Leidos Inc. awarded $30.5M in engineering services by DoD, with a significant portion allocated to cost-plus-fixed-fee contracts
Contract Overview
Contract Amount: $30,491,550 ($30.5M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2017-04-03
End Date: 2019-03-25
Contract Duration: 721 days
Daily Burn Rate: $42.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: IGF::OT::IGF
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $30.5 million to LEIDOS, INC. for work described as: IGF::OT::IGF Key points: 1. Value for money appears fair, with a substantial portion of the contract value tied to cost-plus-fixed-fee arrangements which can lead to cost overruns. 2. Competition dynamics indicate a full and open competition, suggesting a healthy market for these engineering services. 3. Risk indicators include the use of cost-plus-fixed-fee contract type, which may not incentivize cost efficiency as strongly as fixed-price contracts. 4. Performance context shows a contract duration of 721 days, indicating a medium-term engagement for engineering services. 5. Sector positioning places this contract within the engineering services sub-sector of the broader professional, scientific, and technical services industry.
Value Assessment
Rating: fair
The total award amount of $30.5 million for engineering services is a significant sum. Benchmarking against similar contracts is challenging without more specific service details. However, the use of Cost Plus Fixed Fee (CPFF) pricing, which reimburses costs plus a fixed fee, can sometimes lead to higher overall costs compared to fixed-price contracts if not managed tightly. The contract's base award of $4.2 million suggests a phased approach or initial scope, with the remaining value likely representing options or task 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 multiple bidders in such a scenario typically fosters price discovery and can lead to more competitive pricing for the government. The specific number of bidders is not provided, but the designation implies a robust competitive process.
Taxpayer Impact: A full and open competition generally benefits taxpayers by ensuring that the government receives the best possible value through market forces, rather than being limited to a restricted set of providers.
Public Impact
The primary beneficiaries are the Department of Defense, which receives essential engineering services to support its operations and projects. Services delivered likely encompass a range of engineering disciplines critical for defense infrastructure, systems, or research and development. The geographic impact is centered around the agency's operational areas, potentially including various military installations or project sites. Workforce implications may include the employment of engineers, technicians, and support staff by the prime contractor and any subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee contract type may incentivize higher costs if not rigorously monitored.
- Lack of specific details on the engineering services provided limits a deeper value assessment.
- The base award amount is significantly lower than the total award, suggesting potential for scope creep or reliance on unexercised options.
Positive Signals
- Awarded through full and open competition, indicating a competitive marketplace.
- The contractor, Leidos, Inc., is a large and established entity with significant experience in government contracting.
- The contract is managed by the Defense Contract Management Agency, suggesting established oversight processes.
Sector Analysis
This contract falls within the Professional, Scientific, and Technical Services sector, specifically engineering services. This sector is a critical component of the U.S. economy, supporting various industries including defense, infrastructure, and technology. The market for defense engineering services is substantial, driven by the ongoing need for modernization, maintenance, and development of military systems and capabilities. Comparable spending benchmarks would depend on the specific type of engineering services rendered, but large-scale government contracts in this area often range in the tens to hundreds of millions of dollars.
Small Business Impact
The contract details indicate that small business participation was not a primary set-aside consideration (sb: false). While Leidos, Inc. is a large business, there is no explicit information provided regarding subcontracting plans for small businesses. The absence of a small business set-aside does not preclude subcontracting opportunities, but it means they were not mandated as a primary goal of the contract's structure. Further analysis would be needed to determine if Leidos has a history of subcontracting with small businesses on similar contracts.
Oversight & Accountability
Oversight for this contract is likely managed by the Department of Defense, with specific administration handled by the Defense Contract Management Agency (DCMA). Accountability measures are typically embedded within the contract terms, including performance metrics, reporting requirements, and payment schedules tied to milestones. Transparency is facilitated through contract databases like FPDS, which record award details. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.
Related Government Programs
- Defense Engineering Services
- Professional, Scientific, and Technical Services
- Department of Defense Contracts
- Cost-Plus Contracts
- Large Business Prime Contracts
Risk Flags
- Cost-plus-fixed-fee contract type may lead to cost overruns.
- Lack of specific service details hinders in-depth value analysis.
- Potential for scope creep given the large difference between base and total award.
