit. This fee is typically negotiated within a range, often between 5% and 15% of the estimated cost, but can be higher for highly specialized or risky endeavors. For other contract types, like Firm-Fixed-Price (FFP), the profit is embedded within the overall price and is influenced by the contractor's efficiency and competitive bidding strategy. Generally, the defense and federal contracting sector, including logistics, aims for reasonable profits that reflect the risks undertaken and the value delivered. However, actual realized profit can be affected by cost controls, performance incentives, and contract modifications. Benchmarking specific profit rates requires access to detailed contract data and industry analysis reports.

What are the key performance indicators (KPIs) typically used to evaluate logistics support contracts for the Department of Defense?

Key Performance Indicators (KPIs) for Department of Defense (DoD) logistics support contracts are designed to measure efficiency, effectiveness, and readiness. Common KPIs include On-Time Delivery rates, ensuring that supplies and equipment reach their destinations within specified timelines. Inventory Accuracy, measuring the precision of inventory records against physical stock, is critical for supply chain visibility. Equipment Readiness Rates or Mean Time Between Failures (MTBF) assess the reliability and maintainability of supported assets. Order Fill Rates indicate the percentage of requested items that can be fulfilled from available stock. Cost Efficiency metrics, such as cost per unit shipped or cost per maintenance hour, are also vital. Furthermore, compliance with safety regulations and security protocols is paramount. These KPIs are often tied to contract performance clauses and can influence contractor payment or award fees.

What is the role of the Defense Contract Management Agency (DCMA) in overseeing contracts like this one?

The Defense Contract Management Agency (DCMA) plays a crucial role in overseeing contracts awarded by the Department of Defense (DoD) and other federal agencies. For a contract like the one awarded to Science Applications International Corporation, DCMA's responsibilities would include ensuring contractor compliance with contract terms, monitoring performance, and verifying costs and payments. This involves activities such as conducting pre-award surveys, performing post-award surveillance, administering contract modifications, and ensuring timely delivery of goods and services. DCMA's personnel work closely with both the government contracting activity and the contractor to facilitate effective contract execution. Their oversight aims to mitigate risks, ensure fair pricing, and confirm that the government receives the quality and quantity of goods or services specified in the contract, thereby safeguarding taxpayer investments.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Leidos Holdings, Inc. (UEI: 611641312)

Address: 10260 CAMPUS POINT DR, SAN DIEGO, CA, 92121

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline