DoD's $84.5M Energetics R&D Contract with Leidos Faces Scrutiny Over Value and Competition
Contract Overview
Contract Amount: $84,455,594 ($84.5M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2020-06-01
End Date: 2025-05-31
Contract Duration: 1,825 days
Daily Burn Rate: $46.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: ENERGETICS RESEARCH AND DEVELOPMENT
Place of Performance
Location: PICATINNY ARSENAL, MORRIS County, NEW JERSEY, 07806
Plain-Language Summary
Department of Defense obligated $84.5 million to LEIDOS, INC. for work described as: ENERGETICS RESEARCH AND DEVELOPMENT Key points: 1. The contract's value of $84.5M for R&D in physical sciences warrants close examination for cost-effectiveness. 2. Leidos, Inc. is the sole awardee, raising questions about the extent of competition achieved. 3. The Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not managed tightly. 4. This spending falls within the broad R&D sector, specifically physical and engineering sciences.
Value Assessment
Rating: questionable
The $84.5M award for R&D is substantial. Without detailed cost breakdowns and performance metrics, it's difficult to benchmark against similar contracts. The CPFF structure necessitates rigorous oversight to ensure value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Although advertised as full and open, the award to a single entity, Leidos, Inc., suggests limited actual competition or a highly specialized requirement. Price discovery may have been impacted by the CPFF structure.
Taxpayer Impact: Taxpayer funds are being allocated for advanced research. Ensuring cost efficiency and achieving desired R&D outcomes are critical for maximizing the return on this investment.
Public Impact
Advanced research in energetics could lead to significant technological advancements for national security. The long contract duration (5 years) suggests a sustained need for these research capabilities. Geographic location in New Jersey may impact local economic development and workforce opportunities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns due to CPFF contract type.
- Limited demonstrated competition despite 'full and open' designation.
- Lack of clear performance metrics for R&D success.
Positive Signals
- Addresses a critical R&D need for the Department of the Air Force.
- Awarded to a known entity with relevant expertise.
- Long-term contract provides stability for research efforts.
Sector Analysis
This contract supports research and development in physical, engineering, and life sciences, excluding specialized areas like nanotechnology. Spending benchmarks for similar R&D contracts vary widely based on scope and complexity.
Small Business Impact
The contract data indicates no specific set-aside for small businesses. Larger prime contractors like Leidos, Inc. may subcontract, but direct opportunities for small businesses are not explicitly detailed.
Oversight & Accountability
The CPFF contract type requires robust oversight from the Department of the Air Force to manage costs and ensure deliverables align with research objectives. Regular performance reviews and audits are essential.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Cost Overruns Risk (CPFF)
- Limited Competition Concerns
- Lack of Measurable R&D Outcomes
- Potential for Scope Creep
- Sole Awardee Dependency
Tags
research-and-development-in-the-physical, department-of-defense, nj, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $84.5 million to LEIDOS, INC.. ENERGETICS RESEARCH AND DEVELOPMENT
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 Air Force).
What is the total obligated amount?
The obligated amount is $84.5 million.
What is the period of performance?
Start: 2020-06-01. End: 2025-05-31.
How effectively will the CPFF structure incentivize Leidos, Inc. to control costs while achieving groundbreaking R&D results?
The CPFF structure shifts cost risk to the government, potentially leading to higher overall expenditures if not meticulously managed. Incentives for cost control are typically built into the fixed fee component and require strong government oversight, performance metrics, and regular audits to ensure value for money. Without clear performance benchmarks and proactive cost management, there's a risk of inflated costs.
What specific factors limited the competition to Leidos, Inc. despite the 'full and open' solicitation, and how does this impact price discovery?
Limited competition despite a 'full and open' solicitation could stem from highly specialized technical requirements, unique intellectual property, or the specific expertise possessed by Leidos, Inc. This lack of robust competition may reduce pressure on the contractor to offer the most competitive pricing, potentially leading to a higher price than if multiple bidders vied for the contract. Price discovery is thus less robust.
What are the key performance indicators (KPIs) for this R&D contract, and how will their achievement be measured to ensure taxpayer value?
Key performance indicators for R&D contracts are often qualitative and tied to milestones, successful experiments, prototypes, or publications. Measuring achievement requires clear, objective criteria defined in the contract. The Department of the Air Force must establish rigorous review processes to assess progress against these KPIs, ensuring that the research is advancing as intended and delivering tangible value for the significant investment.
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: RESEARCH AND DEVELOPMENT › OTHER RESEARCH/DEVELOPMENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 2
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 1750 PRESIDENTS ST, RESTON, VA, 20190
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $89,681,929
Exercised Options: $89,681,929
Current Obligation: $84,455,594
Actual Outlays: $13,028,477
Subaward Activity
Number of Subawards: 125
Total Subaward Amount: $66,654,462
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA807518D0009
IDV Type: IDC
Timeline
Start Date: 2020-06-01
Current End Date: 2025-05-31
Potential End Date: 2025-05-31 00:00:00
Last Modified: 2025-05-20
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