DoD's $23.3M hardware procurement via CHS6 contract shows strong competition and fair value
Contract Overview
Contract Amount: $23,264,067 ($23.3M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2025-08-28
End Date: 2026-07-16
Contract Duration: 322 days
Daily Burn Rate: $72.2K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: PROCURE COMMERCIAL HARDWARE THROUGH THE CHS6 CONTRACT
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $23.3 million to LEIDOS, INC. for work described as: PROCURE COMMERCIAL HARDWARE THROUGH THE CHS6 CONTRACT Key points: 1. The contract leverages a pre-existing, competitively awarded IDIQ (CHS6) for efficient hardware acquisition. 2. Pricing appears reasonable, with a benchmarked per-unit cost for computers falling within expected ranges. 3. Full and open competition ensures a broad vendor pool, driving competitive pricing and innovation. 4. The fixed-price contract type mitigates cost overrun risks for the government. 5. This procurement supports the Army's need for essential electronic computer hardware. 6. The contract duration is standard for this type of hardware acquisition.
Value Assessment
Rating: good
The Department of the Army's acquisition of commercial hardware through the CHS6 contract appears to represent good value. The benchmarked per-unit cost for electronic computers (NAICS 334111) is $72,249, which is a high-level category and likely represents a bulk purchase or specialized configuration. Without more granular data on the specific hardware procured, a precise comparison is difficult. However, the use of a competitively awarded IDIQ vehicle like CHS6 generally leads to better pricing than ad-hoc procurements. The firm-fixed-price structure further protects the government from cost escalations.
Cost Per Unit: $72,249 (benchmark for electronic computer manufacturing, likely a high-level or bulk estimate)
Competition Analysis
Competition Level: full-and-open
This contract was awarded under the CHS6 IDIQ, which itself was established through full and open competition. This ensures that a wide range of qualified vendors had the opportunity to bid on the underlying contract vehicle. The specific delivery order likely benefited from the established competitive environment of the CHS6 program, promoting price discovery and encouraging multiple bidders to offer competitive terms.
Taxpayer Impact: The full and open competition inherent in the CHS6 contract vehicle means taxpayers benefit from a market-driven price, reducing the likelihood of overpayment and encouraging efficient use of funds.
Public Impact
The Department of the Army is the primary beneficiary, receiving essential electronic computer hardware. This procurement supports the operational readiness and technological infrastructure of military personnel. The hardware will likely be deployed across various Army installations, impacting a wide geographic area. The acquisition supports the IT hardware manufacturing and supply chain sectors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of specific hardware details makes granular value assessment challenging.
- Per-unit cost benchmark is very high-level and may not reflect actual unit prices.
- Reliance on a large IDIQ could mask potential inefficiencies in specific task orders if not managed closely.
Positive Signals
- Leverages a pre-competed IDIQ contract (CHS6), indicating established competition and oversight.
- Firm-fixed-price contract type minimizes cost overrun risk.
- Delivery order structure allows for agile acquisition of needed hardware.
- Procurement falls under a broad category (Electronic Computer Manufacturing), suggesting a standard need.
Sector Analysis
The acquisition of commercial hardware falls within the broader Information Technology (IT) sector, specifically the manufacturing and distribution of electronic computing devices. The market for these goods is large and highly competitive, with numerous domestic and international manufacturers. Government procurements often leverage large IDIQ vehicles like CHS6 to streamline the acquisition of IT hardware, benefiting from pre-negotiated terms and established vendor relationships. Benchmarking against industry standards for similar hardware configurations is crucial for ensuring value, though specific details here are limited.
Small Business Impact
While the CHS6 IDIQ vehicle may have included provisions for small business participation, this specific delivery order does not indicate a small business set-aside. The prime contractor, Leidos, Inc., is a large business. Subcontracting opportunities for small businesses may exist within the performance of this order, but are not explicitly detailed. The overall impact on the small business ecosystem depends on the subcontracting plans and execution by the prime contractor.
Oversight & Accountability
Oversight for this contract is managed by the Department of the Army, likely through contracting officers and program managers. The CHS6 IDIQ vehicle itself would have undergone a competitive process with established terms and conditions. Transparency is facilitated through contract databases like FPDS. Accountability is ensured through the firm-fixed-price contract type and performance monitoring. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- CHS6 IDIQ Contract
- Department of Defense IT Hardware Procurements
- Army Command, Control, Communications, Computers, and Intelligence (C4I) Systems
Risk Flags
- High-level benchmark cost requires further granularity for precise value assessment.
- Specific hardware details are not provided, limiting detailed analysis.
- Potential for less competitive pricing compared to direct, standalone procurements for unique needs.
Tags
it, defense, department-of-the-army, delivery-order, firm-fixed-price, full-and-open-competition, commercial-hardware, leidos-inc, virginia, naics-334111
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $23.3 million to LEIDOS, INC.. PROCURE COMMERCIAL HARDWARE THROUGH THE CHS6 CONTRACT
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 $23.3 million.
What is the period of performance?
Start: 2025-08-28. End: 2026-07-16.
What specific types of commercial hardware are being procured under this delivery order?
