Leidos Inc. awarded $468.7M for Army parts, with a 2189-day duration
Contract Overview
Contract Amount: $468,718,474 ($468.7M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2009-09-30
End Date: 2015-09-28
Contract Duration: 2,189 days
Daily Burn Rate: $214.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 5
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: BASE PERIOD - MOI PARTS BUY
Place of Performance
Location: MARLTON, BURLINGTON County, NEW JERSEY, 08053
Plain-Language Summary
Department of Defense obligated $468.7 million to LEIDOS, INC. for work described as: BASE PERIOD - MOI PARTS BUY Key points: 1. The contract's value suggests a significant need for specialized parts within the Department of the Army. 2. Leidos, Inc. has secured a substantial portion of this spending, indicating a strong existing relationship or competitive advantage. 3. The duration of nearly six years points to a long-term requirement for these parts, potentially involving complex logistics or sustainment. 4. The 'Research and Development' NAICS code, while broad, suggests the parts may be for advanced or developmental systems. 5. The contract type (Cost Plus Fixed Fee) can sometimes lead to cost overruns if not managed tightly. 6. The absence of small business set-aside flags warrants further investigation into subcontracting opportunities.
Value Assessment
Rating: fair
Benchmarking the value of $468.7 million for 'MOI PARTS BUY' over 2189 days is challenging without more specific details on the parts themselves. However, given the duration and the R&D NAICS code, the cost appears substantial. The Cost Plus Fixed Fee (CPFF) contract type introduces a degree of risk, as it allows for the reimbursement of costs plus a fixed fee, which can sometimes lead to higher final costs compared to fixed-price contracts if cost controls are not robust. Without comparable contract data for similar 'MOI PARTS BUY' procurements, a definitive value-for-money assessment is difficult, but the scale suggests a critical and potentially high-cost requirement.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under 'FULL AND OPEN COMPETITION,' indicating that all responsible sources were permitted to submit offers. The presence of 5 offers suggests a reasonably competitive environment for this specific procurement. A competitive process is generally favorable for price discovery and ensuring the government receives the best value. However, the ultimate impact on pricing depends on the specific technical requirements and the number of truly capable bidders.
Taxpayer Impact: A full and open competition, with multiple bidders, generally benefits taxpayers by driving down prices through market forces and encouraging innovation among potential suppliers.
Public Impact
The Department of the Army benefits from the acquisition of essential parts for its operations and potentially for research and development initiatives. This contract supports the sustainment and readiness of military equipment or systems requiring specialized components. The geographic impact is primarily centered around New Jersey, where the contractor is located, and wherever the parts are ultimately utilized by the Army. Workforce implications include employment opportunities at Leidos, Inc. and potentially its subcontractors, particularly in areas related to logistics, manufacturing, and R&D.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type can lead to cost escalation if not closely monitored.
- The broad 'Research and Development' NAICS code makes it difficult to ascertain the exact nature and criticality of the parts being procured.
- Limited public information on the specific 'MOI PARTS BUY' makes it hard to benchmark value effectively.
- The duration of the contract (2189 days) requires sustained oversight to ensure continued relevance and cost-effectiveness.
Positive Signals
- Awarded under full and open competition, suggesting a robust bidding process.
- Multiple offers (5) indicate a degree of market interest and potential for competitive pricing.
- Leidos, Inc. is a large, established government contractor with a track record in various defense and technology sectors.
- The contract addresses a specific need for parts, implying a defined requirement within Army operations.
Sector Analysis
The defense industrial base relies heavily on specialized parts for the maintenance, repair, and upgrade of complex military systems. This contract falls within the Research and Development sector, specifically related to physical, engineering, and life sciences, suggesting the parts may be for advanced or experimental platforms. The total federal spending on R&D is in the billions annually, with a significant portion allocated to defense. Contracts like this are crucial for ensuring technological superiority and operational readiness.
Small Business Impact
The data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). As a large prime contract awarded to Leidos, Inc., there is potential for significant subcontracting opportunities. However, without explicit small business subcontracting goals or reporting, it is unclear how much of this value will flow down to small businesses. Further analysis would be needed to determine if subcontracting plans were mandated and if they were met.
Oversight & Accountability
Oversight for this contract would primarily reside with the Department of the Army contracting and program management offices. As a Cost Plus Fixed Fee contract, rigorous financial oversight is crucial to monitor expenditures and ensure the fixed fee remains appropriate. Transparency is facilitated by contract award data, but detailed performance and cost reporting are typically internal to the agency and contractor. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Department of Defense Research and Development Spending
- Army Logistics and Sustainment Contracts
- Specialized Parts Procurement
- Leidos Inc. Defense Contracts
Risk Flags
- Potential for cost overruns due to CPFF contract type.
- Ambiguity in contract scope due to broad R&D classification.
- Long contract duration may lead to requirement obsolescence or reduced urgency.
- Lack of specific small business set-aside information.
