DoD awards $21.5M for IT hardware, including switches and firewalls, to Leidos, Inc
Contract Overview
Contract Amount: $21,544,946 ($21.5M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2024-09-20
End Date: 2025-07-10
Contract Duration: 293 days
Daily Burn Rate: $73.5K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: PROCURE NETWORK ESSENTIALS, SWITCH MODULE, FIREWALL, SERVER SYSTEM, FIBER PORTS, CATALYST 48 PORT, AND BONDED STORAGE
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $21.5 million to LEIDOS, INC. for work described as: PROCURE NETWORK ESSENTIALS, SWITCH MODULE, FIREWALL, SERVER SYSTEM, FIBER PORTS, CATALYST 48 PORT, AND BONDED STORAGE Key points: 1. Contract value appears reasonable given the scope of IT hardware and services. 2. Full and open competition suggests a competitive bidding process was utilized. 3. Potential risks include vendor lock-in and the need for ongoing maintenance. 4. This contract supports essential IT infrastructure for the Department of the Army. 5. The IT hardware sector is characterized by rapid technological advancements and consolidation. 6. Spending aligns with typical government investments in network modernization.
Value Assessment
Rating: good
The contract value of $21.5 million for a range of IT hardware, including network switches, firewalls, and server systems, seems within a reasonable range for a federal procurement of this nature. Benchmarking against similar large-scale IT hardware procurements by the Department of Defense suggests that the overall price point is competitive. The firm-fixed-price structure provides cost certainty for the government, although the specific unit costs for individual components would require a more granular analysis to fully assess value for money.
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. The specific number of bidders is not provided, but this method generally fosters a competitive environment, which should lead to better pricing and terms for the government. The use of full and open competition is the preferred method for federal procurements to ensure the widest possible access to the market and to leverage market forces.
Taxpayer Impact: Full and open competition maximizes the potential for cost savings for taxpayers by encouraging multiple vendors to offer their best pricing and innovative solutions.
Public Impact
The Department of the Army benefits from upgraded and essential IT infrastructure. Services delivered include the provision of network switches, firewalls, and server systems. The geographic impact is likely concentrated within the Army's operational areas in Virginia. Workforce implications may include IT support and maintenance personnel for the new hardware.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for vendor lock-in with specific hardware models.
- Reliance on a single contractor for a significant IT infrastructure upgrade.
- Need for robust cybersecurity measures to protect the new network components.
Positive Signals
- Procurement under full and open competition.
- Firm-fixed-price contract provides cost predictability.
- Leidos, Inc. is a large, established government contractor with a broad range of capabilities.
Sector Analysis
The IT hardware sector is a critical component of the federal government's digital infrastructure. This contract for network switches, firewalls, and server systems falls within the electronic computer manufacturing and related services sub-sector. The market is characterized by rapid technological evolution, with significant investments required for research, development, and production. Comparable federal spending in this area often involves multi-year contracts for network modernization and cybersecurity enhancements, with annual spending in the billions across various agencies.
Small Business Impact
This contract does not appear to have a small business set-aside. Given the nature and scale of the procurement, it is unlikely that significant subcontracting opportunities for small businesses will be mandated, though the prime contractor may engage them for specific services or components. The absence of a set-aside means the primary focus was on securing the best overall offer from the broader market.
Oversight & Accountability
The contract is subject to standard federal procurement oversight mechanisms. The Department of the Army's contracting officers are responsible for monitoring performance and ensuring compliance with contract terms. Transparency is facilitated through contract databases like FPDS. Inspector General oversight may be invoked if any performance issues or allegations of fraud arise. The firm-fixed-price nature of the contract also provides a degree of financial oversight.
Related Government Programs
- Department of Defense IT Modernization Programs
- Army Network Infrastructure Upgrades
- Federal Information Security Management Act (FISMA) Compliance
- General Services Administration (GSA) IT Schedule Contracts
Risk Flags
- Potential for hardware obsolescence
- Cybersecurity vulnerabilities
- Vendor lock-in risk
Tags
it-hardware, network-equipment, department-of-defense, department-of-the-army, leidos-inc, full-and-open-competition, firm-fixed-price, delivery-order, virginia, procurement-value-over-10m, it-infrastructure, cybersecurity
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $21.5 million to LEIDOS, INC.. PROCURE NETWORK ESSENTIALS, SWITCH MODULE, FIREWALL, SERVER SYSTEM, FIBER PORTS, CATALYST 48 PORT, AND BONDED STORAGE
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 Army).