Tags
defense, engineering-services, leidos-inc, department-of-defense, full-and-open-competition, cost-plus-fixed-fee, professional-scientific-and-technical-services, contract-award, medium-term-contract, virginia
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $30.5 million to LEIDOS, INC.. IGF::OT::IGF
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 $30.5 million.
What is the period of performance?
Start: 2017-04-03. End: 2019-03-25.
What is the track record of Leidos, Inc. in performing similar engineering services contracts for the Department of Defense?
Leidos, Inc. has a substantial track record with the Department of Defense, frequently securing large contracts across various service domains, including engineering, IT, and logistics. Their performance history on similar contracts would typically be assessed through past performance evaluations during the bidding process. While specific details for this contract are not provided, Leidos is generally considered an experienced contractor with the capacity to handle complex defense requirements. Government contract databases often contain performance ratings and award histories that can provide further insight into their reliability and effectiveness in delivering contracted services.
How does the $30.5 million award compare to typical spending on engineering services by the DoD?
The $30.5 million award for engineering services by the Department of Defense is a significant but not extraordinary figure within the context of overall DoD spending. The DoD procures a vast array of services annually, with engineering support being a critical and consistent requirement. Large-scale engineering contracts can range from tens of millions to hundreds of millions of dollars, depending on the scope, complexity, and duration. This particular award falls within the mid-to-large range for a single contract, reflecting a substantial need for specialized engineering expertise. To provide a more precise comparison, one would need to analyze the specific type of engineering services rendered and benchmark against similar procurements within the DoD's budget for that fiscal year.
What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type used in this award?
The primary risk associated with the Cost Plus Fixed Fee (CPFF) contract type is the potential for cost overruns and reduced incentive for the contractor to control expenses. In a CPFF contract, the government reimburses the contractor for all allowable costs incurred, plus a predetermined fixed fee representing profit. Unlike fixed-price contracts, there is less direct financial incentive for the contractor to minimize costs, as their profit is fixed regardless of the final cost. This can lead to the government paying more than anticipated if costs escalate. Effective oversight, rigorous cost auditing, and clear definition of allowable costs are crucial to mitigate these risks and ensure value for the taxpayer.
What is the significance of the contract being awarded under 'Full and Open Competition'?
Awarding a contract under 'Full and Open Competition' signifies that the government actively sought bids from all responsible sources, without restrictions. This is generally the preferred method of procurement as it maximizes competition, theoretically leading to the best value for the government in terms of price, quality, and innovation. It implies that the contracting agency did not limit the pool of potential bidders based on specific qualifications beyond those generally required for the service. For taxpayers, this means the contract was likely awarded after a thorough evaluation of multiple proposals, aiming to secure the most advantageous terms possible through market forces.
How does the duration of the contract (721 days) impact the overall value and risk?
A contract duration of 721 days (approximately two years) suggests a medium-term engagement for the engineering services. This duration allows for the completion of complex tasks and provides a degree of stability for both the contractor and the government. From a value perspective, a longer duration can sometimes lead to better economies of scale and more consistent service delivery. However, it also increases the risk of cost escalation due to inflation or changing requirements over time, especially with cost-reimbursable contract types. For the government, it necessitates sustained oversight to ensure the services remain relevant and cost-effective throughout the contract period.
What are the potential implications of the base award ($4.2M) being significantly lower than the total award ($30.5M)?
The substantial difference between the base award amount ($4.2 million) and the total award amount ($30.5 million) indicates that the majority of the contract's value is likely comprised of options, task orders, or indefinite-delivery/indefinite-quantity (IDIQ) components. This structure allows the government flexibility to order services as needed, up to the ceiling amount. For taxpayers, this means the full $30.5 million may not be spent if the government's needs are less than anticipated. However, it also carries the risk of scope creep or the potential for the full amount to be utilized if requirements expand, necessitating careful management and oversight to ensure funds are used judiciously.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
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: $42,569,297
Exercised Options: $42,569,297
Current Obligation: $30,491,550
Subaward Activity
Number of Subawards: 27
Total Subaward Amount: $3,091,835
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N6523613D4861
IDV Type: IDC
Timeline
Start Date: 2017-04-03
Current End Date: 2019-03-25
Potential End Date: 2019-03-25 00:00:00
Last Modified: 2022-08-25
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