Leidos awarded $94.9M contract for HR3D Buckeye aircraft integration and testing in INDO-PACOM
Contract Overview
Contract Amount: $94,890,143 ($94.9M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2023-09-29
End Date: 2026-02-28
Contract Duration: 883 days
Daily Burn Rate: $107.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: PROVIDES AIRCRAFT INTEGRATION, TEST AND EVALUATION, AND SUPPORT FOR THE OVERALL HR3D BUCKEYE PROGRAM. FOR THE INDO-PACOM AREA OF RESPONSIBILITY, THE CONTRACTOR PROVIDES 1 BE II ENHANCED ADDITIONAL JET TO INTEGRATE AND TEST SENSOR SYSTEMS.
Place of Performance
Location: MANASSAS, MANASSAS CITY County, VIRGINIA, 20110
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $94.9 million to LEIDOS, INC. for work described as: PROVIDES AIRCRAFT INTEGRATION, TEST AND EVALUATION, AND SUPPORT FOR THE OVERALL HR3D BUCKEYE PROGRAM. FOR THE INDO-PACOM AREA OF RESPONSIBILITY, THE CONTRACTOR PROVIDES 1 BE II ENHANCED ADDITIONAL JET TO INTEGRATE AND TEST SENSOR SYSTEMS. Key points: 1. Contract focuses on critical aircraft integration, test, and evaluation services. 2. Services are essential for the HR3D Buckeye program's operational readiness. 3. The contract includes providing a specific jet for sensor system integration. 4. Geographic focus on the INDO-PACOM Area of Responsibility highlights strategic importance. 5. Contract type is Cost Plus Fixed Fee, indicating potential for cost overruns. 6. Duration of 883 days suggests a significant, long-term support requirement.
Value Assessment
Rating: fair
The contract value of $94.9 million for a duration of 883 days appears substantial for specialized aircraft integration and testing services. Benchmarking against similar R&D contracts for advanced sensor integration and testing is challenging without more specific data on the complexity and scope of the HR3D Buckeye program. The Cost Plus Fixed Fee (CPFF) pricing structure, while common for R&D, carries inherent risks of cost escalation if not managed diligently. Further analysis would require comparing the labor rates and overhead applied by Leidos to industry averages for similar technical expertise.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting that multiple qualified bidders had the opportunity to submit proposals. This competitive process is generally expected to yield better pricing and value for the government. The number of bidders is not specified, but the full and open nature implies a robust selection process. The competition level is a positive indicator for price discovery and ensuring the government receives competitive offers for these specialized services.
Taxpayer Impact: Full and open competition is beneficial for taxpayers as it drives down costs through market forces, ensuring that the government is not overpaying for critical aircraft integration and testing services.
Public Impact
The Department of the Army benefits from enhanced capabilities for the HR3D Buckeye program. Services directly support the integration and testing of advanced sensor systems on aircraft. The INDO-PACOM Area of Responsibility will see improved operational readiness and support. This contract supports a specialized segment of the aerospace and defense technology workforce.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not closely monitored.
- The specific nature of 'aircraft integration, test and evaluation' requires highly specialized expertise, potentially limiting the pool of qualified contractors.
- The geographic focus on INDO-PACOM may present logistical challenges and increased operational costs.
Positive Signals
- Awarded under full and open competition, indicating a competitive bidding process.
- Leidos, Inc. is a large, established defense contractor with significant experience in complex systems integration.
- The contract supports a critical defense program (HR3D Buckeye), aligning with national security objectives.
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The aerospace and defense industry is characterized by high technological complexity and significant government investment. Spending in this area is driven by the need for advanced capabilities, such as sophisticated sensor integration and testing for military aircraft. Comparable spending benchmarks would typically involve other large-scale R&D contracts for defense platforms, where costs are influenced by innovation, specialized labor, and rigorous testing requirements.
Small Business Impact
The contract data indicates that small business participation was not a specific set-aside requirement (ss: false, sb: false). As a large contract awarded to a major prime contractor, Leidos, Inc., the primary impact on small businesses would likely be through subcontracting opportunities. The extent to which Leidos engages small businesses for specialized support services in integration, testing, or component manufacturing will determine the overall impact on the small business ecosystem. Without specific subcontracting plans, it's difficult to assess the direct benefit to small businesses.
Oversight & Accountability
Oversight for this contract will primarily reside with the Department of the Army contracting officers and program managers. The Cost Plus Fixed Fee (CPFF) structure necessitates robust financial oversight to monitor expenditures against the fixed fee and ensure cost reasonableness. Transparency is typically managed through regular reporting requirements from the contractor. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse, with the Defense Contract Audit Agency (DCAA) likely involved in auditing costs.
