Leidos awarded $32.7M engineering services contract by the Department of the Navy
Contract Overview
Contract Amount: $32,683,402 ($32.7M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2024-09-10
End Date: 2026-09-18
Contract Duration: 738 days
Daily Burn Rate: $44.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: TARP VII REQUIREMENT
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $32.7 million to LEIDOS, INC. for work described as: TARP VII REQUIREMENT Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract is for engineering services, a critical support function for defense operations. 3. Fixed-price contract type may offer cost certainty for the government. 4. The duration of 738 days indicates a medium-term engagement for these services. 5. The award value of $32.7M places this contract within a significant spending category. 6. Virginia is the primary state for contract performance, indicating a concentration of economic impact.
Value Assessment
Rating: good
The contract value of $32.7M for engineering services over approximately two years appears reasonable given the scope of defense-related engineering support. Benchmarking against similar large-scale engineering contracts within the Department of Defense suggests this award is within expected parameters. The firm fixed-price structure provides a degree of cost control, though the ultimate value-for-money will depend on the successful delivery of required engineering solutions and the absence of significant change orders.
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 presence of two bids suggests a moderate level of competition for this specific requirement. While two bidders is better than a sole-source award, a higher number of bids would typically lead to more robust price discovery and potentially lower prices for the government.
Taxpayer Impact: The full and open competition, despite only two bidders, provides some assurance that taxpayer funds are being used efficiently by allowing multiple firms to vie for the contract, potentially driving down costs.
Public Impact
The Department of the Navy benefits from specialized engineering expertise to support its operations and readiness. This contract will likely support critical defense infrastructure and technological advancements. The primary geographic impact is in Virginia, potentially creating or sustaining high-skilled jobs in the region. The contract supports the broader defense industrial base by engaging a major contractor.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if the fixed-price contract does not adequately account for unforeseen technical challenges.
- Dependence on a single contractor for critical engineering services could pose a risk if performance issues arise.
- The limited number of bidders (two) might indicate barriers to entry or a concentrated market for these specialized services.
Positive Signals
- Awarded through full and open competition, promoting a fair marketplace.
- Firm fixed-price contract type offers budget predictability.
- Contract duration allows for sustained support and project completion.
- Contractor (Leidos) is a well-established entity in the government contracting space.
Sector Analysis
Engineering services are a vital component of the defense sector, encompassing design, development, testing, and maintenance of complex systems. The market for these services is substantial, driven by continuous modernization and operational needs of military branches. This contract fits within the broader category of professional services supporting national defense, where specialized technical expertise is paramount. Comparable spending benchmarks for engineering services within the DoD often run into billions annually across various contracts.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. While the prime contractor, Leidos, is a large business, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will be a key factor in assessing the broader impact on the small business ecosystem for this contract.
Oversight & Accountability
Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. Accountability measures are typically embedded within the contract terms, including performance standards and delivery schedules. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.
Related Government Programs
- Department of Defense Engineering Services
- Navy Shipyard Support Contracts
- Defense Professional Services
- TARP VII REQUIREMENT
Risk Flags
- Potential for scope creep in engineering services contracts.
- Risk of contractor performance issues impacting delivery schedules.
- Dependence on specialized technical expertise.
Tags
defense, department-of-defense, department-of-the-navy, engineering-services, full-and-open-competition, firm-fixed-price, delivery-order, leidos-inc, virginia, professional-services, large-business
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $32.7 million to LEIDOS, INC.. TARP VII 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 $32.7 million.
What is the period of performance?
Start: 2024-09-10. End: 2026-09-18.
What is Leidos's track record with the Department of the Navy for similar engineering services?
