Leidos Inc. contract for computer systems design services awarded by Treasury IRS for $27.16M
Contract Overview
Contract Amount: $27,159,917 ($27.2M)
Contractor: Leidos, Inc.
Awarding Agency: Department of the Treasury
Start Date: 2007-08-22
End Date: 2013-08-02
Contract Duration: 2,172 days
Daily Burn Rate: $12.5K/day
Competition Type: COMPETITIVE DELIVERY ORDER
Number of Offers Received: 4
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: INFRASTRUCTURE ROADMAP
Place of Performance
Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706
State: Maryland Government Spending
Plain-Language Summary
Department of the Treasury obligated $27.2 million to LEIDOS, INC. for work described as: INFRASTRUCTURE ROADMAP Key points: 1. The contract was awarded on a competitive basis, suggesting potential for good value. 2. The duration of the contract (2172 days) indicates a long-term need for these services. 3. The Cost Plus Fixed Fee (CPFF) pricing structure can incentivize contractor efficiency but requires careful oversight. 4. The services provided fall under Computer Systems Design, a critical area for government operations. 5. The contract was awarded to a large business, with no indication of small business set-aside. 6. The geographic location of performance is Maryland.
Value Assessment
Rating: fair
Benchmarking the value of this specific contract is challenging without more detailed cost breakdowns and comparisons to similar, contemporaneous contracts for computer systems design services. The CPFF structure, while common, can lead to cost overruns if not managed tightly. The total award amount of $27.16 million over approximately six years suggests a moderate annual spend, but the true value for money depends heavily on the deliverables and performance outcomes achieved.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded as a 'COMPETITIVE DELIVERY ORDER,' indicating it was competed under full and open competition. The presence of 4 bidders (as indicated by 'no': 4) suggests a reasonable level of competition for this requirement. A competitive process generally allows for price discovery and can lead to more favorable pricing for the government compared to sole-source awards.
Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers, as it likely resulted in a more efficient allocation of funds and potentially lower costs than if the contract had been awarded without robust competition.
Public Impact
The primary beneficiary of this contract is the Internal Revenue Service (IRS), which receives essential computer systems design services. These services are crucial for maintaining and improving the technological infrastructure that supports tax administration and processing. The geographic impact is primarily in Maryland, where the contract performance is located. The contract supports a workforce skilled in computer systems design and related IT services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee (CPFF) contracts require diligent oversight to ensure costs remain within reasonable bounds and that the fixed fee is justified by the scope of work.
- The long duration of the contract (2172 days) necessitates ongoing performance monitoring to ensure continued relevance and effectiveness of the services provided.
- Without specific performance metrics, it's difficult to fully assess the effectiveness and efficiency of the contractor's work.
Positive Signals
- The contract was awarded through full and open competition, indicating a robust selection process.
- The award to a known entity like Leidos, Inc. suggests a contractor with established capabilities in the IT sector.
- The services procured are fundamental to the operational needs of a major government agency like the IRS.
Sector Analysis
Computer Systems Design Services (NAICS 541512) is a significant sector within the IT industry, encompassing a wide range of activities from system analysis and design to implementation and support. Government spending in this area is substantial, driven by the need to modernize legacy systems, enhance cybersecurity, and develop new digital capabilities. Comparable contracts in this space can range from millions to hundreds of millions of dollars, depending on the complexity and scale of the systems involved. This contract appears to be of moderate size within this sector.
Small Business Impact
The data indicates this contract was awarded to a large business (Leidos, Inc.) and was not a small business set-aside. There is no explicit information regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, unless Leidos actively engages small businesses as subcontractors.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting agency, the Department of the Treasury's Internal Revenue Service, through designated contracting officers and program managers. Accountability measures are inherent in the CPFF contract type, which requires detailed reporting and justification of costs. Transparency is generally facilitated through contract award databases, though specific performance details and cost breakdowns may be less publicly accessible. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- IRS IT Modernization Programs
- Treasury Department IT Services
- Federal Civilian Agency IT Contracts
- Computer Systems Design Services Contracts
Risk Flags
- Cost Plus Fixed Fee contract type requires robust oversight.
- Long contract duration increases risk of obsolescence or changing requirements.
