Leidos Inc. awarded $60.4M for IT support, with a significant portion allocated to engineering services
Contract Overview
Contract Amount: $60,422,690 ($60.4M)
Contractor: Leidos Inc
Awarding Agency: Department of Defense
Start Date: 2008-11-18
End Date: 2013-03-31
Contract Duration: 1,594 days
Daily Burn Rate: $37.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: IT
Official Description: INFORMATION TECHNOLOGY SUPPORT SERVICES
Place of Performance
Location: MILLINGTON, SHELBY County, TENNESSEE, 38053, UNITED STATES OF AMERICA
Plain-Language Summary
Department of Defense obligated $60.4 million to LEIDOS INC for work described as: INFORMATION TECHNOLOGY SUPPORT SERVICES Key points: 1. Contract value of $60.4 million over approximately 5 years indicates a substantial investment in IT support. 2. The award to Leidos Inc. suggests a focus on established, large-scale IT service providers. 3. The 'Cost Plus Award Fee' contract type introduces performance incentives but can lead to less predictable final costs. 4. Engineering services (NAICS 541330) as a component suggests complex technical requirements beyond standard IT support. 5. The contract duration of 1594 days (approx. 4.3 years) aligns with typical IT modernization or sustainment cycles. 6. Awarded under full and open competition, this contract likely benefited from a broad range of potential bidders.
Value Assessment
Rating: fair
The total award of $60.4 million for IT support and engineering services over nearly five years requires careful benchmarking against similar large-scale contracts. Without specific performance metrics or detailed cost breakdowns, assessing the precise value-for-money is challenging. The 'Cost Plus Award Fee' structure means the final cost could exceed initial estimates, depending on performance. However, the fact that it was awarded under full and open competition suggests that the pricing was likely competitive at the time of award.
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. This approach typically fosters a competitive environment, encouraging multiple bidders to offer their best pricing and technical solutions. The presence of a robust competition is generally favorable for price discovery and ensuring the government receives a competitive offer.
Taxpayer Impact: A full and open competition means taxpayers benefit from a wider pool of potential contractors, which can drive down costs and improve the quality of services received.
Public Impact
The Department of the Navy benefits from enhanced IT support and engineering services, crucial for its operational readiness. This contract likely supports various naval IT infrastructure, systems, and potentially advanced technological development. The geographic impact is likely concentrated around naval bases and facilities where Leidos Inc. personnel are deployed. The contract supports a workforce of IT professionals, engineers, and support staff, contributing to employment in the technology sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Award Fee contracts can sometimes lead to cost overruns if performance incentives are not tightly managed.
- The broad scope of 'Engineering Services' alongside IT support may indicate potential for scope creep if not clearly defined.
- Reliance on a single large contractor like Leidos Inc. for critical IT functions could pose a risk if performance falters.
Positive Signals
- Awarded under full and open competition, suggesting a competitive bidding process that likely secured favorable terms.
- Leidos Inc. is a large, established government contractor with a significant track record in IT and engineering services.
- The contract duration suggests a stable, long-term need for these services, indicating strategic planning by the agency.
Sector Analysis
The Information Technology (IT) sector, particularly within defense agencies, is characterized by rapid technological evolution and significant government spending. This contract for IT support and engineering services fits within the broader trend of defense departments outsourcing complex technical functions to specialized firms. The market for such services is highly competitive, with major players like Leidos Inc. often securing large-scale contracts due to their expertise and capacity. Comparable spending benchmarks would typically involve analyzing other large IT support and engineering contracts awarded by the Department of Defense or other federal agencies.
Small Business Impact
This contract was awarded under full and open competition and does not indicate a specific small business set-aside. While Leidos Inc. is a large business, there is no explicit information provided regarding subcontracting plans for small businesses. The absence of a set-aside suggests that the primary award was not targeted at small businesses, though subcontracting opportunities may still exist.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. The 'Cost Plus Award Fee' structure necessitates close monitoring of performance against defined award criteria to ensure value for money. Transparency is generally maintained through contract reporting mechanisms, and the Inspector General's office for the Department of Defense would have jurisdiction for audits and investigations into potential fraud, waste, or abuse.
Related Government Programs
- Department of Defense IT Services
- Naval Information Technology Modernization
- Engineering Services for Federal Agencies
- Large-Scale IT Support Contracts
- Cost Plus Award Fee Contracts
Risk Flags
- Cost Plus Award Fee contract type requires careful performance monitoring to manage final costs.
