Leidos Inc. awarded $65.8M for Systems Engineering & Integration Contract II by the Department of Defense
Contract Overview
Contract Amount: $65,760,337 ($65.8M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2020-12-23
End Date: 2023-08-11
Contract Duration: 961 days
Daily Burn Rate: $68.4K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: SYSTEMS ENGINEERING & INTEGRATION CONTRACT II TO 9
Place of Performance
Location: FORT WALTON BEACH, OKALOOSA County, FLORIDA, 32548
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $65.8 million to LEIDOS, INC. for work described as: SYSTEMS ENGINEERING & INTEGRATION CONTRACT II TO 9 Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract is for Research and Development in Physical, Engineering, and Life Sciences, excluding biotechnology. 3. Performance period spans over 961 days, indicating a long-term engagement. 4. The contract type is Cost Plus Fixed Fee, which can incentivize cost control but requires careful oversight. 5. The primary agency is the Department of Defense, with the Department of the Air Force as the specific service. 6. The contract was awarded as a Delivery Order under a larger contract vehicle. 7. The contractor, Leidos, Inc., is a significant player in the federal contracting space.
Value Assessment
Rating: fair
Benchmarking the value of this specific contract is challenging without more detailed cost breakdowns or comparable contract data. The Cost Plus Fixed Fee (CPFF) structure means the final cost is subject to actual expenses plus a predetermined fee, making direct price comparisons difficult. However, the total award amount of $65.8 million over approximately 2.6 years suggests a substantial investment in systems engineering and integration services. Further analysis would require understanding the scope of work and comparing it to similar R&D contracts for systems integration.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded through a full and open competition, indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but this method generally fosters a competitive environment, which can lead to better pricing and innovation. The open competition suggests that the Air Force sought the best possible solution and value from the market.
Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the most cost-effective and technically superior solution for critical systems engineering and integration needs.
Public Impact
The primary beneficiaries are the Department of the Air Force and potentially other Department of Defense entities requiring advanced systems engineering and integration. Services delivered include research and development focused on physical, engineering, and life sciences, crucial for modern defense systems. The geographic impact is likely concentrated within Florida, where the contract is managed or performed. Workforce implications include employment opportunities for engineers, scientists, and technical specialists within Leidos, Inc. and its potential subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contracts require diligent oversight to ensure costs remain reasonable and the fixed fee is justified by the scope of work.
- The broad nature of 'Research and Development in the Physical, Engineering, and Life Sciences' could lead to scope creep if not precisely defined and managed.
- Reliance on a single large contractor like Leidos, Inc. for complex integration tasks may present risks if not managed with robust performance metrics.
Positive Signals
- Awarded through full and open competition, indicating a robust selection process and potential for competitive pricing.
- The long performance period (961 days) suggests a stable, long-term need for these critical services.
- Leidos, Inc. is a well-established government contractor with significant experience in defense and systems integration, implying a degree of reliability.
Sector Analysis
The federal R&D sector, particularly within defense, is characterized by significant investment in advanced technologies and complex systems integration. This contract falls under the NAICS code 541712, which covers research and development in physical, engineering, and life sciences. The market for such services is substantial, with major defense contractors competing for these high-value awards. Benchmarking would involve comparing this contract's value and scope to other large-scale systems engineering and integration efforts within the DoD.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside provision. However, as a large prime contract awarded to Leidos, Inc., there may be opportunities for small businesses to participate as subcontractors, depending on Leidos's subcontracting plan and the specific needs of the project. The absence of a small business set-aside means the primary competition was likely among larger, established firms.
Oversight & Accountability
Oversight for this contract would primarily reside with the Department of the Air Force contracting and program management offices. As a Cost Plus Fixed Fee contract, rigorous financial oversight is crucial to monitor expenditures and ensure the fixed fee aligns with the delivered effort. Transparency is typically managed through contract reporting requirements and performance reviews. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.
Related Government Programs
- Systems Engineering and Technical Assistance (SETA) Contracts
- Defense Research and Development Programs
- Air Force Logistics and Sustainment Contracts
- Information Technology Integration Services
- Advanced Technology Development Contracts
Risk Flags
- Cost Overruns Risk (CPFF)
- Scope Creep Potential (R&D)
- Technological Obsolescence
- Contractor Performance Variability
Tags
department-of-defense, department-of-the-air-force, research-and-development, systems-engineering, integration, cost-plus-fixed-fee, full-and-open-competition, delivery-order, leidos-inc, florida, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $65.8 million to LEIDOS, INC.. SYSTEMS ENGINEERING & INTEGRATION CONTRACT II TO 9
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 $65.8 million.
