Leidos Inc. contract for IT services with HHS/CDC awarded in 2003 for $39.3M, ending in 2008
Contract Overview
Contract Amount: $39,286,337 ($39.3M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Health and Human Services
Start Date: 2003-02-07
End Date: 2008-10-31
Contract Duration: 2,093 days
Daily Burn Rate: $18.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: SELECT AGENT PROGRAM
Place of Performance
Location: ATLANTA, DEKALB County, GEORGIA, 30329
State: Georgia Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $39.3 million to LEIDOS, INC. for work described as: SELECT AGENT PROGRAM Key points: 1. Contract awarded under full and open competition, suggesting a competitive bidding process. 2. The contract type was Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 3. The contract duration was substantial at 2093 days, indicating a long-term need for the services. 4. The North American Industry Classification System (NAICS) code 541519 points to 'Other Computer Related Services', a broad category. 5. The contract was awarded to a single vendor, Leidos, Inc., which was the only bidder. 6. The contract was not set aside for small businesses, nor did it involve subcontracting with small businesses.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging without more specific details on the services rendered and market rates at the time. The Cost Plus Fixed Fee (CPFF) contract type inherently carries risks of cost escalation compared to fixed-price contracts. However, given it was a definitive contract with a single awardee, the pricing structure would have been negotiated. Without comparable contract data for similar IT services from the same period, a precise value-for-money assessment is difficult.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition. However, despite the broad competition, only one bid was received from Leidos, Inc. This could indicate a highly specialized service where few companies possess the capability, or potentially a lack of aggressive outreach to potential bidders. The limited number of bidders, even under an open competition, might have reduced the pressure on pricing.
Taxpayer Impact: While the competition was open, the receipt of only one bid means taxpayers may not have benefited from the full price discovery that multiple competitive offers typically provide.
Public Impact
The Centers for Disease Control and Prevention (CDC) likely benefited from the IT services provided, supporting its public health mission. The contract supported the agency's operational needs through computer-related services. The geographic impact was primarily within the state of Georgia, where the CDC's headquarters are located. The contract supported a workforce involved in IT services, though specific numbers are not detailed.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contracts can incentivize contractors to incur costs, potentially leading to higher final prices than anticipated.
- Only one bid was received despite full and open competition, raising questions about the effectiveness of the solicitation process or market interest.
- The broad NAICS code 'Other Computer Related Services' makes it difficult to assess if the services were highly specialized or standard IT support.
Positive Signals
- The contract was awarded under full and open competition, adhering to principles of broad market access.
- The definitive contract structure suggests a clear agreement on terms and conditions for a defined period.
- The contract was awarded to Leidos, Inc., a known entity in the government contracting space.
Sector Analysis
This contract falls within the Information Technology sector, specifically under 'Other Computer Related Services'. The IT services market for government agencies is vast and competitive, encompassing a wide range of support, development, and maintenance. Contracts like this are crucial for agencies to maintain and upgrade their technological infrastructure to support their core missions. Benchmarking requires comparison to similar IT service contracts awarded by federal agencies during the 2003-2008 timeframe, considering the specific nature of the services provided.
Small Business Impact
This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. Therefore, it did not directly contribute to the small business contracting goals or provide opportunities within the small business ecosystem for this specific award.
Oversight & Accountability
Oversight for this contract would have been managed by the contracting officers and program managers within the Centers for Disease Control and Prevention (CDC) and the Department of Health and Human Services (HHS). Transparency is generally facilitated through contract databases like FPDS. Accountability measures would be tied to the performance clauses within the Cost Plus Fixed Fee agreement. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- HHS IT Services Contracts
- CDC IT Support Contracts
- Cost-Plus-Fixed-Fee IT Contracts
- Definitive Contracts
Risk Flags
- Single Bidder Under Full and Open Competition
- Cost Plus Fixed Fee Contract Type
- Long Contract Duration
Tags
it-services, health-and-human-services, centers-for-disease-control-and-prevention, definitive-contract, cost-plus-fixed-fee, full-and-open-competition, large-contract, georgia, information-technology, computer-related-services
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $39.3 million to LEIDOS, INC.. SELECT AGENT PROGRAM
Who is the contractor on this award?
The obligated recipient is LEIDOS, INC..
Which agency awarded this contract?
Awarding agency: Department of Health and Human Services (Centers for Disease Control and Prevention).
What is the total obligated amount?
The obligated amount is $39.3 million.
What is the period of performance?
Start: 2003-02-07. End: 2008-10-31.
