Leidos Biomedical Research Inc. awarded $126.4M for R&D services, with a significant portion allocated to lease management

Contract Overview

Contract Amount: $126,404,791 ($126.4M)

Contractor: Leidos Biomedical Research Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2019-08-30

End Date: 2024-08-30

Contract Duration: 1,827 days

Daily Burn Rate: $69.2K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: FFRDC SPACE MANAGEMENT TASK ORDER (LEASES)

Place of Performance

Location: FREDERICK, FREDERICK County, MARYLAND, 21702

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $126.4 million to LEIDOS BIOMEDICAL RESEARCH INC for work described as: FFRDC SPACE MANAGEMENT TASK ORDER (LEASES) Key points: 1. Contract focuses on research and development, with a notable component for facility lease management. 2. The contract type is Cost Plus Fixed Fee, which can incentivize cost overruns if not closely monitored. 3. Awarded by NIH, a leading health research agency, suggesting a focus on critical scientific endeavors. 4. The contract duration of 1827 days (approx. 5 years) indicates a long-term need for these services. 5. The specific NAICS code (541715) points to a specialized area within R&D, requiring expert knowledge. 6. The contract is a delivery order under a larger IDIQ or similar vehicle, implying pre-competed terms.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more detailed cost breakdowns for specific services like lease management versus pure R&D. The Cost Plus Fixed Fee structure requires careful oversight to ensure costs remain reasonable. Comparing this to similar FFRDC contracts for space management would provide better context on value for money. The total award amount of $126.4M over approximately five years suggests a substantial investment in supporting research infrastructure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to compete. This process is designed to foster price discovery and ensure the government receives competitive pricing. The specific number of bidders is not provided, but the full and open nature suggests a robust competitive environment.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs through market forces, ensuring that the selected contractor offers the best value proposition.

Public Impact

Researchers and scientists within the NIH ecosystem benefit from the operational support provided by this contract, enabling them to focus on their core research activities. The contract supports critical research and development efforts, potentially leading to advancements in health and medicine. The geographic impact is primarily within Maryland, where the contractor is located and likely where the leased facilities are situated. The contract supports a specialized workforce in research and facility management, contributing to the scientific and administrative infrastructure of the NIH.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can lead to higher costs if not managed diligently, as the contractor is reimbursed for costs plus a fixed fee.
The lack of specific performance metrics or detailed cost breakdowns makes it difficult to fully assess the efficiency and effectiveness of the services provided.
The reliance on a single delivery order under a potential larger contract vehicle may limit ongoing price scrutiny if the base contract terms are not regularly reviewed.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that should yield fair pricing.
The contract is with Leidos Biomedical Research Inc., an established entity often involved in significant government research support.
The long duration indicates a stable, ongoing need for these critical support services, suggesting a well-defined requirement.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The inclusion of space and lease management indicates a significant operational support component for research facilities. Comparable spending in this area often involves large contracts for managing government-owned or leased research spaces, as well as funding for scientific research itself. The market for such services is competitive, involving specialized firms with expertise in both scientific support and real estate management.

Small Business Impact

The data indicates that small business participation (sb) is false, meaning there is no explicit small business set-aside for this contract. Furthermore, the contract is not specifically designated for small businesses. This suggests that larger, established companies were likely the primary competitors. There is no direct information on subcontracting plans for small businesses within this award, which could be a missed opportunity for small business engagement.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Health and Human Services and the National Institutes of Health. As a Cost Plus Fixed Fee contract, rigorous financial oversight and auditing are crucial to ensure that costs are reasonable and allowable. Transparency is typically managed through contract reporting mechanisms and potential reviews by Inspectors General if specific concerns arise regarding fraud, waste, or abuse. The specific oversight mechanisms for lease management aspects would also be critical.

Related Government Programs

NIH Research Support Contracts
Federal Real Estate Management Services
Life Sciences Research and Development
FFRDC Support Services
Government Lease Administration

Risk Flags

Cost Plus Fixed Fee structure requires diligent oversight to manage costs.
Potential for suboptimal lease terms if contractor prioritizes fee over best value.
Need for specialized expertise in federal real estate and leasing regulations.
Long contract duration necessitates ongoing performance monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $126.4 million to LEIDOS BIOMEDICAL RESEARCH INC. FFRDC SPACE MANAGEMENT TASK ORDER (LEASES)

Who is the contractor on this award?

The obligated recipient is LEIDOS BIOMEDICAL RESEARCH INC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $126.4 million.

What is the period of performance?

Start: 2019-08-30. End: 2024-08-30.

What is the historical spending trend for Leidos Biomedical Research Inc. with the NIH for similar R&D and facility management services?

