Leidos Inc. awarded $47.8M for Army technology insertion, a follow-on to a previous task order
Contract Overview
Contract Amount: $47,812,156 ($47.8M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2013-09-22
End Date: 2016-03-22
Contract Duration: 912 days
Daily Burn Rate: $52.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: TECHNOLOGY INSERTION SUPPORT FOR 12 MONTH EFFORT. FOLLOW-ON EFFORT TO TASK ODER 0053 IGF::OT::IGF
Place of Performance
Location: MARLTON, BURLINGTON County, NEW JERSEY, 08053
Plain-Language Summary
Department of Defense obligated $47.8 million to LEIDOS, INC. for work described as: TECHNOLOGY INSERTION SUPPORT FOR 12 MONTH EFFORT. FOLLOW-ON EFFORT TO TASK ODER 0053 IGF::OT::IGF Key points: 1. Contract value of $47.8M over 912 days indicates a significant investment in technology. 2. Follow-on nature suggests successful prior performance and ongoing need for services. 3. Engineering services category points to complex technical requirements. 4. Cost Plus Fixed Fee contract type may incentivize cost control but requires careful oversight. 5. Awarded to a single contractor, Leidos, Inc., highlighting potential for concentrated expertise. 6. Geographic location in New Jersey may have implications for local economic impact.
Value Assessment
Rating: good
The contract value of $47.8 million for 912 days of effort translates to approximately $52,426 per day. This daily rate appears reasonable for specialized engineering and technology insertion services, especially considering the follow-on nature which implies established processes and expertise. Benchmarking against similar large-scale technology development contracts would provide a more precise value-for-money assessment, but the initial indication suggests a fair price for the scope of work.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The specific number of bidders is not provided, but the 'full and open' designation suggests a competitive process was initiated. This approach is generally favorable for price discovery and ensuring the government receives competitive offers.
Taxpayer Impact: Full and open competition typically leads to better pricing for taxpayers by fostering a competitive environment among potential contractors.
Public Impact
The Department of the Army benefits from advanced technology insertion to maintain operational effectiveness. Services delivered likely include research, development, integration, and testing of new technologies. The geographic impact is centered in New Jersey, potentially supporting local technical workforce. The contract supports specialized engineering and technical roles within the defense sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contracts can sometimes lead to cost overruns if not managed tightly.
- Reliance on a single contractor for follow-on work could limit future competitive options.
- The specific technologies being inserted are not detailed, posing a potential risk if they become obsolete quickly.
Positive Signals
- Follow-on nature suggests successful prior performance and a stable, ongoing requirement.
- Award to a large, established contractor like Leidos, Inc. implies a high level of capability and reliability.
- Full and open competition indicates a robust procurement process was followed.
Sector Analysis
This contract falls within the Engineering Services sector, a critical component of the broader defense technology market. The market for defense engineering services is substantial, driven by the continuous need for modernization and technological superiority. This specific contract for technology insertion supports the Army's efforts to integrate new capabilities, aligning with broader trends in defense spending focused on advanced systems and digital transformation.
Small Business Impact
The contract was awarded under full and open competition and does not indicate any specific small business set-aside. While Leidos, Inc. is a large business, there may be subcontracting opportunities for small businesses within the performance of this contract. The extent of small business participation would depend on Leidos's subcontracting plan and the nature of the services required.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the program executive office within the Department of the Army. The Cost Plus Fixed Fee structure necessitates close monitoring of costs and performance to ensure value for money. Transparency is generally maintained through contract reporting mechanisms, and the Inspector General's office may conduct audits or investigations as deemed necessary.
Related Government Programs
- Department of Defense Research and Development
- Army Technology Modernization Programs
- Defense Engineering Services Contracts
- Information Technology Support Services
Risk Flags
- Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
- Follow-on nature may reduce future competition if not re-competed.
- Lack of specific technology details limits understanding of obsolescence risk.