- Scope definition for combined IT support and engineering services needs to be precise to avoid creep.
- Reliance on a single large contractor for critical functions warrants close performance oversight.
Tags
information-technology, it-support, engineering-services, department-of-defense, department-of-the-navy, leidos-inc, cost-plus-award-fee, full-and-open-competition, large-contract, federal-contract, defense-sector, navy-it
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $60.4 million to LEIDOS INC. INFORMATION TECHNOLOGY 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 $60.4 million.
What is the period of performance?
Start: 2008-11-18. End: 2013-03-31.
What is Leidos Inc.'s track record with similar IT support and engineering contracts within the Department of Defense?
Leidos Inc. has a substantial and well-documented track record with the Department of Defense (DoD) and other federal agencies, frequently securing large contracts for IT services, systems engineering, and complex technical support. Their portfolio includes work on command and control systems, cybersecurity, enterprise IT infrastructure, and data analytics. For instance, they have held numerous prime contracts supporting various branches of the military, often involving sustainment, modernization, and integration of critical systems. Their history suggests a capacity to manage large, complex programs and a familiarity with the DoD's procurement processes and technical requirements. Analyzing specific past performance reviews and contract awards would provide a more granular understanding of their success rates and areas of expertise relevant to this particular contract.
How does the 'Cost Plus Award Fee' (CPAF) structure compare to other contract types for IT services in terms of cost predictability?
The 'Cost Plus Award Fee' (CPAF) contract type is designed to incentivize contractor performance by allowing for a base fee plus an additional award fee based on meeting or exceeding specific performance objectives. Compared to 'Cost Plus Fixed Fee' (CPFF) or 'Firm Fixed Price' (FFP) contracts, CPAF offers less cost predictability than FFP, where the price is fixed regardless of costs incurred. It offers more flexibility than CPFF, which has a fixed total cost. However, the 'award fee' component means the final cost can fluctuate significantly based on subjective performance evaluations, making it harder to forecast the total expenditure precisely. This structure is often used when performance requirements are difficult to define precisely upfront or when significant innovation and high performance are desired, but it requires robust oversight to manage costs effectively.
What are the potential risks associated with awarding a large IT support contract under full and open competition?
While full and open competition is generally beneficial for price discovery and fostering a competitive market, potential risks exist. One risk is that the lowest bidder might not always be the best value if technical capabilities or past performance are not adequately weighted. Another concern is that the sheer volume of bids could overwhelm the evaluation team, potentially leading to rushed assessments. Furthermore, if the technical requirements are highly specialized, only a few large companies might be capable of bidding, diminishing the 'full and open' aspect in practice. There's also a risk that contractors might underbid to win the contract, intending to seek change orders or modifications later to increase the price, especially under flexible contract types like CPAF.
How does the $60.4 million award compare to typical IT support spending within the Department of the Navy?
The $60.4 million award for IT support and engineering services represents a significant, but not extraordinary, investment within the Department of the Navy's overall IT budget. The Navy, like other branches of the military, spends billions annually on IT infrastructure, cybersecurity, software development, and support services. This particular contract, spanning approximately 4.3 years, suggests a substantial, long-term requirement for specialized support. To provide a precise comparison, one would need to analyze historical spending data for similar IT support and engineering services contracts awarded by the Navy, looking at both the total value and the duration. However, it is indicative of a major program or a critical set of services requiring substantial resources.
What are the implications of the 'Engineering Services' component (NAICS 541330) being included with IT support?
Including 'Engineering Services' (NAICS 541330) alongside IT support suggests that this contract goes beyond routine help desk functions or basic network maintenance. It implies that the contractor will be involved in the design, development, integration, or sustainment of complex systems that require engineering expertise. This could encompass areas like naval combat systems, communication networks, data processing architectures, or specialized software engineering. The integration of engineering services indicates a need for higher-level technical skills and potentially a more direct role in shaping or maintaining the technological capabilities of the Navy. This also means the contract's scope is likely broader and more technically demanding than a standard IT services contract.
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
Solicitation ID: N0002406R3522
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Science Applications International Corporation (UEI: 078745061)
Address: 1710 SAIC DR, MC LEAN, VA, 22102
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $61,675,992
Exercised Options: $61,675,992
Current Obligation: $60,422,690
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0017804D4119
IDV Type: IDC
Timeline
Start Date: 2008-11-18
Current End Date: 2013-03-31
Potential End Date: 2013-03-31 00:00:00
Last Modified: 2016-02-16
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