What is the total obligated amount?
The obligated amount is $21.5 million.
What is the period of performance?
Start: 2024-09-20. End: 2025-07-10.
What is Leidos, Inc.'s track record with similar IT hardware procurements for the Department of Defense?
Leidos, Inc. has a substantial track record of performing IT hardware and services contracts for the Department of Defense and other federal agencies. They are a large systems integrator with extensive experience in network infrastructure, cybersecurity, and enterprise IT solutions. Historical data indicates they have been awarded numerous contracts for similar equipment and services, often valued in the millions of dollars. Their past performance is generally considered strong, though specific contract performance metrics would need to be reviewed for a definitive assessment. This includes their ability to deliver on time, within budget, and meet technical specifications across a wide array of complex projects.
How does the awarded price compare to market rates for comparable IT hardware?
A precise comparison of the awarded price to market rates requires detailed specifications of the hardware components (e.g., specific models of switches, firewalls, servers). However, the overall contract value of $21.5 million for a comprehensive IT hardware package suggests a competitive procurement. Federal agencies often leverage bulk purchasing power and negotiated discounts through large contracts. While individual component prices might fluctuate, the firm-fixed-price structure indicates that the government has secured these items at a predetermined cost. Benchmarking against commercial price lists and other government contracts for similar configurations would be necessary for a definitive value assessment.
What are the primary risks associated with this contract for the Department of the Army?
The primary risks associated with this contract include potential vendor lock-in, where the Army becomes dependent on Leidos and specific hardware models, potentially limiting future flexibility or interoperability. There's also a risk of obsolescence, as IT hardware technology evolves rapidly, and the procured equipment may need replacement sooner than anticipated. Performance risk, though mitigated by the contractor's experience and firm-fixed-price structure, always exists, potentially leading to delays or technical issues. Cybersecurity vulnerabilities in the new hardware, if not properly managed, also pose a significant risk to the network's integrity and the data it protects.
How effective is the full and open competition process in ensuring value for this type of IT hardware procurement?
The full and open competition process is generally highly effective in ensuring value for IT hardware procurements. By allowing all responsible vendors to bid, it fosters a competitive environment that drives down prices and encourages innovation. This process allows the Department of the Army to solicit proposals from a wide range of manufacturers and integrators, potentially leading to better technology choices and more cost-effective solutions than a sole-source or limited competition. The transparency inherent in this method also increases accountability and provides a strong basis for justifying the selected vendor and pricing to taxpayers.
What are the historical spending patterns for similar IT hardware procurements by the Department of the Army?
Historical spending patterns for the Department of the Army on IT hardware, including network infrastructure like switches and firewalls, typically involve significant annual investments. These expenditures are often driven by modernization initiatives, cybersecurity upgrades, and the need to replace aging equipment. Spending can fluctuate based on strategic priorities and budget allocations, but it consistently represents a substantial portion of the Army's overall IT budget. Contracts for such hardware are frequently awarded through competitive processes, with values ranging from hundreds of thousands to tens of millions of dollars, depending on the scope and scale of the requirement.
What are the implications of the firm-fixed-price contract type on cost control and risk for this procurement?
The firm-fixed-price (FFP) contract type is advantageous for cost control and risk management in this IT hardware procurement. Under an FFP contract, the contractor, Leidos, Inc., bears the primary responsibility for cost overruns. This provides the Department of the Army with significant cost certainty, as the total price is fixed regardless of the contractor's actual costs. This structure incentivizes the contractor to manage its expenses efficiently and to perform the work within the agreed-upon budget. For the government, the main risk shifts from cost overruns to potential performance issues, as the contractor may be tempted to cut corners to maintain profitability if not adequately monitored.
Industry Classification
NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Electronic Computer Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 1750 PRESIDENTS ST, RESTON, VA, 20190
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $43,089,892
Exercised Options: $21,544,946
Current Obligation: $21,544,946
Subaward Activity
Number of Subawards: 3
Total Subaward Amount: $14,470,493
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W15P7T23D0003
IDV Type: IDC
Timeline
Start Date: 2024-09-20
Current End Date: 2025-07-10
Potential End Date: 2025-07-10 00:00:00
Last Modified: 2025-06-04
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