Leidos awarded $41.9M for signal development, highlighting a significant investment in advanced navigation systems
Contract Overview
Contract Amount: $41,937,481 ($41.9M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2018-09-25
End Date: 2023-10-16
Contract Duration: 1,847 days
Daily Burn Rate: $22.7K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: AWARD OF ARL-E W56KGY18F0018 (TASK ORDER 0006) FOR NEW SIGNAL DEVELOPMENT.
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $41.9 million to LEIDOS, INC. for work described as: AWARD OF ARL-E W56KGY18F0018 (TASK ORDER 0006) FOR NEW SIGNAL DEVELOPMENT. Key points: 1. The contract's value suggests a substantial need for sophisticated signal development capabilities within the Department of the Army. 2. Full and open competition indicates a broad market engagement, potentially leading to competitive pricing. 3. The Cost Plus Fixed Fee (CPFF) contract type introduces some cost risk, requiring diligent oversight to manage expenditures. 4. This award falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector, a critical area for defense modernization. 5. The contract duration of nearly five years points to a long-term strategic objective for signal development. 6. The absence of small business set-asides suggests the primary contractor, Leidos, is expected to handle the full scope of work.
Value Assessment
Rating: good
The award of $41.9 million for signal development appears to be a significant investment. Benchmarking against similar contracts for advanced navigation and guidance systems would be necessary for a precise value-for-money assessment. However, the scale of the award suggests a complex and critical requirement. The CPFF contract type, while allowing flexibility, necessitates careful monitoring of costs to ensure they remain within reasonable bounds compared to industry standards for similar R&D efforts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple capable vendors were likely solicited. The specific number of bidders is not provided, but this approach generally fosters a competitive environment, which can lead to better pricing and innovation. The Department of the Army sought proposals from the broadest possible range of qualified sources, maximizing the potential for cost savings and superior technical solutions.
Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of securing the best value by encouraging a wide array of companies to bid, driving down prices through market forces.
Public Impact
The primary beneficiary is the Department of the Army, which will receive advanced signal development capabilities crucial for its operational effectiveness. The services delivered will likely enhance the performance and reliability of navigation, guidance, and detection systems. The geographic impact is primarily within the United States, where the contractor will perform the work, potentially supporting domestic technology development. Workforce implications may include specialized engineering and technical roles within Leidos and its potential subcontractors, contributing to high-skill employment.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- The Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not managed meticulously, as the contractor is reimbursed for allowable costs plus a fixed fee.
- Lack of specific performance metrics in the provided data makes it difficult to assess the contractor's performance trajectory and potential risks.
- The duration of the contract (nearly 5 years) increases the exposure to potential changes in technology or strategic priorities that could impact the project's relevance.
Positive Signals
- Awarded under full and open competition, suggesting a robust selection process that likely identified a capable and competitively priced vendor.
- Leidos, Inc. is a large and established government contractor with a significant track record, implying a lower risk of contractor failure or performance issues.
- The contract addresses a critical defense need for advanced signal development, indicating strategic alignment and potential for high impact.
Sector Analysis
This contract falls under the North American Industry Classification System (NAICS) code 334511, which covers Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing. This sector is vital for national security and technological advancement, encompassing a wide range of sophisticated electronic systems. The market is characterized by high barriers to entry due to specialized knowledge, R&D investment, and stringent quality requirements. Spending in this sector often reflects government priorities in defense modernization and technological superiority.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large prime contract awarded to Leidos, Inc., a major defense contractor, the primary focus is likely on leveraging the prime's capabilities. However, there is potential for significant subcontracting opportunities for small businesses if Leidos chooses to engage them for specialized components or services within the scope of signal development. The absence of a specific small business subcontracting plan in the provided data warrants further investigation into Leidos's actual subcontracting practices for this award.
Oversight & Accountability
Oversight for this contract would primarily be managed by the Department of the Army contracting and program management offices. Given the CPFF contract type, rigorous financial oversight is crucial to monitor allowable costs and ensure the fixed fee remains appropriate. Transparency is typically maintained through contract reporting mechanisms and potential reviews by the Government Accountability Office (GAO) or the Department of Defense's Inspector General, particularly if performance or cost issues arise. The contract's duration necessitates ongoing monitoring to ensure continued alignment with evolving requirements.
Related Government Programs
- Department of Defense Research and Development
- Army Signal Intelligence Programs
- Navigation and Guidance System Procurement
- Advanced Electronic Warfare Systems
- Defense Communication Technology Development
Risk Flags
- Cost Overrun Risk (CPFF Contract Type)
- Technological Obsolescence Risk (Long Duration)
- Scope Creep Potential
- Performance Monitoring Challenges (Lack of Specific Metrics)
- Dependency on Contractor Expertise
Tags
defense, department-of-the-army, leidos-inc, signal-development, cost-plus-fixed-fee, full-and-open-competition, navigational-systems, search-detection-navigation-guidance-aeronautical-and-nautical-system-and-instrument-manufacturing, delivery-order, virginia, research-and-development, long-term-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $41.9 million to LEIDOS, INC.. AWARD OF ARL-E W56KGY18F0018 (TASK ORDER 0006) FOR NEW SIGNAL DEVELOPMENT.