Leidos has a significant and established track record of providing a wide range of services, including engineering, IT, and logistics, to the Department of the Navy and other defense agencies. Their history includes numerous large-scale contracts for complex systems integration, platform modernization, and technical support. Analyzing past performance reviews, contract modifications, and on-time delivery rates for Leidos on similar Navy contracts would provide a clearer picture of their reliability and capability in executing this specific requirement. Given their size and experience, they are generally considered a capable provider, but specific performance metrics on prior, comparable contracts would offer deeper insight into potential risks or strengths.
How does the $32.7M award value compare to similar engineering services contracts awarded by the Navy in the last fiscal year?
The $32.7M award value for engineering services represents a substantial, but not exceptionally large, contract within the Department of the Navy's overall spending. In the last fiscal year, the Navy awarded numerous contracts for engineering support, ranging from smaller, specialized task orders to multi-billion dollar programs. Contracts for similar scope and duration, focusing on platform engineering, systems integration, or technical consulting, often fall within the tens of millions to low hundreds of millions of dollars. This specific award appears to be in the mid-range for significant engineering support contracts, suggesting it aligns with typical procurement patterns for specialized technical expertise needed for defense systems.
What are the primary risks associated with a firm fixed-price contract for complex engineering services?
The primary risk with a firm fixed-price (FFP) contract for complex engineering services lies in the potential for the contractor to incur costs exceeding the agreed-upon price, especially if the scope of work is not perfectly defined or if unforeseen technical challenges arise. For the government, the risk is that the contractor might cut corners on quality or scope to maintain profitability, or that the initial price may have been inflated to account for contractor risk. Conversely, if the contractor significantly underestimates costs or faces unexpected difficulties, they may seek change orders or even default, leading to delays and potential renegotiations. Effective government oversight is crucial to ensure the contractor manages risks and delivers the required quality within the fixed price.
What is the expected impact of this contract on the Navy's operational readiness or technological advancement?
This contract for engineering services is expected to directly support the Department of the Navy's operational readiness and technological advancement by providing essential technical expertise. The specific nature of the engineering services will determine the precise impact; for instance, if it involves designing upgrades for naval platforms, it enhances future capabilities. If it pertains to maintaining existing systems or troubleshooting complex issues, it directly contributes to current operational readiness. The successful execution of this contract should ensure that naval assets are well-maintained, technologically current, and capable of meeting mission requirements, thereby bolstering the Navy's overall effectiveness.
How has the spending on engineering services by the Department of the Navy trended over the past five years?
Spending on engineering services by the Department of the Navy has generally trended upwards over the past five years, reflecting increased investment in modernizing naval platforms, developing new technologies, and maintaining aging fleets. This trend is influenced by geopolitical factors, national defense strategies, and the continuous need for technological superiority. While specific figures fluctuate annually based on budget allocations and program priorities, the overall demand for specialized engineering expertise within the Navy has remained consistently high. This sustained investment underscores the critical role engineering services play in supporting naval operations and strategic objectives.
What is the significance of the contract being a 'Delivery Order' under a larger contract vehicle?
The designation 'DELIVERY ORDER' indicates that this $32.7M award is not a standalone contract but rather a specific order placed against a pre-existing, larger contract vehicle, likely a Multiple Award Indefinite Delivery/Indefinite Quantity (IDIQ) contract or a similar master agreement. This approach allows the government to procure services or supplies incrementally as needed, often with pre-negotiated terms and pricing. The significance is that the competition and initial vetting of the contractor (Leidos) likely occurred when the parent contract vehicle was awarded. This specific delivery order represents a defined scope of work and funding allocation within that broader framework, streamlining the procurement process for this particular requirement.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: N0018924R3046
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 1750 PRESIDENTS ST FL 10, 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: $92,899,881
Exercised Options: $32,683,402
Current Obligation: $32,683,402
Subaward Activity
Number of Subawards: 2
Total Subaward Amount: $1,665,933
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0017819D8006
IDV Type: IDC
Timeline
Start Date: 2024-09-10
Current End Date: 2026-09-18
Potential End Date: 2030-03-18 00:00:00
Last Modified: 2025-12-04
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