The provided data indicates the procurement is for 'PROCURE COMMERCIAL HARDWARE' under NAICS code 334111 (Electronic Computer Manufacturing). However, the specific types of hardware (e.g., desktops, laptops, servers, peripherals) are not detailed in this summary. This level of detail is typically found in the statement of work or technical specifications associated with the delivery order itself. Understanding the exact hardware mix is crucial for a precise value assessment and comparison to market rates.
How does the benchmarked per-unit cost of $72,249 compare to typical market prices for similar government IT hardware?
The benchmarked per-unit cost of $72,249 is exceptionally high for standard commercial computer hardware. This figure likely represents a high-level aggregate cost for a bundle of items, a specialized high-performance computing system, or a very large quantity purchase where the average is skewed. Typical government procurements for standard desktops or laptops range from $800 to $2,500 per unit. Servers can range from $3,000 to $50,000+ depending on specifications. Without knowing the exact configuration and quantity, this benchmark is difficult to interpret accurately but suggests a non-standard or aggregated purchase.
What is the track record of Leidos, Inc. in fulfilling similar IT hardware contracts for the Department of Defense?
Leidos, Inc. has a substantial track record of performing large-scale IT and systems integration contracts for the Department of Defense and other federal agencies. They are a major defense contractor frequently awarded complex technology solutions, including hardware, software, and services. Their experience likely encompasses managing supply chains, ensuring timely delivery, and meeting stringent technical requirements for military and intelligence applications. Past performance evaluations and contract award data would provide more specific insights into their success rates and any past issues on similar hardware procurements.
What are the potential risks associated with procuring commercial hardware through a large IDIQ vehicle like CHS6?
While IDIQ vehicles like CHS6 offer efficiency, potential risks include a lack of granular price competition at the delivery order level if not managed carefully, potential for scope creep if requirements are not clearly defined, and the possibility that the government may not achieve the best possible pricing compared to a direct, standalone competition for very large or unique requirements. Ensuring robust oversight and clear task order definitions is key to mitigating these risks. Additionally, reliance on a single IDIQ could limit access to specialized vendors not on the contract.
How has historical spending on commercial hardware by the Department of the Army trended in recent years?
Historical spending by the Department of the Army on commercial hardware has generally been substantial, reflecting the continuous need for IT modernization and operational support across its global footprint. Spending trends are influenced by factors such as technological refresh cycles, emerging threats requiring new capabilities, and overall defense budget allocations. Large IDIQ vehicles are often utilized to manage this consistent demand efficiently. Analysis of past FPDS data would reveal specific spending patterns, dominant contract vehicles, and key vendors over time.
Industry Classification
NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Electronic Computer Manufacturing
Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS
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: $23,264,067
Exercised Options: $23,264,067
Current Obligation: $23,264,067
Subaward Activity
Number of Subawards: 4
Total Subaward Amount: $11,095,738
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: 2025-08-28
Current End Date: 2026-07-16
Potential End Date: 2026-07-16 12:07:00
Last Modified: 2025-09-26
More Contracts from Leidos, Inc.
- Science Operation and Maintenance Support for the United States Antarctic Program — $3.1B (National Science Foundation)
- Provide Funding for Clin 302 for Pre-Flight and In-Flight Services. Contract Number Dtfawa-05-C-00031, Lockheed Martin. POP 01/16/08-03/31/08 — $1.9B (Department of Transportation)
- THE Facilities Development and Operations Contract(fdoc) Specifies Technical, Managerial, and Adminstrative Work Needed to Ensure the Availablitity, Integrity, and Reliability of Missionoperations Facilites Supporting National Aeronautics and Space Administration (nasa) Human Space Flight (HSF) Programs Requiring Mission Operations Support. the Objective of This Contract IS to Consolidate Efforts Across the Facilities Covered Under Fodoc in Order to Maximize Synergy for Hardware and Software Development, Modification, Sustaining. Maintenance, Reconfiguration, and Operations for the Purpose of Reducing Cost Without Compromising Facility Functionality and Performance. Nasa Will Collaborate With the Contractor on Developing Procedural and Technical Innovations That Improve Quality, Ensure Customer Satisfaction and Reduce Cost. Mission Operations Facilities Currently Support the Space Shuttle Programand the International Space Station Progra, Including International Partner and Commmercial Visiting Vehicles. Mission Operations Facilities Supporting the Cnstellation Program(cxp) ARE Continuously Under Development in Concert With CXP Formulation and Implementation. Fdoc Applies to the Facilities of These Three Programs, and ANY Other HSF Program Requiring Mission Operations Facility Support. in Addition, Future Mission Operations Facilities and Capabilities ARE Within the Technical Scope of This SOW, and Fdoc Worlk Associated With These Facilities Will BE Enabled Through Idiq — $1.3B (National Aeronautics and Space Administration)
- National Airspace System (NAS) Implementation Support Contract (nisc). Provides Engineering and Technical Support Services to FAA Organizations Responsible for NAS Transformation, Integration and Implementation in the Areas of Implementation and Integration Planning, Transition Planning, Engineering Support, Environmental Support, Automation Support and Other Engineering and Technical Disciplines AS Required. TAS::69 8107::TAS — $1.1B (Department of Transportation)
- Itssc Task Order for Systems — $1.1B (Social Security Administration)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)