Leidos Inc. awarded $29.8M for wired telecommunications services, with a significant portion allocated to a Virginia-based effort
Contract Overview
Contract Amount: $29,781,232 ($29.8M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2008-03-01
End Date: 2011-12-31
Contract Duration: 1,400 days
Daily Burn Rate: $21.3K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: BASIC - PHASE-IN EFFORT
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190, UNITED STATES OF AMERICA
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $29.8 million to LEIDOS, INC. for work described as: BASIC - PHASE-IN EFFORT Key points: 1. Contract awarded to a single, large business prime contractor. 2. Significant portion of contract value tied to a specific geographic location. 3. Contract type is Cost Plus Fixed Fee, which can incentivize cost overruns. 4. The contract was awarded under full and open competition after exclusion of sources, suggesting a complex procurement process. 5. The contract duration of 1400 days indicates a long-term service requirement. 6. The base award amount is $21.3M, with the total potential value reaching $29.8M.
Value Assessment
Rating: fair
The contract's value of $29.8 million over approximately 3.7 years suggests a moderate investment in telecommunications infrastructure. Benchmarking against similar contracts for wired telecommunications carriers is challenging without more specific service details. However, the Cost Plus Fixed Fee (CPFF) contract type, while allowing for flexibility, carries inherent risks of cost escalation compared to fixed-price contracts. The awarded amount appears to be within a reasonable range for the described service, but a detailed cost-benefit analysis would be needed for a definitive value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This specific procurement method implies that while the competition was intended to be broad, certain sources were initially excluded, possibly due to specific technical requirements or prior relationships. The number of bidders is not specified, but the method suggests a deliberate effort to ensure fair competition while potentially streamlining the process for specialized needs. The level of competition, even with initial exclusions, likely contributed to price discovery, though the CPFF structure may temper direct price competition.
Taxpayer Impact: The use of full and open competition, even with exclusions, aims to ensure that taxpayer funds are used efficiently by seeking the best value. The specific exclusion of sources, however, warrants scrutiny to ensure it did not unduly limit competition and potentially increase costs for taxpayers.
Public Impact
The primary beneficiaries are likely Department of Defense operations requiring robust wired telecommunications infrastructure. Services delivered include the provision and maintenance of wired telecommunications networks. The contract has a significant geographic impact, with a substantial portion of the effort focused in Virginia. Workforce implications may include specialized telecommunications technicians and project managers employed by the prime contractor and potentially subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type can lead to higher costs if not managed tightly.
- The 'exclusion of sources' clause in the competition type requires further investigation to ensure it did not limit fair competition.
- Lack of detailed performance metrics makes it difficult to assess the efficiency and effectiveness of the spending.
- The contract's duration of over three years necessitates ongoing monitoring for potential scope creep or cost overruns.
Positive Signals
- Awarded under a full and open competition framework, indicating an attempt to achieve competitive pricing.
- The contract is managed by the Defense Contract Management Agency, suggesting established oversight processes.
- The base award amount is clearly defined, providing a baseline for financial tracking.
Sector Analysis
The contract falls within the Information Technology and Telecommunications sector, specifically focusing on wired telecommunications carriers. This sector is critical for modern military operations, providing the backbone for communication, data transfer, and command and control systems. Spending in this area is substantial across the federal government, with significant investments made by the Department of Defense to maintain and upgrade its vast network infrastructure. Comparable spending benchmarks would typically involve analyzing other large-scale telecommunications service contracts awarded by federal agencies for similar network build-outs or maintenance.
Small Business Impact
This contract does not appear to have a specific small business set-aside. The prime contractor, Leidos, Inc., is a large business. There is no explicit information regarding subcontracting plans for small businesses within the provided data. The impact on the small business ecosystem is therefore likely indirect, potentially through opportunities if Leidos engages them for specialized services, but not through a direct set-aside mandate.
Oversight & Accountability
Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures would be embedded in the contract's terms and conditions, including reporting requirements and performance standards. Transparency is facilitated through contract databases like FPDS, which provide public access to award details. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.
Related Government Programs
- Defense Information Systems Agency (DISA) Telecommunications Services
- General Services Administration (GSA) Federal Telecommunications Contracts
- Department of Defense Network Modernization Programs
- Wired Network Infrastructure Services
Risk Flags
- CPFF contract type carries inherent cost overrun risk.
- Exclusion of sources in competition requires justification to ensure fairness.
- Long contract duration may lead to technological obsolescence or uncompetitive pricing.
- Lack of detailed performance metrics hinders objective assessment of value.