Analyzing historical spending for Leidos Biomedical Research Inc. with the NIH reveals a consistent pattern of significant contract awards, particularly in support of biomedical research. For instance, prior to this $126.4M award, Leidos has managed substantial portfolios of work for NIH, often through large, multi-year contracts. These often encompass a broad range of services, including laboratory support, data management, and administrative functions, alongside facility operations. The specific allocation towards lease management within this contract suggests a growing emphasis on infrastructure efficiency or expansion by NIH. Without access to granular historical data for this specific task order's predecessors, a precise trend is difficult to establish, but the overall relationship indicates a long-standing and substantial partnership focused on enabling NIH's research mission through comprehensive support services.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for R&D services in terms of cost efficiency?

The Cost Plus Fixed Fee (CPFF) contract structure is often used for research and development where the scope of work is not precisely defined, or innovation is a key component, making it difficult to establish a firm fixed price upfront. In CPFF, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While this structure allows for flexibility and encourages innovation by reducing the contractor's risk, it can be less cost-efficient for the government compared to Firm-Fixed-Price (FFP) contracts. With FFP, the contractor bears the risk of cost overruns, incentivizing them to manage costs tightly. However, FFP can stifle innovation if contractors become overly cautious to avoid unexpected expenses. Other structures like Cost Plus Incentive Fee (CPIF) aim to balance cost control and performance incentives. For R&D, CPFF is common, but requires robust government oversight to manage costs effectively and prevent potential overspending.

What are the key performance indicators (KPIs) typically associated with FFRDC space management task orders?

Key performance indicators (KPIs) for FFRDC space management task orders typically revolve around operational efficiency, cost-effectiveness, and compliance. Common KPIs include: Occupancy rates and space utilization efficiency, ensuring that leased or managed spaces are used optimally. Cost per square foot for operations, maintenance, and leasing, benchmarked against market rates and historical data. Lease compliance, ensuring adherence to all terms and conditions within lease agreements, including renewal options and termination clauses. Facility maintenance and repair response times and resolution rates, ensuring a functional and safe environment. Energy consumption and sustainability metrics, reflecting efforts to reduce environmental impact. Budget adherence and variance analysis, demonstrating effective financial management of allocated funds. Timeliness of reporting and accuracy of financial data provided to the government agency.

What is the typical profit margin (fixed fee) for CPFF contracts in the R&D sector, and how does Leidos's fee compare?

The fixed fee in Cost Plus Fixed Fee (CPFF) contracts typically ranges from 5% to 15% of the estimated cost, depending on the complexity of the work, the level of risk involved, and prevailing market rates. For highly specialized or complex R&D services, the fee might lean towards the higher end of this spectrum. Government regulations and agency policies often provide guidance on acceptable fee levels. Without specific details on the fee percentage negotiated for this Leidos Biomedical Research Inc. contract, a direct comparison is not possible. However, the fee is intended to compensate the contractor for their expertise and the management effort required, distinct from the reimbursement of direct and indirect costs. Agencies aim to negotiate fees that are fair and reasonable, reflecting the value and risk associated with the contract.

How does the $126.4M total award value compare to other NIH R&D contracts of similar scope and duration?

The $126.4M total award value for this FFRDC Space Management Task Order, spanning approximately five years (1827 days), represents a significant investment. To contextualize this, comparable NIH R&D contracts can vary widely based on the specific scientific domain, the scale of research operations, and the duration. Contracts for large-scale clinical trials, advanced genomics research, or major facility construction/renovation can easily exceed this amount. However, for contracts focused on operational support, administrative services, or specialized R&D task orders like this one, $126.4M over five years is substantial. It suggests a critical and ongoing need for the services provided, likely encompassing extensive facility management and support for a considerable research infrastructure. Benchmarking against other FFRDC contracts or large IDIQ task orders for similar support functions would provide a more precise comparison of its relative size and value.

What are the potential risks associated with managing leased facilities under a CPFF contract for a federal agency like NIH?

Managing leased facilities under a Cost Plus Fixed Fee (CPFF) contract for an agency like NIH presents several potential risks. Firstly, the CPFF structure itself carries a risk of cost escalation if the contractor does not diligently manage operational expenses, as they are reimbursed for allowable costs. This is particularly relevant for lease management, where fluctuating market rents, unexpected maintenance needs, or complex negotiation terms can drive up costs. Secondly, there's a risk of suboptimal lease terms being negotiated if the contractor's primary incentive is the fixed fee rather than achieving the absolute best financial outcome for the government. This could lead to unfavorable clauses, higher-than-market rents, or inefficient space utilization. Thirdly, ensuring compliance with federal acquisition regulations and specific agency policies related to real estate and leasing requires specialized expertise, and any lapse could lead to financial penalties or operational disruptions. Finally, the long duration of the contract necessitates continuous oversight to ensure the contractor remains aligned with NIH's evolving needs and strategic objectives.

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: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N02CO7240681

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Leidos Holdings, Inc.

Address: 1050 BOYLES ST, FREDERICK, MD, 21702

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $130,365,835

Exercised Options: $127,124,366

Current Obligation: $126,404,791

Actual Outlays: $74,525,612

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: 75N91019D00024

IDV Type: IDC

Timeline