Leidos Inc. awarded $26.3M for R&D support, highlighting a 5-year contract with the Department of Defense
Contract Overview
Contract Amount: $26,293,966 ($26.3M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2012-09-14
End Date: 2017-09-16
Contract Duration: 1,828 days
Daily Burn Rate: $14.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: BASE PERIOD - R&D SUPPORT SERVICES
Place of Performance
Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92106
Plain-Language Summary
Department of Defense obligated $26.3 million to LEIDOS, INC. for work described as: BASE PERIOD - R&D SUPPORT SERVICES Key points: 1. The contract value of $26.3 million over five years suggests a moderate investment in research and development support. 2. Full and open competition indicates a potentially competitive bidding process, which can lead to better pricing. 3. The contract type (Cost Plus Fixed Fee) carries inherent risk for the government, as costs can escalate. 4. The North American Industry Classification System (NAICS) code 541712 points to specialized R&D services in physical, engineering, and life sciences. 5. The award to Leidos, Inc. places this contract within a large, established federal contractor's portfolio. 6. The contract duration of 1828 days (approximately 5 years) allows for sustained support but requires careful performance monitoring.
Value Assessment
Rating: fair
The contract's value of $26.3 million over five years averages to approximately $5.26 million annually. Benchmarking this against similar R&D support contracts is challenging without more specific service details. However, the Cost Plus Fixed Fee (CPFF) contract type generally offers less price certainty for the government compared to fixed-price contracts, potentially leading to higher overall costs if not managed diligently. The fixed fee component provides some predictability, but the variable cost reimbursement is a key area for scrutiny.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting that multiple bidders were likely considered. The presence of two bids (no: 2) indicates a degree of competition, but the optimal number for ensuring the best value can vary. A higher number of bidders typically correlates with more competitive pricing and a wider range of technical solutions. The fact that it was competed openly is a positive sign for price discovery.
Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation. The presence of at least two bidders suggests that the government received multiple offers, increasing the likelihood of a fair market price being achieved.
Public Impact
The primary beneficiaries are likely the Department of the Navy and its research initiatives, receiving specialized R&D support. The contract delivers essential research and development services, contributing to advancements in physical, engineering, and life sciences. The geographic impact is centered around the contractor's operations, likely within California where the contract was awarded. The contract supports a workforce engaged in scientific research and technical development, contributing to the specialized labor market.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not closely monitored.
- Limited competition (only 2 bidders) may have resulted in a higher price than if more firms had participated.
- The specific R&D focus is broad (NAICS 541712), making it difficult to assess the true value-for-money without detailed project outcomes.
Positive Signals
- Awarded under full and open competition, indicating a fair and accessible bidding process.
- The contract duration allows for sustained R&D efforts, potentially leading to more significant breakthroughs.
- Leidos, Inc. is a large, established contractor with significant experience in federal R&D, suggesting a lower risk of performance failure.
Sector Analysis
This contract falls within the Research and Development in the Physical, Engineering, and Life Sciences sector, excluding biotechnology. This is a critical area for government innovation and technological advancement. The market for such services is substantial, with numerous large and small businesses competing for federal contracts. Comparable spending benchmarks would depend heavily on the specific scientific disciplines and the scale of research supported, but R&D services represent a significant portion of federal procurement budgets.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a result, small businesses were likely not the primary focus of this award. There is no explicit information on subcontracting plans for small businesses. This suggests that the prime contractor, Leidos, Inc., will likely perform the majority of the work, potentially limiting opportunities for small business participation unless specifically subcontracted.
Oversight & Accountability
Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. Accountability measures would be embedded in the contract's performance work statement and milestones. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Department of Defense Research and Development
- Navy Science and Technology Programs
- Federal R&D Services Procurement
- Contracting for Scientific Research
Risk Flags
- Cost Plus Fixed Fee contract type
- Limited number of bidders (2)
Tags
research-and-development, department-of-defense, department-of-the-navy, definitive-contract, full-and-open-competition, cost-plus-fixed-fee, california, large-business, science-and-technology, engineering-services
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $26.3 million to LEIDOS, INC.. BASE PERIOD - R&D SUPPORT SERVICES
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 $26.3 million.
What is the period of performance?
Start: 2012-09-14. End: 2017-09-16.
What is Leidos, Inc.'s track record with similar R&D support contracts awarded by the Department of Defense?
Leidos, Inc. has a substantial track record with the Department of Defense (DoD) and other federal agencies for providing a wide range of research and development support services. Their portfolio often includes complex scientific and engineering tasks, systems integration, and technical consulting across various domains. Analyzing their past performance on similar Cost Plus Fixed Fee (CPFF) contracts would be crucial. This would involve reviewing past performance evaluations, any documented issues or successes, and their ability to manage costs effectively within the fixed fee structure. A review of their contract history would likely reveal numerous awards in R&D, indicating a high level of experience and capability, but also highlighting the importance of diligent oversight due to the nature of CPFF contracts.
How does the $26.3 million contract value compare to other R&D support contracts of similar scope and duration?
The $26.3 million contract value over approximately five years equates to an average annual value of roughly $5.26 million. To benchmark this effectively, one would need to compare it against other R&D support contracts awarded by the Department of the Navy or other DoD branches for services falling under NAICS code 541712. Factors such as the specific scientific disciplines involved, the level of technical complexity, the required deliverables, and the contractor's overhead rates would influence comparability. Without these specifics, it's difficult to definitively state if $5.26 million annually is high or low. However, for specialized R&D support, this figure suggests a moderately sized contract, not exceptionally large or small, but requiring significant expertise.
What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this R&D support service?
The primary risk for the government with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost escalation. While the contractor is reimbursed for allowable costs, the fixed fee is predetermined. If costs exceed projections significantly, the contractor may be incentivized to control spending to protect their fee, but there's also a risk that the government ends up paying for less efficient work if oversight is lax. The contractor bears the risk of cost overruns impacting their profit margin (the fixed fee), but the government bears the risk of paying higher-than-expected costs. Effective oversight, clear definition of allowable costs, and robust performance metrics are crucial to mitigate these risks and ensure value for money.
What does the limited competition (2 bidders) imply for the government's ability to secure the best value?
Limited competition, such as only two bidders responding to a solicitation, can raise concerns about whether the government secured the best possible value. While two bidders indicate some level of market interest, a more robust competition with a larger number of offers typically leads to more aggressive pricing and a wider array of innovative solutions. With only two bidders, there's a higher chance that the government may not have benefited from the full spectrum of market capabilities or the most competitive pricing. This scenario necessitates careful evaluation of the proposals received to ensure that the selected offer represents a fair and reasonable price for the required services, and that the government did not forgo potentially better options.
How has federal spending in R&D support services (NAICS 541712) trended over the past five years?
Federal spending in R&D support services, particularly under NAICS code 541712 (Research and Development in the Physical, Engineering, and Life Sciences), has generally seen consistent or increasing investment over the past five years. Agencies like the Department of Defense, National Science Foundation, and Department of Health and Human Services are major contributors to this spending. Trends often reflect national priorities in areas such as defense modernization, public health research, and technological innovation. While specific year-over-year fluctuations occur, the overall trajectory indicates a sustained demand for these specialized services, driven by the need for scientific advancement and technological solutions across various government missions.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N6264512R0040
Offers Received: 2
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, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $31,188,187
Exercised Options: $31,188,187
Current Obligation: $26,293,966
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $13,000
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2012-09-14
Current End Date: 2017-09-16
Potential End Date: 2017-09-16 00:00:00
Last Modified: 2020-08-13
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