Tags
it, defense, wired-telecommunications-carriers, cost-plus-fixed-fee, full-and-open-competition, leidos-inc, department-of-defense, virginia, large-business, telecommunications-services, contract-award
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $29.8 million to LEIDOS, INC.. BASIC - PHASE-IN EFFORT
Who is the contractor on this award?
The obligated recipient is LEIDOS, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $29.8 million.
What is the period of performance?
Start: 2008-03-01. End: 2011-12-31.
What is the specific nature of the 'Wired Telecommunications Carriers' services being procured under this contract?
The provided data indicates the North American Industry Classification System (NAICS) code is 517110, which corresponds to Wired Telecommunications Carriers. This typically encompasses services such as providing access to the public switched telephone network, operating and maintaining telecommunications equipment and infrastructure (like fiber optic networks, copper lines, and related facilities), and offering voice and data transmission services over these networks. For the Department of Defense, this could involve establishing, maintaining, and upgrading secure communication lines, local area networks (LANs), wide area networks (WANs), and other critical data infrastructure necessary for military operations, intelligence gathering, and administrative functions. The specific details of the services would be elaborated in the contract's Statement of Work (SOW).
How does the Cost Plus Fixed Fee (CPFF) contract type compare to other contract types in terms of risk and potential cost for the government?
Cost Plus Fixed Fee (CPFF) contracts are used when the scope of work is not precisely defined, or when there is significant uncertainty in the cost of performance. In a CPFF contract, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure shifts much of the cost risk to the government, as the final cost can exceed initial estimates if costs escalate. Compared to Fixed Price contracts, where the contractor bears most of the cost risk, CPFF can lead to higher final costs for the government. However, it offers flexibility and can be advantageous for research and development or complex service contracts where precise cost estimation is difficult. Effective oversight and cost controls are crucial to mitigate the risks associated with CPFF contracts.
What does 'Full and Open Competition After Exclusion of Sources' imply for the procurement process and potential bidder pool?
The phrase 'Full and Open Competition After Exclusion of Sources' suggests a procurement process that initially aimed for broad competition but then narrowed the field based on specific criteria or circumstances. 'Full and Open Competition' is the statutory standard requiring agencies to provide full and open competition when obtaining supplies or services. However, 'After Exclusion of Sources' indicates that certain potential offerors were not considered. This exclusion could be due to reasons such as specific technical requirements that only a limited number of firms could meet, national security concerns, or prior contractual relationships that led to a sole-source justification for a portion of the requirement. While the intent is still to achieve competitive pricing, the exclusion of sources can limit the number of bidders and potentially impact the breadth of innovation and price discovery compared to a truly unrestricted full and open competition.
What is the significance of the base award amount ($21.3M) versus the total potential award amount ($29.8M)?
The distinction between the base award amount and the total potential award amount is critical for understanding the contract's financial scope and flexibility. The base award of $21,327,200 represents the guaranteed amount obligated at the time of award, covering a defined scope of work or initial period of performance. The total potential award of $29,781,232.02 includes this base amount plus any options, indefinite-delivery/indefinite-quantity (IDIQ) task orders, or other contract line items that the government may choose to exercise or order during the contract's period of performance. This difference of approximately $8.5 million indicates that the contract includes provisions for potential growth, additional services, or extended performance, providing the agency with flexibility but also representing a ceiling on the total expenditure rather than a guaranteed cost.
What are the potential risks associated with a 1400-day contract duration for wired telecommunications services?
A contract duration of 1400 days (approximately 3.85 years) for wired telecommunications services presents several potential risks. Firstly, technology in the telecommunications sector evolves rapidly; a contract spanning several years might not accommodate the latest advancements, potentially leading to outdated infrastructure or services by its end. Secondly, long-term contracts, especially those using cost-reimbursement types like CPFF, increase the risk of cost escalation over time due to inflation, unforeseen technical challenges, or scope creep. Thirdly, market conditions and pricing for telecommunications services can fluctuate significantly over such a period, meaning the initial pricing might become uncompetitive. Finally, maintaining consistent service quality and contractor performance over an extended duration requires robust contract management and oversight to ensure objectives are met and risks are mitigated.
Industry Classification
NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc. (UEI: 611641312)
Address: 10260 CAMPUS POINT DRIVE, SAN DIEGO, CA, 92121
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $68,728,087
Exercised Options: $33,191,731
Current Obligation: $29,781,232
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2008-03-01
Current End Date: 2011-12-31
Potential End Date: 2011-12-31 00:00:00
Last Modified: 2015-09-29
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