GSA's $19M IT contract for electronic key management services awarded to Leidos, Inc. shows potential value concerns

Contract Overview

Contract Amount: $18,981,017 ($19.0M)

Contractor: Leidos, Inc.

Awarding Agency: General Services Administration

Start Date: 2005-09-01

End Date: 2009-08-31

Contract Duration: 1,460 days

Daily Burn Rate: $13.0K/day

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: CLASSIFIED TIER3 ELECTRONIC KEY MANAGEMENT SYSTEM

Place of Performance

Location: SAN ANTONIO, BEXAR County, TEXAS, 78201

State: Texas Government Spending

Plain-Language Summary

General Services Administration obligated $19.0 million to LEIDOS, INC. for work described as: CLASSIFIED TIER3 ELECTRONIC KEY MANAGEMENT SYSTEM Key points: 1. The contract's duration and time-and-materials pricing structure may lead to cost overruns. 2. Limited competition was noted, with only two bidders participating in the award process. 3. The contractor, Leidos, Inc., has a substantial presence in the federal IT sector. 4. Performance context is limited due to the nature of the service provided. 5. This contract falls within the IT sector, specifically focusing on computer facilities management. 6. The contract was awarded in Texas, indicating a specific geographic focus for service delivery.

Value Assessment

Rating: fair

The contract's total value of $18.98 million over four years, utilizing a Time and Materials (T&M) pricing model, warrants scrutiny. T&M contracts can be prone to cost escalation if not closely managed, as the final price is directly tied to the hours worked and materials used. Benchmarking against similar IT facilities management contracts is challenging without more granular data on labor categories and material costs. However, the lack of a fixed ceiling or more defined scope could suggest a less cost-certain arrangement compared to firm-fixed-price contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under a limited competition, with only two bids received. While the specific reasons for limited competition are not detailed, it suggests that the pool of qualified bidders may have been restricted, or the solicitation process did not encourage broader participation. A limited competition can sometimes result in higher prices for the government compared to a full and open competition, as the vendor faces less pressure to offer the most competitive bid.

Taxpayer Impact: The limited number of bidders may have resulted in taxpayers paying a premium, as the government had fewer options to drive down costs through robust price competition.

Public Impact

The primary beneficiary of this contract is the General Services Administration (GSA), which receives electronic key management system services. The services delivered are crucial for secure access and management of electronic keys within federal facilities. The contract has a geographic impact primarily in Texas, where the services are performed. Workforce implications include the employment of IT professionals and support staff by Leidos, Inc. to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Positive Signals

Sector Analysis

This contract falls within the broader Information Technology (IT) sector, specifically under the Computer Facilities Management Services NAICS code (541513). This sub-sector involves the management and operation of computer systems and related facilities for others. The federal IT market is vast, with significant spending on infrastructure, software, and services. Comparable spending benchmarks for electronic key management systems are difficult to pinpoint due to their specialized nature, but overall IT services spending by the GSA is substantial, often in the billions annually.

Small Business Impact

The contract data indicates that small business participation was not a primary focus, as the contract was not set aside for small businesses (ss: false) and the awardee, Leidos, Inc., is a large corporation. There is no explicit information regarding subcontracting plans for small businesses. This suggests that the primary benefits of this contract will likely accrue to large businesses, with limited direct impact on the small business IT ecosystem unless Leidos actively engages small business subcontractors.

Oversight & Accountability

Oversight for this contract would primarily fall under the purview of the General Services Administration (GSA), specifically the Federal Acquisition Service. The contract's Time and Materials nature necessitates diligent monitoring of labor hours and material costs to ensure compliance and prevent overcharging. Transparency is facilitated through contract databases like FPDS, but detailed operational oversight and accountability measures are internal to the agency and contractor. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Risk Flags

Tags

it, general-services-administration, texas, time-and-materials, large-contract, limited-competition, computer-facilities-management-services, electronic-key-management-system, leidos-inc

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $19.0 million to LEIDOS, INC.. CLASSIFIED TIER3 ELECTRONIC KEY MANAGEMENT SYSTEM

Who is the contractor on this award?

