DOJ's $374M IT contract for critical functions awarded to Leidos, Inc. shows fair value
Contract Overview
Contract Amount: $374,230,402 ($374.2M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Justice
Start Date: 2012-12-28
End Date: 2020-06-30
Contract Duration: 2,741 days
Daily Burn Rate: $136.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: IGF::CT::IGF FOR CRITICAL FUNCTIONS. ENTERPRISE STANDARD ARCHITECTURE (ESA) IV
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20226
Plain-Language Summary
Department of Justice obligated $374.2 million to LEIDOS, INC. for work described as: IGF::CT::IGF FOR CRITICAL FUNCTIONS. ENTERPRISE STANDARD ARCHITECTURE (ESA) IV Key points: 1. Contract value of $374M over 8 years suggests a moderate annual spend. 2. Full and open competition was utilized, indicating a potentially competitive bidding process. 3. The contract's duration and scope present moderate performance and execution risks. 4. This contract supports essential IT functions within the ATF, aligning with agency operational needs. 5. The IT services sector is highly competitive, with many providers capable of fulfilling such requirements. 6. Fixed-price contract type helps mitigate cost overrun risks for the government.
Value Assessment
Rating: fair
The total contract value of $374.2 million over approximately 8 years results in an average annual value of around $46.7 million. Benchmarking this against similar large-scale IT services contracts for federal agencies suggests this is within a reasonable range, though specific service details are needed for a precise comparison. The firm fixed-price nature of the contract provides cost certainty for the government, which is a positive indicator of value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. The presence of 3 bids indicates a degree of competition, though the exact number of bidders for large federal IT contracts can vary widely. A higher number of bidders generally leads to better price discovery and potentially lower prices for the government.
Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages a wider range of offers, potentially driving down costs and improving service quality through competitive pressure.
Public Impact
The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) benefits from enhanced IT infrastructure and services. Critical IT functions supporting law enforcement and regulatory activities are maintained and improved. The primary geographic impact is within the District of Columbia, where the agency is headquartered. The contract likely supports IT professionals and related technical roles within the contractor's workforce.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Contract duration of nearly 8 years could lead to technology obsolescence if not managed proactively.
- Reliance on a single contractor for critical functions may pose risks if performance degrades or the contractor faces financial instability.
- Scope creep could occur over the long duration, potentially increasing costs beyond initial projections if not tightly managed.
Positive Signals
- The firm fixed-price contract type provides cost predictability and limits the government's exposure to cost overruns.
- Awarding under full and open competition suggests a robust process aimed at securing the best value.
- The contract supports critical functions, indicating its importance to the agency's mission.
Sector Analysis
This contract falls within the IT services sector, specifically computer systems design services. The federal IT market is substantial, with agencies consistently investing in maintaining and upgrading their technological infrastructure. This contract for enterprise standard architecture and critical functions is a significant component of the ATF's operational technology strategy, fitting within the broader trend of federal agencies outsourcing complex IT management and support.
Small Business Impact
The data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). While this contract was not directly set aside for small businesses, the prime contractor, Leidos, Inc., may engage small businesses as subcontractors. The extent of subcontracting to small businesses is not detailed in the provided data, but it represents a potential avenue for small business involvement in supporting this large federal contract.
Oversight & Accountability
Oversight for this contract would typically be managed by the Bureau of Alcohol, Tobacco, Firearms and Explosives Acquisition and Property Management Division. The firm fixed-price nature provides a degree of financial oversight by limiting cost increases. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.
Related Government Programs
- IT Enterprise Architecture Support
- Computer Systems Design Services
- Federal Civilian Agency IT Modernization
- Law Enforcement Technology Support
- Department of Justice IT Contracts
Risk Flags
- Long contract duration may lead to technology obsolescence.
- Potential for vendor lock-in due to critical function reliance.
- Risk of scope creep over the contract's extended term.
- Dependence on a single contractor for essential IT services.
Tags
it-services, computer-systems-design, department-of-justice, atf, delivery-order, firm-fixed-price, full-and-open-competition, large-contract, district-of-columbia, enterprise-architecture, critical-functions
Frequently Asked Questions
What is this federal contract paying for?
Department of Justice awarded $374.2 million to LEIDOS, INC.. IGF::CT::IGF FOR CRITICAL FUNCTIONS. ENTERPRISE STANDARD ARCHITECTURE (ESA) IV
Who is the contractor on this award?
The obligated recipient is LEIDOS, INC..
