Leidos Inc. awarded $1.1B for FAA's National Airspace System support, spanning a decade
Contract Overview
Contract Amount: $1,098,901,162 ($1.1B)
Contractor: Leidos, Inc.
Awarding Agency: Department of Transportation
Start Date: 2010-10-25
End Date: 2020-10-12
Contract Duration: 3,640 days
Daily Burn Rate: $301.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS AWARD FEE
Sector: IT
Official Description: NATIONAL AIRSPACE SYSTEM (NAS) IMPLEMENTATION SUPPORT CONTRACT (NISC). PROVIDES ENGINEERING AND TECHNICAL SUPPORT SERVICES TO FAA ORGANIZATIONS RESPONSIBLE FOR NAS TRANSFORMATION, INTEGRATION AND IMPLEMENTATION IN THE AREAS OF IMPLEMENTATION AND INTEGRATION PLANNING, TRANSITION PLANNING, ENGINEERING SUPPORT, ENVIRONMENTAL SUPPORT, AUTOMATION SUPPORT AND OTHER ENGINEERING AND TECHNICAL DISCIPLINES AS REQUIRED. TAS::69 8107::TAS
Place of Performance
Location: GAITHERSBURG, MONTGOMERY County, MARYLAND, 20879
State: Maryland Government Spending
Plain-Language Summary
Department of Transportation obligated $1.10 billion to LEIDOS, INC. for work described as: NATIONAL AIRSPACE SYSTEM (NAS) IMPLEMENTATION SUPPORT CONTRACT (NISC). PROVIDES ENGINEERING AND TECHNICAL SUPPORT SERVICES TO FAA ORGANIZATIONS RESPONSIBLE FOR NAS TRANSFORMATION, INTEGRATION AND IMPLEMENTATION IN THE AREAS OF IMPLEMENTATION AND INTEGRATION PLANNING, TRANSITION … Key points: 1. Contract provides critical engineering and technical support for the modernization of the U.S. air traffic control system. 2. The extensive duration suggests a long-term need for specialized expertise in complex system integration. 3. Performance-based contract structure (Cost Plus Award Fee) incentivizes contractor efficiency and effectiveness. 4. The scope covers diverse areas including planning, environmental support, and automation, indicating a broad impact on NAS operations. 5. Significant investment reflects the ongoing commitment to upgrading and maintaining the safety and efficiency of the national airspace. 6. The contract's value places it among major federal IT and engineering service procurements.
Value Assessment
Rating: good
The contract's value of over $1 billion over 10 years for engineering and technical support for the National Airspace System (NAS) Implementation Support Contract (NISC) appears reasonable given the critical nature and complexity of the services. Benchmarking against similar large-scale, long-term government IT and engineering support contracts suggests this level of investment is within expected ranges for such comprehensive system modernization efforts. The Cost Plus Award Fee (CPAF) structure allows for flexibility and incentivizes performance, which can lead to better value if managed effectively.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. The presence of three bidders (no=3) suggests a competitive environment, which is generally favorable for price discovery and achieving a fair market price. The full and open nature of the competition is a positive indicator for the government's ability to secure competitive pricing and a wide range of technical solutions.
Taxpayer Impact: Taxpayers benefit from a competitive bidding process that aims to secure the best value for services essential to the safety and efficiency of the national airspace system. Full and open competition helps ensure that public funds are used efficiently by driving down costs and encouraging innovation.
Public Impact
The Federal Aviation Administration (FAA) benefits directly through enhanced engineering and technical support for critical NAS modernization projects. Aviation stakeholders, including airlines, pilots, and the flying public, benefit from a more modern, efficient, and safe air traffic control system. The contract supports jobs in engineering, technical services, and program management, primarily in Maryland (st: MD). The services delivered are crucial for the ongoing transformation, integration, and implementation of the NAS, impacting all aspects of air travel.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- The long duration of the contract (nearly 10 years) could lead to potential cost overruns if not closely monitored for scope creep or inefficiencies.