What specific 'Other Computer Related Services' were provided under this contract?
The provided data indicates the NAICS code is 541519, which covers 'Other Computer Related Services'. This is a broad category that can include services such as IT consulting, custom software development, IT support, data processing, and IT project management that do not fit into more specific NAICS codes. Without further documentation or details from the contract award itself, the precise nature of the services rendered by Leidos, Inc. to the CDC remains unspecified. This lack of specificity makes it challenging to benchmark the contract's value against market rates for particular IT functions or to assess its direct impact on the CDC's technological capabilities.
How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for IT services?
The Cost Plus Fixed Fee (CPFF) contract type is characterized by the government reimbursing the contractor for allowable costs plus a fixed fee representing profit. This structure is often used when the scope of work is not well-defined or involves significant uncertainty, making it difficult to estimate costs accurately upfront. Compared to fixed-price contracts, CPFF offers flexibility but carries a higher risk of cost overruns for the government, as the contractor is incentivized to incur costs to cover the base. Conversely, it provides less profit potential for the contractor than some other cost-reimbursement types. For IT services, fixed-price contracts are generally preferred when requirements are stable and well-understood, offering better cost certainty for the government.
What are the implications of only one bid being received under a 'Full and Open Competition' award?
Receiving only one bid under a 'Full and Open Competition' solicitation presents a mixed signal. On one hand, it indicates that the solicitation was publicly advertised, adhering to the principle of broad market access. However, the lack of multiple bids suggests potential issues such as a highly specialized market where few entities possess the required capabilities, insufficient outreach to potential bidders, overly restrictive requirements, or perhaps a lack of perceived value or opportunity by the market. For taxpayers, this can mean a missed opportunity for robust price competition, potentially leading to a less favorable price than could have been achieved with multiple competing offers. It warrants further investigation into the solicitation process and market dynamics.
What was Leidos, Inc.'s track record with the federal government around the time of this award (2003)?
Leidos, Inc. (and its predecessor, Science Applications International Corporation - SAIC, prior to its split) has a long and extensive history as a major federal contractor. Around 2003, SAIC was already a significant player, holding numerous large contracts across various agencies, including defense, intelligence, and civilian sectors, particularly in IT, systems engineering, and support services. Their track record generally involved large-scale, complex projects. The award of this $39.3 million contract by the CDC in 2003 aligns with their established profile as a capable provider of IT services to government entities during that period. Their extensive experience likely contributed to their ability to secure this contract.
How does the $39.3 million total award value compare to typical IT spending by agencies like the CDC?
The $39.3 million total award value for this contract, spread over its approximately 5.7-year duration (2093 days), averages around $6.9 million per year. For a large federal agency like the Centers for Disease Control and Prevention (CDC), which manages extensive public health programs and requires robust IT infrastructure, this figure represents a moderate investment in IT services during the mid-2000s. Federal IT spending has generally trended upwards, and agencies of the CDC's size often manage portfolios of IT contracts ranging from tens to hundreds of millions of dollars annually, covering software, hardware, cybersecurity, and various IT support services. Therefore, this specific contract, while significant, would likely have been one component of the CDC's broader IT budget.
What were the primary risks associated with this specific contract, given its type and duration?
The primary risks associated with this contract, given its Cost Plus Fixed Fee (CPFF) structure and long duration (nearly 6 years), include: 1) Cost Overruns: CPFF contracts inherently carry the risk that actual costs could exceed initial estimates, leading to higher final payouts for the government, especially if oversight is lax. 2) Scope Creep: The extended duration increases the likelihood that requirements may evolve, potentially leading to changes and additional costs if not managed through formal contract modification processes. 3) Performance Issues: Ensuring consistent quality and performance over such a long period can be challenging. 4) Vendor Lock-in: A long-term contract with a single vendor can create dependency, making it difficult to switch providers or adopt new technologies if the incumbent vendor is not proactive. 5) Limited Innovation: A fixed fee might not strongly incentivize the contractor to propose innovative cost-saving solutions throughout the contract life.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services
Product/Service Code: INSTRUMENTS AND LABORATORY EQPT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: 2003N00716
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 10260 CAMPUS POINT DR, SAN DIEGO, CA, 92121
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $425,667,424
Exercised Options: $342,012,227
Current Obligation: $39,286,337
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Timeline
Start Date: 2003-02-07
Current End Date: 2008-10-31
Potential End Date: 2008-10-31 00:00:00
Last Modified: 2024-12-10
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