Leidos awarded $21.6M for Navy's RSDE-II program, focusing on advanced navigation and guidance systems
Contract Overview
Contract Amount: $21,614,000 ($21.6M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2018-08-23
End Date: 2025-09-30
Contract Duration: 2,595 days
Daily Burn Rate: $8.3K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: RSDE-II
Place of Performance
Location: GAITHERSBURG, MONTGOMERY County, MARYLAND, 20879
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $21.6 million to LEIDOS, INC. for work described as: RSDE-II Key points: 1. Contract value represents a significant investment in critical defense technology. 2. Full and open competition suggests a robust market for these specialized systems. 3. The Cost Plus Fixed Fee structure requires careful monitoring of contractor expenses. 4. Long performance period indicates a sustained need for these capabilities. 5. Focus on navigation and guidance systems highlights a key area of military modernization. 6. The contract is managed by the Department of the Navy, aligning with naval operational needs.
Value Assessment
Rating: good
The contract's value of $21.6 million for the RSDE-II program appears reasonable given the specialized nature of search, detection, navigation, guidance, aeronautical, and nautical systems. Benchmarking against similar complex system development contracts is challenging without more specific details on the scope of work. However, the fixed fee component within the Cost Plus Fixed Fee structure provides some cost control for the government, suggesting an effort to achieve value for money. The duration of the contract also implies a phased approach to development and delivery, which can be cost-effective for complex projects.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple capable vendors were allowed to bid. This approach typically fosters a competitive environment, driving innovation and potentially leading to more favorable pricing for the government. The specific number of bidders is not provided, but the designation suggests a healthy level of market interest and capability for these advanced systems.
Taxpayer Impact: Full and open competition is beneficial for taxpayers as it maximizes the potential for cost savings and ensures that the government receives the best possible value by leveraging the widest range of industry capabilities.
Public Impact
The primary beneficiaries are the U.S. Navy personnel who will utilize the advanced navigation and guidance systems. The contract delivers critical technological enhancements for naval operations, improving situational awareness and mission effectiveness. Geographic impact is primarily within the operational theaters of the U.S. Navy, with potential applications globally. Workforce implications include specialized engineering, manufacturing, and technical support roles within the contractor's organization and potentially its subcontractors.
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 if not closely managed.
- The long performance period (2018-2025) requires sustained government oversight to ensure continued alignment with evolving requirements.
- Reliance on a single prime contractor (Leidos, Inc.) for such a critical system warrants attention to potential single points of failure or dependency.
Positive Signals
- Awarded through full and open competition, indicating a competitive market and potential for best value.
- The contract focuses on advanced technology crucial for national security, suggesting a strategic investment.
- The fixed fee component in the contract type provides a degree of cost predictability for the government.
Sector Analysis
The contract falls within the Information Technology and Defense sectors, specifically focusing on the manufacturing and integration of sophisticated navigation, guidance, and detection systems. This market is characterized by high barriers to entry due to specialized knowledge, research and development investment, and stringent quality requirements. Spending in this area is driven by the need for technological superiority in defense applications, with major players like Leidos investing heavily in R&D to maintain a competitive edge. Comparable spending benchmarks would typically involve other large-scale defense system development and integration contracts.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). While Leidos, Inc. is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will depend on Leidos's subcontracting plan and the availability of small businesses capable of providing specialized components or services required for the RSDE-II program. Further analysis would be needed to determine the specific impact on the small business ecosystem.
Oversight & Accountability
Oversight for this contract is primarily managed by the Department of the Navy's contracting and program management offices. Accountability measures are embedded within the Cost Plus Fixed Fee contract structure, requiring detailed reporting of costs and progress. Transparency is facilitated through contract award notices and reporting requirements. While specific Inspector General (IG) jurisdiction is not detailed, the Department of Defense's IG office would likely have oversight responsibilities for significant defense contracts to ensure efficiency and prevent fraud.
Related Government Programs
- Naval Integrated Flight Control Systems
- Advanced Sensor Technology Development
- Defense Navigation and Guidance Systems
- Aeronautical and Nautical Instrument Manufacturing
- Search and Detection Systems Modernization
Risk Flags
- Cost Overrun Risk (CPFF)
- Long-Term Program Management
- Supply Chain Dependency
- Technological Obsolescence
Tags
defense, department-of-the-navy, leidos-inc, rsde-ii, navigation-systems, guidance-systems, search-and-detection, full-and-open-competition, cost-plus-fixed-fee, delivery-order, system-manufacturing, maryland
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $21.6 million to LEIDOS, INC.. RSDE-II
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 $21.6 million.
What is the period of performance?
Start: 2018-08-23. End: 2025-09-30.
What is Leidos, Inc.'s track record with similar Department of Defense navigation and guidance system contracts?
