Leidos Inc. awarded $137M for maintenance and technology support, raising questions on competition and value
Contract Overview
Contract Amount: $137,084,236 ($137.1M)
Contractor: Leidos Inc
Awarding Agency: Department of Homeland Security
Start Date: 2011-09-30
End Date: 2017-03-03
Contract Duration: 1,981 days
Daily Burn Rate: $69.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: MAINTENANCE AND TECHNOLOGY SUPPORT SERVICES
Place of Performance
Location: LORTON, FAIRFAX County, VIRGINIA, 22079
State: Virginia Government Spending
Plain-Language Summary
Department of Homeland Security obligated $137.1 million to LEIDOS INC for work described as: MAINTENANCE AND TECHNOLOGY SUPPORT SERVICES Key points: 1. Contract awarded to a single vendor without open competition, potentially limiting price discovery. 2. Significant contract duration of 1981 days suggests a long-term need for these services. 3. The fixed-price contract type may offer cost certainty but could limit flexibility for evolving needs. 4. The primary agency is DHS, with specific work for U.S. Customs and Border Protection. 5. The North American Industry Classification System (NAICS) code 334511 points to specialized system manufacturing. 6. The contract's value is substantial, warranting scrutiny of its cost-effectiveness over its lifespan.
Value Assessment
Rating: questionable
Benchmarking the value of this $137 million contract is challenging without comparable sole-source procurements for similar maintenance and technology support services. The fixed-price nature suggests an attempt to control costs, but the lack of competition means there's no direct market comparison to assess if the pricing is truly competitive. Without a competitive bidding process, it's difficult to ascertain if taxpayers received the best possible value for the services rendered over the contract's extended duration.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities or when urgency dictates a direct award. The lack of competition means that potential cost savings that could arise from a bidding process were not realized, and it limits the government's ability to explore alternative solutions or pricing structures.
Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This limits the government's leverage in negotiating favorable terms.
Public Impact
U.S. Customs and Border Protection benefits from continuous maintenance and technology support for critical systems. The services likely ensure the operational readiness of search, detection, navigation, and guidance systems used by CBP. The geographic impact is primarily within the United States, supporting border security operations. The contract supports a specialized segment of the technology and manufacturing workforce.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may lead to inflated prices.
- Sole-source award raises concerns about potential vendor lock-in and limited future flexibility.
- Extended contract duration without competitive re-evaluation could mask inefficiencies.
Positive Signals
- Fixed-price contract offers cost predictability for the government.
- Award to a known entity (Leidos Inc.) may indicate a reliance on established expertise for critical systems.
Sector Analysis
This contract falls within the broader Information Technology and Defense Industrial Base sectors, specifically related to specialized systems manufacturing and support. The NAICS code 334511 covers establishments primarily engaged in manufacturing instruments for measuring, detecting, and controlling industrial process variables, as well as manufacturing navigational, measuring, electromedical, and control instruments. Spending in this area is critical for national security and operational efficiency, but often involves complex, high-value procurements.
Small Business Impact
There is no indication that this contract involved small business set-asides or subcontracting plans. As a sole-source award to a large prime contractor, it is unlikely to have directly benefited small businesses through set-aside provisions. The impact on the small business ecosystem would be indirect, potentially through Leidos Inc.'s own subcontracting choices, which are not detailed here.
Oversight & Accountability
Oversight mechanisms for this contract would typically involve contract officers, program managers within DHS, and potentially the Inspector General's office for audits and investigations. Transparency is limited due to the sole-source nature and lack of public competition details. Accountability rests with the contracting agency to ensure performance and adherence to contract terms.
Related Government Programs
- Department of Homeland Security IT Services
- CBP Technology Modernization
- Defense System Maintenance Contracts
- Sole-Source Technology Procurements
Risk Flags
- Sole-source award
- Lack of competition
- Extended contract duration
- Potential for vendor lock-in
Tags
dhs, cbp, leidos-inc, sole-source, definitive-contract, firm-fixed-price, maintenance-and-support, technology-services, search-detection-navigation-guidance-aeronautical-nautical-system-and-instrument-manufacturing, virginia, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Homeland Security awarded $137.1 million to LEIDOS INC. MAINTENANCE AND TECHNOLOGY SUPPORT SERVICES
Who is the contractor on this award?
