Leidos Inc. awarded $40.1M contract for wired telecommunications, highlighting potential value in long-term IT infrastructure
Contract Overview
Contract Amount: $40,130,778 ($40.1M)
Contractor: Leidos Inc
Awarding Agency: Department of Defense
Start Date: 2011-08-01
End Date: 2012-11-12
Contract Duration: 469 days
Daily Burn Rate: $85.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: BASE YEAR - LABOR
Place of Performance
Location: CHARLESTON, CHARLESTON County, SOUTH CAROLINA, 29406, UNITED STATES OF AMERICA
Plain-Language Summary
Department of Defense obligated $40.1 million to LEIDOS INC for work described as: BASE YEAR - LABOR Key points: 1. Contract value suggests significant investment in essential communication services. 2. Competition dynamics for this contract type warrant further examination for optimal pricing. 3. Performance history of Leidos Inc. will be a key indicator of successful delivery. 4. This contract falls within the broader IT services sector, supporting critical infrastructure. 5. The firm-fixed-price structure aims to control costs and manage contractor risk. 6. Geographic focus on South Carolina indicates localized infrastructure development.
Value Assessment
Rating: good
The base year labor cost of $40.1 million for wired telecommunications services appears substantial, suggesting a significant scope of work. Benchmarking against similar contracts for telecommunications infrastructure in the Department of Defense would provide a clearer picture of value for money. The firm-fixed-price contract type generally offers good cost control, but the ultimate value depends on the efficiency of service delivery and the accuracy of the initial cost estimation. Without more granular data on the specific services rendered and their market rates, a definitive value assessment is challenging, but the scale of the award suggests a critical need.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. This competitive process is generally favorable for price discovery and ensuring the government receives competitive pricing. The number of bidders is not specified, but the 'full and open' designation suggests a robust bidding environment. This approach aims to leverage the market to secure the best possible terms and services for the government.
Taxpayer Impact: Full and open competition typically benefits taxpayers by driving down prices through market forces, ensuring that the government is not overpaying for essential services and that resources are used efficiently.
Public Impact
The Department of the Navy benefits from enhanced wired telecommunications capabilities, crucial for operational readiness. Services delivered likely include installation, maintenance, and support of critical communication networks. The geographic impact is concentrated in South Carolina, supporting regional military installations. Workforce implications may include the need for skilled technicians and support staff in the specified region.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if scope creep occurs despite fixed-price structure.
- Dependence on a single contractor for critical infrastructure could pose long-term risks.
- Ensuring adequate performance monitoring to meet service level agreements.
Positive Signals
- Firm-fixed-price contract provides cost certainty for the government.
- Full and open competition suggests a competitive award process.
- Award to a known entity like Leidos Inc. may indicate a track record of capability.
Sector Analysis
This contract falls within the telecommunications services sector, specifically supporting wired infrastructure. The market for government telecommunications services is substantial, with agencies constantly seeking reliable and secure communication networks. This contract likely supports the modernization or maintenance of existing networks, fitting into a broader trend of government investment in IT and communication infrastructure to ensure operational effectiveness and data security. Comparable spending benchmarks would involve looking at other large-scale telecommunications support contracts awarded by the Department of Defense or other federal agencies.
Small Business Impact
The data indicates that small business participation was not a primary set-aside consideration for this contract (ss: false, sb: false). While Leidos Inc. is a large prime contractor, the implications for small businesses would primarily be through potential subcontracting opportunities. The extent to which Leidos Inc. engages small businesses as subcontractors will determine the direct impact on the small business ecosystem. Without specific subcontracting plans, it's difficult to assess the full impact, but large prime contracts often create downstream opportunities for specialized small businesses.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the program management office within the Department of the Navy. Accountability measures are embedded in the firm-fixed-price contract terms, with penalties for non-performance or failure to meet service level agreements. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.
Related Government Programs
- Department of Defense IT Services
- Federal Telecommunications Contracts
- Wired Network Infrastructure
- Navy Communication Systems
Risk Flags
- Potential for cost overruns if scope is not well-defined.
- Dependence on contractor for critical infrastructure.
- Cybersecurity vulnerabilities in network infrastructure.
- Ensuring adequate performance and service levels.
Tags
it, defense, department-of-the-navy, south-carolina, wired-telecommunications-carriers, firm-fixed-price, full-and-open-competition, large-business, information-technology, telecommunications-services, infrastructure
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $40.1 million to LEIDOS INC. BASE YEAR - LABOR
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 $40.1 million.
What is the period of performance?
Start: 2011-08-01. End: 2012-11-12.
What is the historical spending pattern for wired telecommunications services by the Department of the Navy?
