Leidos Inc. awarded $73.6M for Army software engineering and sustainment, a significant contract for engineering services
Contract Overview
Contract Amount: $73,619,399 ($73.6M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2012-09-20
End Date: 2016-04-09
Contract Duration: 1,297 days
Daily Burn Rate: $56.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: IGF::OT::IGF SOFTWARE ENGINEERING AND SUSTAINMENT
Place of Performance
Location: ABERDEEN PROVING GROUND, HARFORD County, MARYLAND, 21005
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $73.6 million to LEIDOS, INC. for work described as: IGF::OT::IGF SOFTWARE ENGINEERING AND SUSTAINMENT Key points: 1. Contract value represents a substantial investment in critical software sustainment. 2. Competition dynamics suggest a potentially competitive bidding process for this service. 3. Contract duration and type warrant scrutiny for potential cost overruns or scope creep. 4. Performance context is key to understanding the value delivered for the funds expended. 5. This contract positions Leidos as a key provider within the Army's IT infrastructure. 6. The 'Engineering Services' NAICS code indicates a focus on specialized technical expertise.
Value Assessment
Rating: fair
The contract value of $73.6 million over its period of performance appears substantial for software engineering and sustainment. Benchmarking against similar contracts for large-scale IT sustainment services would be necessary to definitively assess value for money. The Cost Plus Fixed Fee (CPFF) contract type can sometimes lead to higher costs if not managed tightly, as it incentivizes cost incurrence to achieve the fixed fee. Without specific performance metrics or comparisons to industry benchmarks for similar services, a precise value assessment is challenging.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'Full and Open Competition,' indicating that all responsible sources were permitted to submit bids. The presence of 2 bids suggests a degree of competition, though the exact number of bidders can vary significantly for contracts of this nature. A higher number of bidders typically leads to more competitive pricing and better value for the government. The limited number of bids here might suggest a specialized service or a market with fewer qualified providers.
Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best possible pricing through market forces. However, with only two bids, the potential for significant price savings may have been constrained compared to a more robustly competed contract.
Public Impact
The U.S. Army benefits directly through the sustainment and enhancement of its software systems. This contract ensures the continued operational readiness of critical Army software applications. The primary services delivered include software engineering, development, and ongoing maintenance. The geographic impact is likely concentrated around Army installations and operational theaters where these software systems are deployed. Workforce implications include employment for software engineers, developers, and IT support personnel, primarily with Leidos and potentially its subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee (CPFF) contract type can lead to cost escalations if not rigorously managed.
- Limited number of bids (2) may indicate reduced competitive pressure on pricing.
- Contract duration of nearly 4 years requires careful monitoring for scope creep and evolving requirements.
- The specific nature of 'software engineering and sustainment' can be complex to define and manage, increasing risk.
Positive Signals
- Awarded under 'Full and Open Competition,' maximizing potential bidder pool.
- Leidos, Inc. is a large, established government contractor with significant experience in IT and defense.
- The contract addresses a critical need for software sustainment, ensuring operational continuity.
- The fixed fee component of the CPFF contract provides some level of cost predictability.
Sector Analysis
The IT services sector, particularly within defense, is characterized by large, complex contracts for software development, sustainment, and modernization. Companies like Leidos are major players, often competing for significant portions of the defense IT budget. Spending in this area is driven by the need to maintain legacy systems while integrating new technologies and ensuring cybersecurity. Comparable spending benchmarks would involve looking at other large-scale software sustainment contracts awarded by the Department of Defense or other federal agencies.
Small Business Impact
There is no indication from the provided data that this contract included specific small business set-asides. Given the scale and nature of the services, it is likely that Leidos, as the prime contractor, may engage small businesses as subcontractors. However, without specific subcontracting plans or goals, the direct impact on the small business ecosystem is unclear. Analysis of subcontracting reports would be necessary to determine the extent of small business participation.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. The Inspector General (IG) for the Department of Defense would have jurisdiction to investigate potential fraud, waste, or abuse. Transparency is generally facilitated through contract award databases and reporting requirements, though detailed performance data may be less publicly accessible. Accountability measures would be tied to contract deliverables, performance metrics, and the terms of the Cost Plus Fixed Fee agreement.