Which agency awarded this contract?
Awarding agency: Department of Justice (Bureau of Alcohol, Tobacco, Firearms and Explosives Acquisition and Property Management Division).
What is the total obligated amount?
The obligated amount is $374.2 million.
What is the period of performance?
Start: 2012-12-28. End: 2020-06-30.
What is the track record of Leidos, Inc. in performing similar large-scale IT services contracts for federal agencies?
Leidos, Inc. is a major government contractor with extensive experience in IT services, systems integration, and support across various federal agencies, including defense, intelligence, and civilian sectors. They have a history of managing large, complex IT programs. Performance on similar contracts would be assessed through past performance evaluations during the bidding process and through contract performance metrics. Agencies typically review a contractor's history of meeting deadlines, staying within budget, and delivering quality services when making award decisions. Specific details on Leidos' performance on comparable contracts would require access to federal procurement databases and agency performance reports.
How does the average annual cost of this contract compare to similar IT services contracts awarded by the ATF or other DOJ components?
The average annual cost of this contract is approximately $46.7 million ($374.2M / ~8 years). To benchmark this effectively, one would need to compare it against other large IT services contracts within the Department of Justice or similar law enforcement agencies. Factors such as the scope of services (e.g., infrastructure management, cybersecurity, software development), the complexity of the systems supported, and the specific technologies involved significantly influence pricing. Without detailed service descriptions and comparable contract data, a precise value-for-money assessment is challenging. However, the firm fixed-price nature suggests a defined scope and cost structure.
What are the primary risks associated with a contract of this duration (nearly 8 years) for critical IT functions?
The primary risks associated with an 8-year contract for critical IT functions include technological obsolescence, potential vendor lock-in, and the challenge of maintaining service relevance as agency needs evolve. Technology advances rapidly, and an 8-year-old architecture or set of services might not meet future requirements or security standards. There's also a risk that the contractor's capabilities or focus might shift over such a long period. Furthermore, if the contractor is the sole provider for critical functions, any performance issues or financial instability on their part could severely disrupt agency operations. Proactive contract management, regular reviews, and flexibility clauses are crucial to mitigate these risks.
How effective has 'full and open competition' been in ensuring competitive pricing for large federal IT contracts like this one?
Full and open competition is designed to maximize the pool of potential bidders, thereby fostering a competitive environment that ideally leads to better pricing and service quality for the government. For large IT contracts, the effectiveness can vary. While it opens the door to many vendors, the complexity and specialized nature of federal IT requirements can sometimes limit the number of truly capable bidders to a smaller group. The fact that there were 3 bidders suggests some level of competition, but whether this was sufficient to drive optimal pricing depends on the specific market dynamics and the perceived value of the contract. Analysis of the winning bid against government estimates or other proposals would provide further insight.
What are the implications of this contract's $374 million value on the IT services market, particularly for large system integrators?
A contract valued at $374 million represents a significant revenue stream and a substantial project for a large system integrator like Leidos. For the IT services market, such awards signal continued government investment in technology modernization and support. It reinforces the position of major players capable of handling large, complex, multi-year federal contracts. This type of contract can also influence market dynamics by potentially drawing resources and attention away from smaller, more specialized firms, or conversely, by creating subcontracting opportunities for them. The award highlights the ongoing demand for enterprise-level IT solutions within federal agencies.
Are there specific performance metrics or Service Level Agreements (SLAs) associated with this contract that indicate its effectiveness?
The provided data does not include specific performance metrics or Service Level Agreements (SLAs) for this contract. However, for a contract of this nature and value, particularly one supporting critical functions, it is highly probable that detailed SLAs and performance metrics were established as part of the contract's terms and conditions. These would typically cover aspects like system uptime, response times for issue resolution, security compliance, and project delivery timelines. The effectiveness of the contract would be measured against these predefined benchmarks, and failure to meet them could result in penalties or corrective actions.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design 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: 3
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc. (UEI: 611641312)
Address: 700 N FREDERICK AVE, GAITHERSBURG, MD, 20879
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $874,716,960
Exercised Options: $374,230,402
Current Obligation: $374,230,402
Subaward Activity
Number of Subawards: 173
Total Subaward Amount: $27,389,059
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: GS00Q09BGD0039
IDV Type: GWAC
Timeline
Start Date: 2012-12-28
Current End Date: 2020-06-30
Potential End Date: 2020-06-30 00:00:00
Last Modified: 2021-01-24
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