- Reliance on a single contractor for such a critical and extensive support role might pose risks if contractor performance degrades or if key personnel depart.
- The Cost Plus Award Fee structure, while incentivizing, requires robust oversight to ensure award fees are justified by exceptional performance and not merely routine.
- The complexity of the NAS and its ongoing transformation presents inherent technical risks that could impact project timelines and budgets.
Positive Signals
- The contract is a definitive contract, suggesting a clear understanding of requirements and a stable, long-term need.
- Awarded under full and open competition, indicating a robust selection process and potential for competitive pricing.
- The contractor, Leidos, Inc., is a large and experienced provider of government services, suggesting a strong track record in managing complex programs.
- The contract's focus on engineering and technical support for NAS implementation is vital for national infrastructure modernization and safety.
- The Cost Plus Award Fee structure, if managed well, can drive high performance and cost-effectiveness.
Sector Analysis
The National Airspace System (NAS) Implementation Support Contract (NISC) falls within the Engineering Services sector, specifically supporting large-scale government infrastructure modernization. The market for such services is characterized by a few large, specialized government contractors capable of handling complex, multi-year projects. Spending in this area is driven by the need to upgrade aging infrastructure, incorporate new technologies, and ensure the continued safety and efficiency of critical national systems like air traffic control. Comparable spending benchmarks would involve other large federal IT, systems engineering, and infrastructure support contracts.
Small Business Impact
This contract was not set aside for small businesses (ss: false, sb: false). As a large, definitive contract awarded through full and open competition, it is unlikely to have significant direct subcontracting opportunities specifically targeted at small businesses unless mandated by the prime contractor or agency. The primary focus is on the prime contractor's capabilities. The absence of small business set-asides means that the direct economic impact on the small business ecosystem for this specific contract is likely minimal, though Leidos may engage small businesses as part of its broader supply chain.
Oversight & Accountability
Oversight for this contract would primarily reside with the Federal Aviation Administration (FAA) contracting officers and program managers. The Cost Plus Award Fee (CPAF) structure necessitates rigorous performance monitoring and evaluation to justify award fees. Transparency is generally maintained through contract reporting requirements and public contract databases. While specific Inspector General (IG) jurisdiction can vary, the Department of Transportation's Office of Inspector General (OIG) would likely have oversight authority over potential fraud, waste, or abuse related to this significant federal expenditure.
Related Government Programs
- FAA NextGen Programs
- Air Traffic Control Modernization
- Federal IT Services
- Government Engineering Support Contracts
- Large-Scale Infrastructure Projects
Risk Flags
- Long contract duration increases risk of technological obsolescence.
- Potential for scope creep in complex, evolving system modernization.
- Reliance on a single prime contractor for critical support.
- Need for robust oversight of CPAF performance metrics.
Tags
engineering-services, it-services, federal-aviation-administration, department-of-transportation, national-airspace-system, cost-plus-award-fee, definitive-contract, full-and-open-competition, large-contract, infrastructure-modernization, maryland, leidos-inc
Frequently Asked Questions
What is this federal contract paying for?
Department of Transportation awarded $1.10 billion to LEIDOS, INC.. NATIONAL AIRSPACE SYSTEM (NAS) IMPLEMENTATION SUPPORT CONTRACT (NISC). PROVIDES ENGINEERING AND TECHNICAL SUPPORT SERVICES TO FAA ORGANIZATIONS RESPONSIBLE FOR NAS TRANSFORMATION, INTEGRATION AND IMPLEMENTATION IN THE AREAS OF IMPLEMENTATION AND INTEGRATION PLANNING, TRANSITION PLANNING, ENGINEERING SUPPORT, ENVIRONMENTAL SUPPORT, AUTOMATION SUPPORT AND OTHER ENGINEERING AND TECHNICAL DISCIPLINES AS REQUIRED. TAS::69 8107::TAS
Who is the contractor on this award?