Related Government Programs
- Defense Information Technology Contracting Organization (DITCO) contracts
- Army Enterprise Software Support
- Department of Defense IT Modernization Programs
- Software Development and Maintenance Services
- IT Sustainment Contracts
Risk Flags
- Potential for cost overruns due to CPFF contract type.
- Limited competition may impact price competitiveness.
- Scope creep risk over the contract duration.
- Dependency on a single contractor for critical software sustainment.
Tags
it-services, software-engineering, software-sustainment, department-of-defense, department-of-the-army, cost-plus-fixed-fee, full-and-open-competition, engineering-services, leidos-inc, maryland, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $73.6 million to LEIDOS, INC.. IGF::OT::IGF SOFTWARE ENGINEERING AND SUSTAINMENT
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 $73.6 million.
What is the period of performance?
Start: 2012-09-20. End: 2016-04-09.
What is Leidos, Inc.'s track record with the Department of Defense for similar software engineering and sustainment contracts?
Leidos, Inc. has a substantial track record with the Department of Defense, frequently securing large contracts across various IT and engineering domains. For software engineering and sustainment specifically, Leidos has been involved in numerous projects supporting different branches of the military. Their history includes managing complex systems, ensuring cybersecurity, and providing long-term support for critical software infrastructure. Analyzing their past performance on similar contracts, including any past performance issues or commendations, would provide context for their capability to execute this specific $73.6 million award effectively. This includes examining their on-time delivery rates, budget adherence, and quality of service in previous engagements.
How does the $73.6 million award compare to the average cost of similar software sustainment contracts within the DoD?
Determining the precise average cost for similar software sustainment contracts within the DoD is complex due to variations in scope, duration, technology, and specific services required. However, $73.6 million over approximately four years represents a significant investment. Contracts of this magnitude often involve supporting large, mission-critical systems with extensive user bases. Benchmarking would require comparing this contract's total value and annual spending against other DoD contracts for sustainment of enterprise resource planning (ERP) systems, command and control (C2) software, or major intelligence systems. Factors like the level of customization, the number of users supported, and the criticality of the software to military operations heavily influence cost, making direct comparisons challenging without detailed service descriptions.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for software sustainment?
The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for software sustainment revolve around cost control and contractor incentive alignment. While the fixed fee provides the contractor with a target profit, the 'cost plus' element means the government reimburses allowable costs incurred by the contractor. This can create an incentive for the contractor to incur higher costs, as it doesn't directly reduce their fee (though it increases the total contract price). For the government, the risk is that costs could escalate beyond initial projections if not managed diligently. Effective oversight, robust cost accounting standards, and clear definition of allowable costs are crucial to mitigate these risks and ensure the government receives good value. Scope creep is another significant risk, where evolving requirements can lead to unplanned cost increases.
What is the expected impact of this contract on the operational effectiveness of the U.S. Army's software systems?
This contract is expected to have a positive impact on the operational effectiveness of the U.S. Army's software systems by ensuring their continued sustainment, maintenance, and potential modernization. Software sustainment involves fixing bugs, applying security patches, and ensuring compatibility with evolving hardware and operating systems. By awarding this contract, the Army aims to prevent system degradation, reduce downtime, and maintain the reliability of critical applications. Depending on the contract's scope, it may also include enhancements or upgrades that improve functionality, performance, or user experience, thereby directly contributing to the Army's mission readiness and overall operational capabilities.
How has federal spending on engineering services (NAICS 541330) trended in recent years, and how does this award fit into that trend?
Federal spending on engineering services, categorized under NAICS code 541330, has generally seen a consistent demand, particularly from defense and infrastructure agencies. This sector often experiences significant outlays due to the complexity and critical nature of engineering projects, including defense systems, aerospace, and civil infrastructure. The $73.6 million award to Leidos for software engineering and sustainment fits within this trend, highlighting the government's continued reliance on specialized engineering expertise for its technological infrastructure. While defense spending can fluctuate based on geopolitical factors and budget priorities, the need for ongoing engineering support for complex systems like software ensures a sustained level of contracting activity in this area.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 2
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 3000 LINCOLN DR E, MARLTON, NJ, 08053
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $76,107,130
Exercised Options: $74,701,459
Current Obligation: $73,619,399
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W15P7T06DE405
IDV Type: IDC
Timeline
Start Date: 2012-09-20
Current End Date: 2016-04-09
Potential End Date: 2016-05-09 12:05:00
Last Modified: 2022-09-02
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