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 $41.9 million.
What is the period of performance?
Start: 2018-09-25. End: 2023-10-16.
What is Leidos, Inc.'s track record with similar signal development contracts for the Department of Defense?
Leidos, Inc. has a substantial history of performing complex technology development and integration contracts for the Department of Defense and other federal agencies. While specific details on 'signal development' contracts require deeper database searches, Leidos is known for its work in areas such as command, control, communications, computers, intelligence, surveillance, and reconnaissance (C4ISR), electronic warfare, and advanced sensor systems. Their experience often involves large-scale, multi-year programs requiring significant engineering, software development, and systems integration expertise. Analyzing their past performance on similar-sized and technically complex contracts, particularly those involving R&D and advanced technology, would provide a clearer picture of their capabilities and reliability in this domain. Past performance reviews and contract award histories would be key sources for this assessment.
How does the $41.9 million award compare to typical spending on signal development within the Department of the Army?
The $41.9 million award for signal development represents a significant, but not unprecedented, investment for the Department of the Army. Spending in this area can fluctuate based on technological advancements, evolving threats, and strategic priorities. Contracts for advanced signal development, particularly those involving research, prototyping, and integration of new technologies, often fall within this range or higher, especially when spread over multiple years. To provide a precise comparison, one would need to analyze historical spending data for similar NAICS codes (e.g., 334511) and contract types (e.g., CPFF, Cost Plus Incentive Fee) awarded by the Army over the past 5-10 years. This would help determine if this award is indicative of a surge in investment, a standard procurement, or a particularly large-scale initiative.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for signal development?
The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract for signal development is the potential for cost overruns. In a CPFF structure, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. If the project's scope expands, unforeseen technical challenges arise, or inefficient practices are employed, the total cost to the government can exceed initial estimates, even though the fee remains fixed. This necessitates robust government oversight to scrutinize costs, ensure efficiency, and manage scope creep effectively. For signal development, which often involves cutting-edge technology and inherent technical uncertainties, the risk of cost escalation is particularly relevant. The government bears the brunt of cost uncertainty, while the contractor has less incentive to control costs beyond what is necessary to achieve the fixed fee.
What does the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector (NAICS 334511) entail in terms of government spending?
The 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector (NAICS 334511) encompasses the design, development, and manufacturing of a wide array of sophisticated systems critical for military operations, aviation, and maritime activities. This includes radar systems, sonar, GPS receivers, inertial navigation systems, flight control instruments, and related components. Government spending in this sector, particularly by the Department of Defense, is substantial and driven by the need for advanced situational awareness, precision targeting, and secure communication capabilities. Contracts often involve high levels of research and development, complex integration, and stringent performance requirements, leading to significant contract values and long program durations. This sector is a key area for technological innovation and defense modernization.
What are the implications of this contract being awarded as a Delivery Order under a larger contract vehicle?
The data indicates this award is a 'Delivery Order' (aw: DELIVERY ORDER), which means it was likely issued under a pre-existing Indefinite Delivery/Indefinite Quantity (IDIQ) contract or a similar contract vehicle. This approach allows the government to procure specific goods or services as needed, up to a certain ceiling amount, without needing to re-compete the entire requirement each time. For taxpayers, this can offer efficiencies by streamlining the procurement process and potentially leveraging pre-negotiated terms and pricing. However, it also means that the initial competition occurred when the parent contract vehicle was awarded. The specific benefits and risks depend on how the parent contract was competed and how this particular delivery order was structured and priced within that framework. It suggests a need to examine the parent contract for a fuller understanding of the overall competition and value.
How does the contract duration of 1847 days (approx. 5 years) impact the assessment of value and risk?
A contract duration of approximately five years (1847 days) for signal development signifies a long-term commitment to a particular technological path or capability. From a value perspective, this extended period allows for in-depth research, development, testing, and refinement, potentially leading to a more mature and effective final product. It also provides stability for the contractor, enabling focused resource allocation. However, a longer duration inherently increases risk. Technological landscapes can shift rapidly, rendering the developed signals or systems obsolete before the contract concludes. Strategic priorities may change, leading to scope adjustments or even cancellation. Furthermore, extended contracts increase exposure to economic fluctuations and potential contractor performance issues over time. Robust contract management and flexibility clauses are crucial to mitigate these risks and ensure the investment remains valuable throughout its lifecycle.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 11951 FREEDOM DR, 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: $43,508,276
Exercised Options: $43,508,276
Current Obligation: $41,937,481
Subaward Activity
Number of Subawards: 12
Total Subaward Amount: $57,861,904
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W56KGY16D0001
IDV Type: IDC
Timeline
Start Date: 2018-09-25
Current End Date: 2023-10-16
Potential End Date: 2023-10-16 12:10:00
Last Modified: 2024-07-25
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