DoD's $798M R&D Contract with Leidos Inc. Awarded Without Competition
Contract Overview
Contract Amount: $79,784,247 ($79.8M)
Contractor: Leidos Inc
Awarding Agency: Department of Defense
Start Date: 2005-04-08
End Date: 2014-12-31
Contract Duration: 3,554 days
Daily Burn Rate: $22.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Place of Performance
Location: WEST MCLEAN, FAIRFAX County, VIRGINIA, 22103
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $79.8 million to LEIDOS INC for work described as: Key points: 1. Significant investment in Research and Development, focusing on physical, engineering, and life sciences. 2. Sole-source award to Leidos Inc. raises questions about competitive pricing and market alternatives. 3. Long contract duration (2005-2014) suggests a sustained need or evolving project scope. 4. The 'VA' contract type indicates a Cost Plus Fixed Fee structure, common in R&D but can lead to cost overruns if not managed tightly.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee structure for a nearly $800 million contract over nine years warrants scrutiny. Without competitive bidding, it's difficult to assess if the fixed fee accurately reflects the value delivered or if it allowed for excessive profit margins.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was awarded on a sole-source basis, meaning no other vendors were considered. This significantly limits price discovery and potentially leads to higher costs for taxpayers as competition is absent.
Taxpayer Impact: The lack of competition for such a large contract suggests taxpayers may have paid a premium compared to what could have been achieved through a competitive process.
Public Impact
Taxpayers funded nearly $800 million for R&D services over a decade. The specific nature of the R&D (physical, engineering, life sciences) could have broad implications for national security or technological advancement. The long-term commitment to a single contractor may stifle innovation from other potential providers in the sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- High contract value
- Long duration
- Cost-plus contract type
Positive Signals
- Sustained R&D investment
- Potential for significant technological advancement
Sector Analysis
This contract falls under the Research and Development in the Physical, Engineering, and Life Sciences sector (NAICS 541710). Spending in this area is critical for technological advancement but also prone to cost overruns and requires robust oversight due to inherent uncertainties.
Small Business Impact
The data indicates this was a large contract awarded to Leidos Inc., a major defense contractor. There is no indication that small businesses were involved as prime contractors or significant subcontractors in this specific award.
Oversight & Accountability
The sole-source nature of this large, long-duration contract necessitates strong oversight to ensure the government is receiving fair value and that the contractor is meeting all performance requirements. Without competition, accountability relies heavily on contract management and performance monitoring.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Potential for overpricing due to sole-source award.
- Lack of transparency in cost determination.
- Risk of contractor complacency without competitive pressure.
- Difficulty in assessing true value for money retrospectively.
- Potential for scope creep over the long contract duration.
Tags
research-and-development-in-the-physical, department-of-defense, va, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $79.8 million to LEIDOS INC. See the official description on USAspending.
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 $79.8 million.
What is the period of performance?
Start: 2005-04-08. End: 2014-12-31.
What specific R&D projects were undertaken, and what were the key deliverables or outcomes that justified the nearly $800 million investment over nine years?
The contract focused on Research and Development in Physical, Engineering, and Life Sciences. Without specific project details, it's challenging to assess the precise outcomes. However, given the substantial funding and long duration, the expectation would be significant advancements or critical research findings that directly supported the Department of the Army's mission objectives, potentially in areas like advanced materials, sensor technology, or biological countermeasures.
How was the 'fixed fee' component determined in this Cost Plus Fixed Fee contract to ensure it represented fair value without competitive benchmarking?
In Cost Plus Fixed Fee contracts, the fixed fee is typically negotiated based on the contractor's estimated costs and a reasonable profit margin, often informed by historical data from similar contracts or industry benchmarks. However, without competition, the government's leverage in negotiating this fee is reduced. The fee's reasonableness would depend on the thoroughness of the government's cost analysis and negotiation strategy.
What mechanisms were in place to ensure effective performance and accountability for a sole-source contract of this magnitude and duration?
Effective performance and accountability for sole-source contracts rely heavily on robust contract administration, including detailed performance work statements, regular progress reviews, independent government cost estimates, and clear metrics for success. For this contract, the Department of the Army would have needed dedicated contracting officers and technical representatives to monitor progress, manage risks, and ensure deliverables met requirements, mitigating the risks associated with the lack of competitive pressure.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences
Product/Service Code: RESEARCH AND DEVELOPMENT › OTHER RESEARCH/DEVELOPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W56HZV04R0763
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc. (UEI: 611641312)
Address: 1710 SAIC DR, MC LEAN, VA, 22102
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2005-04-08
Current End Date: 2014-12-31
Potential End Date: 2014-12-31 00:00:00
Last Modified: 2017-09-06
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