What is the period of performance?
Start: 2020-12-23. End: 2023-08-11.
What is Leidos, Inc.'s track record with similar Department of Defense systems engineering contracts?
Leidos, Inc. has a substantial track record with the Department of Defense, frequently securing large contracts for systems engineering, integration, and technical support across various military branches. Their portfolio includes work on complex platforms, IT infrastructure, and C4ISR systems. Analyzing their past performance on similar CPFF contracts, particularly those involving R&D for the Air Force, would reveal their ability to manage costs, deliver on technical requirements, and adhere to schedules. Historical data from contract databases and performance reviews (if publicly available) would be key to assessing their reliability and expertise in this domain. Their extensive experience suggests a strong capability, but specific contract performance metrics are essential for a definitive evaluation.
How does the $65.8 million award compare to other R&D contracts for systems engineering and integration within the DoD?
The $65.8 million award for Systems Engineering & Integration Contract II is a significant but not exceptionally large sum within the context of major DoD R&D procurements. Large-scale systems integration and R&D programs can easily run into hundreds of millions or even billions of dollars over their lifecycle. This particular contract, awarded as a delivery order, suggests it might be a component of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. To provide a precise comparison, one would need to identify comparable contracts based on the NAICS code (541712), the specific services (systems engineering and integration), the performing agency (Air Force/DoD), and the contract duration. However, it represents a substantial investment in specialized R&D capabilities.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D services?
The primary risks with a CPFF contract for R&D services revolve around cost control and scope definition. For the government, there's a risk that costs could escalate beyond initial projections, even with a fixed fee, if the contractor is inefficient or if unforeseen technical challenges arise. The contractor bears the risk of cost overruns if actual costs exceed the estimated costs used to determine the fixed fee, but the fee itself is fixed regardless of the final cost. For R&D, defining the scope precisely can be difficult, leading to potential disputes over what is included in the fixed fee versus what might require additional negotiation. Effective oversight is critical to monitor expenditures, validate costs, and ensure the contractor maintains focus on achieving the R&D objectives within the agreed-upon fee structure.
What does the 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)' classification imply for the contract's objectives?
This classification (NAICS 541712) indicates that the contract's objectives are focused on scientific and technical research and experimentation aimed at discovering or interpreting facts, principles, or theories for application to practical problems. Specifically, it covers work in areas like physics, chemistry, mathematics, engineering disciplines (aerospace, electrical, mechanical, etc.), and biological sciences (excluding biotechnology, which has its own NAICS code). For systems engineering and integration, this likely means the contract supports the development of new technologies, the integration of advanced components into larger systems, or the fundamental research underpinning future defense capabilities. The 'except Biotechnology' exclusion means the R&D efforts are not centered on biological processes or organisms for therapeutic or diagnostic purposes.
How does the contract's performance period of 961 days (approx. 2.6 years) influence the assessment of its value and risk?
A performance period of 961 days suggests a medium-to-long-term engagement, which is typical for complex R&D and systems integration projects. This duration allows for in-depth research, development, testing, and integration phases. From a value perspective, a longer period can indicate a sustained need and potentially allow for economies of scale or learning curve efficiencies for the contractor. However, it also increases the risk of technological obsolescence, shifts in strategic priorities, or unforeseen challenges that could impact the project's ultimate success. For the government, a longer contract requires sustained oversight and budget allocation. The value is realized if the project successfully delivers the intended advanced capabilities by its conclusion.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 11951 FREEDOM DR, 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: $119,508,602
Exercised Options: $69,609,609
Current Obligation: $65,760,337
Actual Outlays: $448,615
Subaward Activity
Number of Subawards: 82
Total Subaward Amount: $10,339,800
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA873017D0004
IDV Type: IDC
Timeline
Start Date: 2020-12-23
Current End Date: 2023-08-11
Potential End Date: 2023-08-11 00:00:00
Last Modified: 2023-10-23
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