The obligated recipient is LEIDOS, INC..
Which agency awarded this contract?
Awarding agency: Department of Transportation (Federal Aviation Administration).
What is the total obligated amount?
The obligated amount is $1.10 billion.
What is the period of performance?
Start: 2010-10-25. End: 2020-10-12.
What is Leidos, Inc.'s track record with similar large-scale federal engineering and IT support contracts?
Leidos, Inc. has a substantial track record in providing complex engineering, IT, and systems integration services to various U.S. federal agencies, including the Department of Defense, Intelligence Community, and civilian agencies like the FAA. They are known for managing large, long-term contracts involving critical infrastructure and national security. Their experience often includes areas like air traffic management, cybersecurity, enterprise IT, and mission-critical systems. This extensive background suggests they possess the organizational capacity, technical expertise, and program management maturity required for a contract of this scale and importance, although specific performance metrics on past FAA contracts would provide a more granular assessment.
How does the $1.1 billion cost compare to similar FAA modernization efforts or other large federal engineering contracts?
The $1.1 billion cost over approximately 10 years for the NISC contract is substantial but appears aligned with the scale and complexity of major federal IT and engineering modernization programs. For context, large-scale IT system overhauls or infrastructure upgrades within agencies like the Department of Defense or NASA often run into billions of dollars over similar or longer durations. The FAA's own NextGen program, aimed at modernizing the entire air traffic system, involves significant investments across multiple contracts. When viewed as a per-year cost (roughly $110 million annually), it is comparable to other large, multi-disciplinary engineering support service contracts awarded to major federal contractors, reflecting the specialized expertise and long-term commitment required.
What are the primary risks associated with a decade-long contract for critical national airspace system support?
The primary risks associated with a decade-long contract for critical national airspace system support include technological obsolescence, where the contracted solutions may become outdated before the contract ends; scope creep, where project requirements expand beyond initial estimates, leading to cost overruns; contractor performance degradation over time, potentially due to staff turnover or loss of institutional knowledge; and vendor lock-in, making it difficult to switch providers or adopt new technologies if the incumbent contractor is not adaptable. Additionally, the long duration increases exposure to shifts in government priorities, budget fluctuations, and evolving regulatory landscapes that could impact the project's direction and funding.
How effective is the Cost Plus Award Fee (CPAF) structure in ensuring value for money on this contract?
The Cost Plus Award Fee (CPAF) structure is designed to provide value for money by allowing the government to reimburse the contractor's allowable costs while incentivizing superior performance through award fees. This structure is effective when the government clearly defines performance objectives and metrics, and rigorously evaluates the contractor's achievement against them. For the NISC contract, the FAA must establish clear criteria for engineering and technical support excellence. If these criteria are well-defined and the evaluation process is objective and stringent, CPAF can drive efficiency, innovation, and high-quality outcomes. However, if performance metrics are vague or the evaluation process is weak, it can lead to inflated costs without commensurate performance gains.
What are the historical spending patterns for engineering and technical support services for the NAS?
Historical spending patterns for engineering and technical support services for the National Airspace System (NAS) have consistently been significant, reflecting the continuous need for maintenance, upgrades, and modernization of a complex, safety-critical infrastructure. Prior to the NISC contract, similar support services were likely procured through various contracts, potentially with different prime contractors or through different contracting vehicles. The FAA's overall budget allocation for system modernization and operational support has historically been in the billions of dollars annually. The NISC contract represents a consolidation and continuation of these essential support functions under a single, large-scale award, indicating a sustained and substantial investment trend in NAS engineering and technical services over many years.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 3
Pricing Type: COST PLUS AWARD FEE (R)
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: $1,399,751,400
Exercised Options: $1,102,449,230
Current Obligation: $1,098,901,162
Actual Outlays: $208,500,417
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2010-10-25
Current End Date: 2020-10-12
Potential End Date: 2020-10-12 00:00:00
Last Modified: 2018-05-03
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