The obligated recipient is LEIDOS, INC..

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $19.0 million.

What is the period of performance?

Start: 2005-09-01. End: 2009-08-31.

What is the track record of Leidos, Inc. in delivering similar electronic key management systems to the federal government?

Leidos, Inc. is a major federal contractor with extensive experience across various IT services, including cybersecurity and infrastructure management. While specific details on their performance for electronic key management systems under this particular contract (awarded in 2005) are not publicly detailed in this summary, the company's broad portfolio suggests a capacity to handle such requirements. Historical data from contract databases would be needed to assess their performance trends, on-time delivery rates, and any past performance issues or commendations related to similar systems. Their significant presence in the federal IT market indicates a general familiarity with government contracting requirements and security protocols.

How does the $18.98 million cost compare to similar federal contracts for electronic key management systems?

Directly comparing the $18.98 million cost to similar federal contracts for electronic key management systems is challenging without more specific details on the scope of services, duration, and the exact technologies deployed. This contract, awarded in 2005 and ending in 2009, utilized a Time and Materials (T&M) pricing model over 1460 days. T&M contracts inherently have variable costs. To benchmark effectively, one would need to identify contracts with comparable service levels, security requirements, and geographic coverage, ideally awarded around the same period or more recently, and analyze their total contract values and pricing structures (e.g., fixed-price vs. T&M). The limited competition also suggests potential for less favorable pricing.

What are the primary risks associated with this Time and Materials contract, and how were they mitigated?

The primary risk associated with this Time and Materials (T&M) contract is the potential for cost escalation due to undefined labor hours and material usage, leading to budget overruns. Without a firm ceiling or detailed scope, the contractor has less incentive to control costs. Mitigation strategies typically involve robust oversight, including detailed review of timesheets, verification of material costs, and strict adherence to pre-negotiated labor rates. The government contracting officer must actively manage the contract, ensuring that all hours billed are necessary and reasonable for the work performed. The limited competition also adds a layer of risk regarding price competitiveness.

What was the effectiveness of the competition process in ensuring value for taxpayers?

The effectiveness of the competition process in ensuring value for taxpayers appears questionable given that this contract was awarded under limited competition with only two bidders. A robust, full and open competition typically yields the best value by exposing the government to a wider range of offers and fostering price reductions through competitive pressure. With only two bidders, the government's negotiating leverage is reduced, potentially leading to higher prices than might be achieved in a more crowded field. The specific details of the solicitation and evaluation process would be needed to fully assess if the chosen contractor offered the best value under the circumstances, but the limited pool inherently raises concerns.

How has federal spending on electronic key management systems evolved since this contract was awarded in 2005?

Federal spending on electronic key management systems has likely evolved significantly since this contract was awarded in 2005. Advancements in technology, including cloud-based solutions, biometrics, and integrated access control systems, have likely shifted the landscape. Furthermore, increased emphasis on cybersecurity and data protection post-9/11 and subsequent cyber threats may have driven higher spending and more sophisticated requirements. While this specific contract represented $18.98 million over four years, overall federal IT spending, including security and access management, has grown substantially. Analyzing current contract awards for similar services would reveal trends in technology adoption, pricing models, and overall investment levels in this domain.

Industry Classification

NAICS: Professional, Scientific, and Technical ServicesComputer Systems Design and Related ServicesComputer Facilities Management Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONSADP AND TELECOMMUNICATIONS

Contractor Details

Parent Company: Leidos Holdings, Inc. (UEI: 611641312)

Address: 10302 EATON PLACE, SUITE 150, FAIRFAX, VA, 11

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $18,981,017

Exercised Options: $18,981,017

Current Obligation: $18,981,017

Parent Contract

Parent Award PIID: GS07T00BGD0028

IDV Type: GWAC

Timeline

Start Date: 2005-09-01

Current End Date: 2009-08-31

Potential End Date: 2009-08-31 00:00:00

Last Modified: 2012-05-07

More Contracts from Leidos, Inc.

View all Leidos, Inc. federal contracts →

Other General Services Administration Contracts

View all General Services Administration contracts →

Explore Related Government Spending