The obligated recipient is LEIDOS INC.
Which agency awarded this contract?
Awarding agency: Department of Homeland Security (U.S. Customs and Border Protection).
What is the total obligated amount?
The obligated amount is $137.1 million.
What is the period of performance?
Start: 2011-09-30. End: 2017-03-03.
What specific technologies or systems are covered under this 'maintenance and technology support services' contract?
The provided data indicates the contract falls under NAICS code 334511, which relates to 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing.' This suggests the services likely pertain to the upkeep, repair, and potentially upgrade of sophisticated equipment used by U.S. Customs and Border Protection (CBP) for border surveillance, interdiction, and operational command. Examples could include radar systems, sensor arrays, communication equipment, or integrated command and control platforms essential for border security operations. Without more specific contract line item details, the exact systems remain generalized but are clearly tied to critical CBP functions.
Why was this contract awarded on a sole-source basis instead of being competed?
Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. For this contract, potential justifications could include unique proprietary technology held by Leidos Inc., highly specialized expertise required for the maintenance of specific CBP systems that only Leidos possesses, or a critical need where the time required for a competitive procurement would be detrimental to national security or operational effectiveness. The specific justification would have been documented by the Department of Homeland Security at the time of the award, often citing reasons like urgency, lack of alternatives, or the existence of a patent or data rights.
How does the $137 million contract value compare to similar support services for border security technology?
Directly comparing the $137 million value is difficult without access to a comprehensive database of sole-source contracts for similar, highly specialized systems maintenance within the federal government. However, for large-scale technology support and maintenance contracts, especially those involving critical national security infrastructure like border security, such figures are not uncommon. The extended duration (1981 days, approximately 5.4 years) spreads this cost over a significant period. The lack of competition prevents a direct 'apples-to-apples' value assessment against market alternatives, but the amount signifies a substantial investment in maintaining the operational readiness of key CBP technological assets.
What is Leidos Inc.'s track record with the Department of Homeland Security and CBP?
Leidos Inc. is a major government contractor with a significant history of serving various federal agencies, including the Department of Homeland Security (DHS) and its components like U.S. Customs and Border Protection (CBP). They have been involved in numerous large-scale contracts related to IT services, systems integration, logistics, and mission support. Their extensive experience suggests a deep understanding of DHS/CBP requirements and operational environments. However, the specific performance history on this particular sole-source contract, especially regarding adherence to schedule, budget, and technical specifications, would require a deeper dive into performance evaluations and past performance reviews.
What are the potential risks associated with a long-term, sole-source contract for technology support?
Long-term, sole-source contracts carry several inherent risks. Firstly, the lack of competition can lead to complacency and potentially higher costs over time, as the contractor faces less pressure to innovate or offer competitive pricing. Secondly, the government may become 'locked in' to a specific vendor and technology, making it difficult and costly to switch providers or adopt newer, potentially more effective solutions in the future. Thirdly, without regular competitive re-evaluation, there's a risk that the services provided may not keep pace with technological advancements or evolving agency needs, potentially leading to operational inefficiencies or security vulnerabilities.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Product/Service Code: MAINT/REPAIR SHOP EQPT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: HSBP1011R0061
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc. (UEI: 611641312)
Address: 2895 SCOTT ST, VISTA, CA, 92081
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $234,470,982
Exercised Options: $143,415,703
Current Obligation: $137,084,236
Subaward Activity
Number of Subawards: 63
Total Subaward Amount: $8,639,207
Contract Characteristics
Commercial Item: SUPPLIES OR SERVICES PURSUANT TO FAR 12.102(F)
Cost or Pricing Data: NO
Timeline
Start Date: 2011-09-30
Current End Date: 2017-03-03
Potential End Date: 2017-03-03 13:10:28
Last Modified: 2017-06-16
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