Leidos awarded $37M for Navy IT services, highlighting need for robust computer systems design
Contract Overview
Contract Amount: $36,956,979 ($37.0M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2021-12-01
End Date: 2022-09-30
Contract Duration: 303 days
Daily Burn Rate: $122.0K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: NMCI SERVICES - SMIT 12/21 - NEW ORDERS
Place of Performance
Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23511
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $37.0 million to LEIDOS, INC. for work described as: NMCI SERVICES - SMIT 12/21 - NEW ORDERS Key points: 1. The contract value of $37 million for computer systems design services indicates significant investment in IT infrastructure. 2. Full and open competition suggests a healthy market for these services, potentially leading to competitive pricing. 3. The firm-fixed-price contract type shifts risk to the contractor, encouraging efficient service delivery. 4. This award falls within the broader IT sector, a critical area for modern defense operations. 5. The short performance period (approx. 10 months) suggests a focused project or task order within a larger program. 6. The absence of small business set-aside flags potential for large prime contractors to dominate.
Value Assessment
Rating: good
The $37 million award for computer systems design services appears reasonable given the scope of IT support required by the Department of the Navy. Benchmarking against similar large-scale IT service contracts within the defense sector suggests that this value is within expected ranges for comprehensive system design and integration. The firm-fixed-price nature of the contract further supports value by incentivizing cost control by the contractor.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. This process is designed to foster a competitive environment, which typically results in better pricing and service offerings for the government. The specific number of bidders is not provided, but the designation implies a robust bidding process.
Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs through market forces and ensuring the government receives the best possible value for its investment in IT services.
Public Impact
The Department of the Navy benefits from enhanced computer systems design and support, crucial for its operational readiness. This contract supports the delivery of essential IT services, likely impacting various naval operations and administrative functions. The primary geographic impact is within Virginia, where the contractor is located, suggesting potential for local IT workforce engagement. The contract likely supports a workforce of IT professionals, including systems designers, engineers, and support staff.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for vendor lock-in if this is a follow-on to a sole-source or limited competition contract.
- Scope creep could increase costs if not managed tightly, despite the fixed-price nature.
- Dependence on a single large contractor (Leidos) for critical IT functions.
- Cybersecurity risks associated with sensitive defense data handled by the contractor.
- Performance issues could arise if contractor resources are overstretched across multiple contracts.
Positive Signals
- Awarded through full and open competition, suggesting a competitive pricing environment.
- Firm-fixed-price contract type aligns incentives for efficient performance and cost control.
- Leidos is a large, established contractor with a significant presence in the federal IT space.
- The contract supports critical IT infrastructure for the Department of the Navy.
- The award signifies continued investment in modernizing defense IT systems.
Sector Analysis
This contract falls within the Computer Systems Design Services sector (NAICS 541512), a vital segment of the IT industry focused on planning and designing computer systems. The federal government is a major consumer of these services, particularly the Department of Defense, which relies heavily on advanced IT for command, control, and communications. Spending in this sector is driven by the need for system integration, cybersecurity, cloud migration, and modernization efforts across various agencies. Comparable spending benchmarks for large-scale IT design contracts within the defense sector often run into tens or hundreds of millions of dollars annually.
Small Business Impact
The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). As a large contract awarded to a major prime contractor, Leidos, it is likely that subcontracting opportunities may exist for small businesses. However, the extent of these opportunities and whether they meet small business subcontracting goals would require further investigation into the contract's specific terms and the contractor's subcontracting plan.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a delivery order under a larger contract vehicle, the oversight mechanisms are likely integrated into the existing framework of that vehicle. Transparency is generally facilitated through contract award databases like FPDS. Accountability is enforced through the firm-fixed-price terms and performance metrics, with potential for recourse if performance standards are not met. Inspector General jurisdiction would apply if fraud, waste, or abuse were suspected.
Related Government Programs
- NMCI (Navy Marine Corps Intranet)
- IT Services for Defense Agencies
- Computer Systems Design and Integration Contracts
- Department of Defense IT Modernization Programs
Risk Flags
- Potential for cost overruns if scope is not well-defined.
- Risk of performance deficiencies impacting critical Navy IT systems.
- Over-reliance on a single large contractor for essential services.