Tags
defense, department-of-the-army, engineering-services, technology-insertion, cost-plus-fixed-fee, full-and-open-competition, leidos-inc, new-jersey, follow-on-contract, technology-modernization
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $47.8 million to LEIDOS, INC.. TECHNOLOGY INSERTION SUPPORT FOR 12 MONTH EFFORT. FOLLOW-ON EFFORT TO TASK ODER 0053 IGF::OT::IGF
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 $47.8 million.
What is the period of performance?
Start: 2013-09-22. End: 2016-03-22.
What was the specific nature of the technology insertion supported by this contract?
The provided data indicates this contract was for 'TECHNOLOGY INSERTION SUPPORT'. While the exact technologies are not specified, this generally refers to the process of integrating new or upgraded technological components into existing systems or platforms. For the Department of the Army, this could range from software upgrades and cybersecurity enhancements to new sensor integration or communication system improvements. The follow-on nature to a previous task order (0053) suggests a continuation or expansion of previously supported technology insertion efforts, implying a sustained need and potentially successful prior implementation.
How does the daily rate of approximately $52,426 compare to industry benchmarks for similar engineering services?
The calculated daily rate of approximately $52,426 for Leidos, Inc. under this Cost Plus Fixed Fee contract needs context for a precise benchmark. Engineering services, particularly those involving advanced technology insertion for defense applications, command premium rates due to specialized expertise, security clearances, and R&D components. For large-scale, complex projects requiring high-level engineering talent and project management, this daily rate is likely within a reasonable range, especially considering it's a follow-on effort. However, without knowing the specific skill mix, overhead allocation, and profit margins factored into the fixed fee, a definitive comparison to industry benchmarks is challenging. Government cost-reimbursement contracts often have negotiated rates that reflect specific contract terms and conditions.
What are the potential risks associated with a Cost Plus Fixed Fee (CPFF) contract type for technology insertion?
Cost Plus Fixed Fee contracts present unique risks for both the government and the contractor. For the government, the primary risk is that the contractor may have less incentive to control costs rigorously compared to fixed-price contracts, as costs are reimbursed. While the 'fixed fee' provides a ceiling on profit, the contractor is still assured of recovering their allowable costs. This can lead to potential cost overruns if the scope of work expands or unforeseen challenges arise, requiring careful government oversight to manage expenditures. For the contractor, the risk lies in accurately estimating the costs to perform the fixed fee, as any costs exceeding the estimate are borne by them. In technology insertion, where R&D and integration can be unpredictable, this risk is amplified.
What does the 'follow-on effort' designation imply about the contractor's performance and the program's stability?
The designation 'FOLLOW-ON EFFORT TO TASK ORDER 0053' strongly implies that Leidos, Inc. successfully performed under the previous task order. This suggests a level of contractor capability, reliability, and satisfaction from the Department of the Army's perspective. It indicates that the technology insertion requirements are ongoing or evolving, and the Army has confidence in Leidos to continue providing these services. This continuity can lead to efficiencies, as the contractor is already familiar with the systems, personnel, and objectives. However, it also raises questions about the long-term competitive landscape if such follow-on efforts become the norm without re-competition.
How might the geographic location in New Jersey impact the contract's execution and outcomes?
The contract's performance location in New Jersey (NJ) could have several implications. New Jersey has a strong ecosystem for technology, engineering, and defense contractors, potentially providing access to a skilled workforce and relevant subcontractors. Proximity to military installations or research facilities in the region might also facilitate collaboration and oversight. However, the cost of living and doing business in New Jersey can be higher than in some other regions, potentially influencing labor costs and overall contract expenses. The specific impact would depend on whether the work is performed at a Leidos facility, a government site, or a combination thereof.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
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: $47,812,156
Exercised Options: $47,812,156
Current Obligation: $47,812,156
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: 2013-09-22
Current End Date: 2016-03-22
Potential End Date: 2016-03-22 12:03:00
Last Modified: 2022-09-02
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