Leidos, Inc. has a substantial track record with the Department of Defense, including numerous contracts related to complex systems integration, navigation, and guidance technologies. They have been involved in developing and supporting various platforms, from aircraft to naval vessels. Their experience often includes managing large-scale programs, integrating advanced sensors, and ensuring system reliability in demanding operational environments. Specific to navigation and guidance, Leidos has a history of delivering solutions that enhance situational awareness, improve targeting accuracy, and ensure mission success. This includes work on both hardware and software components, as well as system-level testing and validation. Their performance on prior contracts, often awarded through competitive processes, suggests a capacity to handle programs like RSDE-II, though specific performance metrics for past contracts would require deeper investigation.
How does the $21.6 million award for RSDE-II compare to other similar system development contracts within the Navy or DoD?
The $21.6 million award for the RSDE-II program, spread over its performance period, represents a moderate investment for a specialized defense system development contract. To provide a precise comparison, one would need to identify contracts with highly similar scopes, such as the development or significant upgrade of integrated navigation, guidance, and search/detection systems for naval platforms. Contracts for full-system development of major weapon systems or platforms can range from tens of millions to billions of dollars. However, for specific component or subsystem development and integration, $21.6 million is within a common range. Factors like the maturity of the technology, the number of components involved, and the level of integration complexity significantly influence cost. Without more granular detail on RSDE-II's specific deliverables, direct benchmarking remains approximate, but it appears to be a focused investment rather than a program of record for a major new platform.
What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this program?
The primary risk with a Cost Plus Fixed Fee (CPFF) contract type for the RSDE-II program is the potential for cost overruns, where the contractor's actual costs exceed initial estimates. While the 'fixed fee' provides the contractor with a predetermined profit margin, the government bears the risk of covering all allowable costs. If the contractor is not diligent in managing expenses, or if unforeseen technical challenges significantly increase the cost of development and integration, the total government expenditure could rise substantially. This necessitates robust government oversight to scrutinize allowable costs, ensure efficiency, and prevent unnecessary spending. The contractor, conversely, has less incentive to control costs compared to fixed-price contracts, as their fee is fixed regardless of the final cost, though they are motivated to complete the work to earn that fee.
How effective is the 'full and open competition' strategy likely to be in ensuring the best value for taxpayers on this contract?
The 'full and open competition' strategy is generally highly effective in ensuring the best value for taxpayers, especially for complex technological procurements like the RSDE-II program. By allowing all responsible sources to submit bids, the government maximizes the pool of potential offerors, thereby increasing the likelihood of receiving competitive proposals that offer innovative solutions and aggressive pricing. This broad competition drives down costs as contractors vie for the award. Furthermore, it ensures that the government is not limited to a single provider, which could lead to higher prices and less innovation. The success of this strategy hinges on the clarity of the government's requirements and the evaluation criteria, ensuring that the 'best value' is determined not just on price but also on technical merit, past performance, and risk mitigation, all of which contribute to long-term taxpayer benefit.
What are the historical spending patterns for navigation, guidance, and related systems within the Department of the Navy?
Historical spending patterns for navigation, guidance, and related systems within the Department of the Navy (DoN) show a consistent and significant investment driven by the critical nature of these technologies for naval operations. The DoN allocates substantial funds annually towards the research, development, procurement, and sustainment of advanced systems that ensure precise navigation, accurate targeting, and effective situational awareness across its diverse fleet, including surface ships, submarines, and aircraft. Spending trends often reflect modernization efforts, upgrades to existing platforms, and the integration of new technologies to maintain a strategic advantage. This includes investments in inertial navigation systems, GPS/GNSS receivers, radar, sonar, electro-optical/infrared sensors, and associated processing and display systems. The overall budget allocation for such systems can fluctuate based on geopolitical conditions, strategic priorities, and the lifecycle of naval assets, but it remains a core area of expenditure.
What is the potential impact of this contract on the market for specialized navigation and guidance system components?
This contract, awarded to Leidos, Inc. for the RSDE-II program, could have a notable impact on the market for specialized navigation and guidance system components. As a significant award, it will likely drive demand for specific sub-components, sensors, processors, and software modules that fall under the umbrella of search, detection, navigation, and guidance systems. Leidos, as the prime contractor, will likely engage multiple suppliers and subcontractors, potentially creating opportunities for established firms and innovative small businesses specializing in these niche areas. The contract's emphasis on advanced capabilities may also spur further research and development within the supply chain, encouraging suppliers to enhance their offerings to meet stringent defense requirements. Conversely, the concentration of work with a single prime could also lead to consolidation among suppliers or increased competition for subcontracts.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N6893614R0028
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 700 N FREDERICK AVE, GAITHERSBURG, MD, 20879
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $21,646,880
Exercised Options: $21,646,880
Current Obligation: $21,614,000
Subaward Activity
Number of Subawards: 3
Total Subaward Amount: $712,054
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N6893616D0018
IDV Type: IDC
Timeline
Start Date: 2018-08-23
Current End Date: 2025-09-30
Potential End Date: 2025-09-30 00:00:00
Last Modified: 2025-09-08
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