Related Government Programs
- Aircraft Modernization and Sustainment Programs
- Advanced Sensor Technology Development
- Defense Research and Development Contracts
- Intelligence, Surveillance, and Reconnaissance (ISR) Platforms
- Aerospace Systems Integration
- Test and Evaluation Services
Risk Flags
- Cost Overrun Risk (CPFF)
- Limited Competition Potential (Specialized Services)
- Long-Term Project Management Complexity
Tags
research-and-development, department-of-defense, department-of-the-army, full-and-open-competition, cost-plus-fixed-fee, aircraft-integration, test-and-evaluation, sensor-systems, indopacom, leidos-inc, large-contract, aerospace
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $94.9 million to LEIDOS, INC.. PROVIDES AIRCRAFT INTEGRATION, TEST AND EVALUATION, AND SUPPORT FOR THE OVERALL HR3D BUCKEYE PROGRAM. FOR THE INDO-PACOM AREA OF RESPONSIBILITY, THE CONTRACTOR PROVIDES 1 BE II ENHANCED ADDITIONAL JET TO INTEGRATE AND TEST SENSOR SYSTEMS.
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 $94.9 million.
What is the period of performance?
Start: 2023-09-29. End: 2026-02-28.
What is Leidos, Inc.'s track record with similar aircraft integration and testing contracts for the Department of Defense?
Leidos, Inc. has a substantial track record in providing complex systems integration, test, and evaluation services for various Department of Defense programs. They are known for their work on advanced platforms, including intelligence, surveillance, and reconnaissance (ISR) systems, electronic warfare, and command and control systems. Their experience often involves integrating new technologies into existing or new airframes, requiring expertise in avionics, software, and hardware. While specific details on past HR3D Buckeye-related work are not provided, Leidos's general portfolio suggests they possess the requisite capabilities for this type of contract. Past performance reviews and contract awards databases would offer more granular insights into their success rates, cost performance, and adherence to schedules on comparable projects.
How does the $94.9 million value compare to similar R&D contracts for aircraft sensor integration?
The $94.9 million contract value for aircraft integration, test, and evaluation, spanning approximately 2.3 years, appears to be within a reasonable range for specialized defense R&D projects. However, a precise comparison is difficult without knowing the specific scope, complexity, and technological novelty of the HR3D Buckeye program's sensor integration. Contracts for integrating cutting-edge sensor suites, especially those requiring significant modifications to airframes and extensive testing in diverse operational environments like INDO-PACOM, can command high values. Factors such as the number of aircraft involved, the maturity of the technology, and the required testing rigor significantly influence cost. Generally, R&D contracts of this magnitude for advanced aerospace systems reflect substantial investment in innovation and capability development.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for this type of service?
The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract for aircraft integration and testing is the potential for cost overruns. While the contractor (Leidos) is reimbursed for allowable costs, the fixed fee provides a ceiling on their profit. If the project's costs exceed estimates significantly, the government bears the burden of these increased expenses, potentially leading to a higher total contract value than initially anticipated. For the contractor, the risk lies in managing costs effectively to ensure their fixed fee remains profitable. Effective oversight, detailed cost tracking, and robust change management processes are crucial to mitigate these risks and ensure the government receives good value. The CPFF structure is often used when the scope of work is not precisely defined at the outset, as is common in R&D.
How effective is full and open competition in ensuring value for money in specialized R&D contracts like this?
Full and open competition is generally considered the most effective method for ensuring value for money in government contracting, including specialized R&D. By allowing all responsible sources to submit bids, it fosters a competitive environment that incentivizes contractors to offer their best pricing and technical solutions. This process helps establish a market-based price for the services required. In the context of this HR3D Buckeye contract, competition likely drove Leidos to propose a competitive offer. However, the effectiveness is contingent on the government clearly defining requirements and evaluating proposals rigorously. For highly specialized R&D, the number of truly capable bidders might be limited, potentially reducing the intensity of competition compared to more commoditized services.
What are the historical spending patterns for aircraft integration and testing services within the Department of the Army?
Historical spending patterns for aircraft integration and testing services within the Department of the Army are substantial and reflect the continuous need to modernize and maintain complex aviation assets. The Army invests heavily in upgrading existing platforms and integrating new technologies, such as advanced sensors, communication systems, and weapon systems, into its helicopter and fixed-wing fleets. Spending in this category often fluctuates based on major program milestones, new platform development, and evolving threat environments. Contracts can range from small, targeted modifications to large-scale integration efforts for entire aircraft families. Analyzing historical data reveals a consistent demand for these services, driven by technological advancements and operational requirements, with significant portions allocated to R&D and sustainment efforts.
What are the implications of the contract duration (883 days) on program continuity and contractor performance?
The contract duration of 883 days (approximately 2.3 years) suggests a significant, long-term commitment to the HR3D Buckeye program's integration, test, and evaluation phases. This extended period allows for thorough development, testing, and refinement of sensor systems and aircraft integration, which is crucial for complex aerospace projects. For the contractor, it provides a stable revenue stream and the opportunity to build deep expertise within the program. From a program continuity perspective, this duration helps ensure that the project progresses through its lifecycle without frequent disruptions from contract re-competition. However, it also means that potential performance issues or cost inefficiencies could persist for an extended period if not actively managed through robust oversight mechanisms.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
Product/Service Code: RESEARCH AND DEVELOPMENT › General Science and Technology R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: W5J9CQ16R0008
Offers Received: 1
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: $99,830,489
Exercised Options: $99,830,489
Current Obligation: $94,890,143
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W5J9CQ18D0001
IDV Type: IDC
Timeline
Start Date: 2023-09-29
Current End Date: 2026-02-28
Potential End Date: 2026-02-28 00:00:00
Last Modified: 2025-12-18
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