Analyzing historical spending patterns for wired telecommunications services by the Department of the Navy is crucial for understanding budget allocation trends and identifying potential areas of overspending or underspending. While this specific contract represents a $40.1 million base year award, a comprehensive review would involve examining annual expenditures over the past 5-10 years. This analysis should differentiate between contract types (e.g., firm-fixed-price, cost-plus), service providers, and specific network infrastructure components (e.g., fiber optics, copper cabling, switching equipment). Understanding these patterns can reveal shifts in technology adoption, the impact of competitive bidding on overall costs, and the long-term strategic investments the Navy is making in its communication backbone. For instance, a consistent increase in spending might indicate a push towards network modernization, while significant fluctuations could point to one-time upgrades or changes in service requirements. Benchmarking this contract's value against historical averages for similar services would provide context on whether the current award is within expected financial parameters.
How does the performance history of Leidos Inc. on similar government contracts compare to industry benchmarks?
Assessing the performance history of Leidos Inc. on similar government contracts is vital for evaluating their capability and reliability in delivering the contracted wired telecommunications services. This involves reviewing past contract awards, their duration, value, and the specific services provided. Key performance indicators (KPIs) to examine include on-time delivery, adherence to budget (especially relevant for fixed-price contracts), quality of service, and customer satisfaction ratings, often reflected in past performance reviews or CPARS (Contractor Performance Assessment Reporting System) data. Comparing these metrics against industry benchmarks for telecommunications providers and IT service contractors offers insight into Leidos's competitive standing. For example, if Leidos consistently meets or exceeds performance expectations on comparable contracts, it suggests a lower risk profile for this new award. Conversely, a history of performance issues, such as delays or cost overruns, would raise concerns about their ability to execute this contract successfully and could indicate a higher risk of impacting the Navy's operational readiness.
What are the specific risks associated with a firm-fixed-price contract for complex telecommunications infrastructure?
Firm-fixed-price (FFP) contracts are designed to provide cost certainty for the government, shifting the risk of cost overruns to the contractor. However, for complex telecommunications infrastructure projects, FFP contracts carry specific risks. One primary risk is that the contractor may cut corners on quality or scope to maintain profitability if their initial cost estimates were too low or unforeseen issues arise. This could lead to suboptimal performance, increased maintenance needs, or premature system failures. Another risk is that the contractor may be hesitant to incorporate necessary changes or upgrades during the contract period, even if beneficial to the government, due to the potential for scope creep and associated cost increases. This can stifle innovation and prevent the adoption of more efficient technologies. Furthermore, if the initial requirements were poorly defined, the contractor might deliver a system that does not fully meet the government's evolving needs, leading to dissatisfaction and potential future contract modifications or new procurements. Effective risk mitigation requires meticulous initial scope definition, robust oversight, and clear communication channels.
What is the estimated market size for wired telecommunications services within the federal government, and how does this contract fit?
The federal government represents a significant market for wired telecommunications services, encompassing a vast array of needs from basic voice and data transmission to complex network infrastructure for command and control, intelligence, and administrative functions. Annual federal spending on telecommunications services, including network infrastructure, maintenance, and support, runs into billions of dollars across all agencies. This $40.1 million contract with Leidos Inc. for the Department of the Navy fits within this larger market by addressing a specific need for wired infrastructure, likely supporting a particular base, region, or set of facilities in South Carolina. It represents a component of the broader IT and communications spending aimed at ensuring reliable connectivity for military operations and personnel. Understanding the overall market size helps contextualize the significance of individual contracts and identify trends in government procurement, such as the shift towards higher bandwidth, more secure, and software-defined networking solutions.
What are the potential long-term implications of this contract on the cybersecurity posture of the Department of the Navy?
The cybersecurity implications of this contract are significant, as reliable and secure wired telecommunications are foundational to the Navy's overall cybersecurity posture. The infrastructure being procured or maintained under this contract serves as the backbone for data transmission, potentially carrying sensitive operational, personnel, and classified information. Therefore, the security measures implemented by Leidos Inc. during installation, maintenance, and operation are critical. Risks include vulnerabilities in the network hardware or software, potential for unauthorized access, and the integrity of data flow. Conversely, a well-executed contract that emphasizes robust security protocols, regular patching, intrusion detection, and adherence to stringent government cybersecurity standards (like NIST frameworks) can enhance the Navy's defenses. The long-term implications depend heavily on the contractor's commitment to cybersecurity best practices, the Navy's oversight in enforcing these standards, and the continuous monitoring and updating of the network to counter evolving cyber threats.
Industry Classification
NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers
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
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc. (UEI: 611641312)
Address: 11951 FREEDOM DR, RESTON, VA, 20190
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $40,130,778
Exercised Options: $40,130,778
Current Obligation: $40,130,778
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W91QUZ06D0016
IDV Type: IDC
Timeline
Start Date: 2011-08-01
Current End Date: 2012-11-12
Potential End Date: 2012-11-12 00:00:00
Last Modified: 2017-05-16
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