Tags
defense, department-of-defense, department-of-the-army, research-and-development, cost-plus-fixed-fee, full-and-open-competition, parts-procurement, leidos-inc, new-jersey, long-term-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $468.7 million to LEIDOS, INC.. BASE PERIOD - MOI PARTS BUY
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 $468.7 million.
What is the period of performance?
Start: 2009-09-30. End: 2015-09-28.
What is the specific nature of the 'MOI PARTS BUY' and why is it classified under R&D?
The term 'MOI PARTS BUY' is a generic description within the contract data, likely referring to 'Material of Interest' or a similar internal designation for critical components. Its classification under NAICS code 541710 (Research and Development in the Physical, Engineering, and Life Sciences) suggests that these parts are either used in the development of new technologies, are highly specialized components for experimental systems, or are parts that require significant research to source or manufacture. Without access to the contract's Statement of Work (SOW) or detailed product descriptions, the precise nature of these parts remains ambiguous. However, the R&D classification implies they are not standard off-the-shelf components but rather items tied to innovation or advanced technological applications within the Army's purview.
How does the Cost Plus Fixed Fee (CPFF) contract type impact the value for money in this $468.7M award?
The Cost Plus Fixed Fee (CPFF) contract type means the contractor, Leidos, Inc., is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is often used when the scope of work is not precisely defined, or when there is significant uncertainty in the costs involved, such as in research and development. While it allows flexibility and encourages the contractor to undertake challenging projects, it carries a risk of cost overruns if not managed diligently. The 'value for money' is therefore heavily dependent on the government's ability to effectively monitor and control the contractor's costs, ensuring that the final price, including the fixed fee, represents a fair cost for the delivered goods or services. Without robust oversight, CPFF contracts can be less cost-effective than fixed-price arrangements.
What does the '5' in the 'no' field signify, and how does it relate to competition?
The 'no' field, with a value of '5', likely represents the number of offers received for this contract. In the context of a 'FULL AND OPEN COMPETITION', receiving 5 offers suggests a moderately competitive environment. This number indicates that at least five different companies or entities were interested and capable enough to submit a proposal. While 5 offers are better than a sole-source or limited competition, the true level of competition also depends on the quality and competitiveness of those offers. A higher number of offers generally correlates with better price discovery and a greater likelihood of the government securing favorable terms and pricing. However, the specific nature of the parts and the technical requirements could limit the pool of truly qualified bidders, making 5 offers a reasonable, though not exceptionally high, number.
What are the potential risks associated with a contract duration of 2189 days (nearly 6 years)?
A contract duration of 2189 days, nearly six years, presents several potential risks. Firstly, the requirements themselves might evolve significantly over such a long period, potentially rendering the original scope of work obsolete or less relevant. This necessitates careful contract management and potential modifications. Secondly, long-term contracts can lead to complacency or reduced urgency from the contractor if not actively managed. Thirdly, market prices for materials or labor could fluctuate substantially over six years, impacting the cost-effectiveness, especially under a CPFF arrangement. Finally, there's a risk of vendor lock-in, where the government becomes heavily reliant on a single contractor for an extended period, potentially hindering the adoption of newer technologies or more competitive solutions that might emerge.
Given Leidos, Inc. is the sole awardee listed, what is their track record with the Department of the Army?
Leidos, Inc. is a major government contractor with a substantial and long-standing track record across various federal agencies, including the Department of Defense and specifically the Department of the Army. They have a broad portfolio encompassing IT services, systems engineering, logistics, intelligence support, and scientific research. Their history with the Army includes numerous contracts for complex programs, often involving advanced technology integration and support services. While this specific contract is for 'MOI PARTS BUY' under R&D, Leidos's overall experience suggests they possess the technical and managerial capabilities to handle such procurements. However, the performance on this particular contract would be specific to its unique requirements and execution.
How does this contract's spending compare to other R&D contracts within the Department of the Army?
The $468.7 million award for 'MOI PARTS BUY' over nearly six years is a significant sum, placing it among substantial R&D investments within the Department of the Army. The Army's R&D budget typically runs into the billions of dollars annually, funding a wide array of projects from basic research to advanced technology development. Contracts of this magnitude are generally reserved for critical programs or systems requiring extensive development, testing, or specialized components. To provide a precise comparison, one would need to analyze the Army's historical spending data for contracts with similar NAICS codes (541710) and contract types (CPFF), looking at the average award value and duration. However, it's safe to assume this contract represents a considerable allocation of resources towards a specific, likely high-priority, research or development objective.
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 › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: W9113M06R0014
Offers Received: 5
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 3000 LINCOLN DR E STE G, 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: $581,655,412
Exercised Options: $581,655,412
Current Obligation: $468,718,474
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W9113M07D0006
IDV Type: IDC
Timeline
Start Date: 2009-09-30
Current End Date: 2015-09-28
Potential End Date: 2015-09-28 00:00:00
Last Modified: 2024-08-21
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