- No explicit mention of small business subcontracting goals.
Tags
it, computer-systems-design, department-of-the-treasury, internal-revenue-service, competitive-delivery-order, cost-plus-fixed-fee, large-business, maryland, federal-civilian, information-technology
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $27.2 million to LEIDOS, INC.. INFRASTRUCTURE ROADMAP
Who is the contractor on this award?
The obligated recipient is LEIDOS, INC..
Which agency awarded this contract?
Awarding agency: Department of the Treasury (Internal Revenue Service).
What is the total obligated amount?
The obligated amount is $27.2 million.
What is the period of performance?
Start: 2007-08-22. End: 2013-08-02.
What was the specific scope of work for Leidos, Inc. under this computer systems design services contract?
The provided data indicates the contract falls under NAICS code 541512 (Computer Systems Design Services). While the specific scope of work is not detailed, this typically includes activities such as analyzing user needs and designing information systems solutions, consulting services, and developing custom software. For the IRS, this could involve designing, developing, or integrating systems related to tax processing, taxpayer accounts, data management, or internal operational systems. The Cost Plus Fixed Fee structure suggests that the contractor was reimbursed for allowable costs plus a predetermined fixed fee for their efforts.
How does the $27.16 million award amount compare to other similar IRS or Treasury IT contracts awarded around the same period (2007-2013)?
Comparing the $27.16 million award value requires context regarding the specific IT services procured and the contract duration. Contracts for computer systems design can vary significantly in price based on complexity, duration, and the number of bidders. Given the contract spanned approximately six years (2172 days), the average annual value was roughly $4.5 million. This is a moderate amount for a large federal agency like the IRS, which often engages in much larger IT modernization efforts. Without access to a comprehensive database of contemporaneous IRS/Treasury IT contracts with similar scopes, a precise benchmark is difficult, but this award appears to be for a substantial, long-term project rather than a small, short-term task order.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude and duration?
The primary risks with a CPFF contract of this nature include potential cost overruns if the contractor's costs exceed initial estimates, although the fixed fee provides a ceiling on profit. There's also a risk of scope creep, where the project expands beyond its original intent without adequate adjustments to the fee or schedule. For the government, effective oversight is crucial to ensure that all costs claimed are allowable, reasonable, and allocable to the contract. Contractor performance is another risk; if the contractor fails to deliver the required system design or quality, the government may not achieve its desired outcomes. The long duration increases the risk of technological obsolescence or changes in government requirements that may necessitate contract modifications.
What does the fact that this contract was awarded competitively with 4 bidders imply about the contractor's performance and pricing?
The competitive award with four bidders suggests that the government received multiple proposals and likely selected the offer that represented the best value, considering both technical approach and price. This level of competition generally pressures contractors to offer competitive pricing and demonstrate strong capabilities. For Leidos, Inc., winning this contract indicates they were deemed a capable provider among their peers. While the competitive process aims for fair pricing, the CPFF structure still requires diligent government oversight to ensure costs remain controlled throughout the contract's life. The presence of multiple bidders increases the likelihood that the government secured a reasonable price for the services rendered.
What are the potential implications for the IRS's IT infrastructure and operations given this contract's focus on computer systems design?
A contract focused on computer systems design for the IRS has significant implications for its IT infrastructure and operations. It suggests the IRS was undertaking efforts to update, enhance, or develop new systems to support its core mission of tax administration. This could involve improvements in areas like taxpayer data management, processing efficiency, security protocols, or the development of new digital services for taxpayers. The success of this contract would directly impact the IRS's ability to operate efficiently, securely, and in compliance with evolving technological standards and legal requirements. Conversely, any shortcomings could lead to operational inefficiencies or security vulnerabilities.
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 › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: COMPETITIVE DELIVERY ORDER
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 4
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc. (UEI: 611641312)
Address: 1710 SAIC DR, MCLEAN, VA, 22102
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $34,689,267
Exercised Options: $28,462,266
Current Obligation: $27,159,917
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Parent Contract
Parent Award PIID: TIRNO06D00020
IDV Type: IDC
Timeline
Start Date: 2007-08-22
Current End Date: 2013-08-02
Potential End Date: 2013-08-02 00:00:00
Last Modified: 2017-07-20
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