Tags
it-services, computer-systems-design, department-of-defense, department-of-the-navy, firm-fixed-price, full-and-open-competition, delivery-order, leidos-inc, virginia, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $37.0 million to LEIDOS, INC.. NMCI SERVICES - SMIT 12/21 - NEW ORDERS
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 $37.0 million.
What is the period of performance?
Start: 2021-12-01. End: 2022-09-30.
What is Leidos' track record with similar IT service contracts for the Department of the Navy?
Leidos, Inc. has a substantial track record of performing IT service contracts for the Department of the Navy and other federal agencies. They are a major prime contractor on various large-scale IT programs, including network modernization, cybersecurity, and enterprise IT services. Their experience often involves managing complex systems, integrating diverse technologies, and providing ongoing support. Analyzing their past performance on similar contracts, including any reported issues or successes, would provide context for their capability to execute this specific award effectively. Past performance evaluations and contract close-out reports, where available, are key resources for assessing their reliability and efficiency in delivering comparable services.
How does the $37 million value compare to other computer systems design contracts awarded by the Navy in the last fiscal year?
The $37 million award value for NMCI SERVICES - SMIT 12/21 - NEW ORDERS is a significant but not unprecedented figure for large IT service contracts within the Department of the Navy. To benchmark effectively, one would compare this value against other contracts awarded under NAICS code 541512 (Computer Systems Design Services) by the Navy over a similar period. For instance, if the Navy awarded several contracts in the $20-$50 million range for system design and integration, this award would be considered typical. Conversely, if most comparable contracts were substantially smaller or larger, it might warrant further scrutiny regarding the scope and complexity of the services required. Accessing historical contract data from sources like FPDS would allow for a precise comparison and assessment of whether this award represents a fair market price for the services rendered.
What are the primary risks associated with this firm-fixed-price contract for computer systems design?
While firm-fixed-price (FFP) contracts are generally favored for shifting risk to the contractor and promoting cost control, they are not without risks, especially in complex IT projects. For this contract, a primary risk is that the contractor, Leidos, might cut corners on quality or scope to maximize profit if the initial price estimate was too low or if unforeseen technical challenges arise. This could lead to suboptimal system design or performance issues down the line. Another risk is scope creep; if the requirements are not clearly defined or if the government requests significant changes, managing these modifications under an FFP structure can become contentious and may require contract modifications that could increase the overall cost. Furthermore, if Leidos lacks sufficient technical expertise or resources for the specific tasks, it could lead to delays and performance failures, impacting the Navy's operations.
How effective is 'full and open competition' in ensuring value for money for IT services like these?
Full and open competition is widely considered the most effective method for the government to ensure value for money in IT services. By allowing all responsible sources to submit bids, it maximizes the pool of potential offerors, thereby increasing the likelihood of receiving competitive pricing and innovative solutions. This competitive pressure incentivizes contractors to offer their best technical approach and most cost-effective pricing to win the contract. In the context of computer systems design, a robust competition can lead to the selection of a contractor who not only meets the technical requirements but does so at a price point that reflects true market value. While it requires more upfront effort in terms of solicitation and evaluation, the long-term benefits in terms of cost savings and superior service quality generally outweigh these initial investments for taxpayers.
What is the historical spending trend for computer systems design services by the Department of the Navy?
The Department of the Navy has consistently allocated significant funding towards computer systems design services, reflecting the critical role of IT in modern naval operations. Historical spending data typically shows a steady or increasing trend in this category over the past decade, driven by the need for network modernization, cybersecurity enhancements, data management solutions, and the integration of new technologies. Factors such as evolving threats, the adoption of cloud computing, and the demand for advanced analytics contribute to this sustained investment. Analyzing specific spending patterns for NAICS 541512 within the Navy reveals fluctuations based on major program initiatives and budget cycles, but the overall trajectory underscores the enduring importance and substantial financial commitment to these services.
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 - APLLICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
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: $36,956,979
Exercised Options: $36,956,979
Current Obligation: $36,956,979
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0003920D0054
IDV Type: IDC
Timeline
Start Date: 2021-12-01
Current End Date: 2022-09-30
Potential End Date: 2022-09-30 00:00:00
Last Modified: 2022-04-02
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