DoD Awards $14.5M Contract to Leidos for Navigation Systems, Facing Potential Cost Overruns
Contract Overview
Contract Amount: $14,549,119 ($14.5M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2023-04-27
End Date: 2027-09-08
Contract Duration: 1,595 days
Daily Burn Rate: $9.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: AEWTTR ABE&PS
Place of Performance
Location: RIDGECREST, KERN County, CALIFORNIA, 93555
Plain-Language Summary
Department of Defense obligated $14.5 million to LEIDOS, INC. for work described as: AEWTTR ABE&PS Key points: 1. Leidos, Inc. secured a significant contract for navigation systems, highlighting their role in defense technology. 2. The contract's cost-plus-fixed-fee structure introduces potential for cost escalation beyond initial estimates. 3. Competition was full and open, suggesting a competitive pricing environment, though the final price is still under scrutiny. 4. The sector is critical for defense operations, underscoring the importance of reliable and cost-effective equipment.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee (CPFF) structure raises concerns about potential cost overruns. While the award amount is $14.5M, the final cost could exceed this if expenses increase significantly. Benchmarking per-unit costs is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating a robust bidding process. However, the CPFF pricing type may limit the effectiveness of price discovery, as the contractor is reimbursed for costs plus a fixed fee, potentially reducing incentives for strict cost control.
Taxpayer Impact: Taxpayer funds are utilized for this contract. While competition aims for fair pricing, the CPFF structure warrants close monitoring to ensure costs remain reasonable and avoid unnecessary expenditure.
Public Impact
Enhances critical navigation capabilities for the Department of the Navy. Supports advanced technological development in defense systems. Potential for increased costs could impact future defense budgets. Ensures operational readiness through specialized equipment.
Waste & Efficiency Indicators
Waste Risk Score: 75 / 10
Warning Flags
- Cost-plus-fixed-fee pricing structure
- Potential for cost overruns
- Long contract duration
Positive Signals
- Full and open competition
- Critical defense technology
- Experienced contractor
Sector Analysis
This contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector, a key area for defense technology. Spending in this sector is often high due to the need for advanced and reliable systems, with benchmarks varying based on technological complexity and specific system requirements.
Small Business Impact
The data indicates this contract was not awarded to small businesses, as Leidos, Inc. is a large corporation. There is no specific information provided regarding subcontracting opportunities for small businesses within this award.
Oversight & Accountability
The Department of Defense, specifically the Department of the Navy, is responsible for oversight. The CPFF contract type necessitates diligent monitoring of costs and performance to ensure accountability and prevent waste, fraud, and abuse.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Cost-plus-fixed-fee pricing increases risk of cost overruns.
- Long contract duration (over 4 years) presents extended risk exposure.
- Reliance on a single large prime contractor.
- Potential for scope creep given the nature of R&D and system integration.
Tags
search-detection-navigation-guidance-aer, department-of-defense, ca, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $14.5 million to LEIDOS, INC.. AEWTTR ABE&PS
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 $14.5 million.
What is the period of performance?
Start: 2023-04-27. End: 2027-09-08.
What specific cost drivers are anticipated under this CPFF contract, and how will they be monitored to prevent budget overruns?
The contract likely involves costs related to research and development, materials, labor, and overhead for navigation systems. The Department of the Navy will monitor these through regular financial reporting, audits, and performance reviews. Specific cost drivers will be detailed in the contract's statement of work and cost-reimbursement clauses, with established thresholds for fee adjustments or potential renegotiation if costs exceed projections significantly.
How does the performance of Leidos, Inc. on similar navigation system contracts inform the risk assessment for this award?
Leidos, Inc. has a track record in defense contracting, including navigation systems. Past performance data, including on-time delivery, quality, and cost control on similar projects, would inform the risk assessment. A review of their historical performance would reveal any recurring issues with cost overruns or schedule delays, allowing the agency to implement targeted oversight measures or require performance improvement plans if necessary.
What is the expected impact of these navigation systems on the operational effectiveness of the Department of the Navy's assets?
These systems are crucial for enhancing the precision, reliability, and safety of naval operations, including aircraft and vessels. Improved navigation directly contributes to mission success, reduced operational risks, and potentially faster deployment times. The advanced capabilities provided by these systems are vital for maintaining situational awareness and executing complex maneuvers in diverse operational environments.
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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: N6893620R0081
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 1121 W REEVES AVE, RIDGECREST, CA, 93555
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $17,802,344
Exercised Options: $14,549,374
Current Obligation: $14,549,119
Subaward Activity
Number of Subawards: 10
Total Subaward Amount: $2,674,504
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N6893622D0021
IDV Type: IDC
Timeline
Start Date: 2023-04-27
Current End Date: 2027-09-08
Potential End Date: 2028-04-26 00:00:00
Last Modified: 2025-12-22
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