Leidos awarded $46M contract for MUUV System Design & TDP, with potential for significant growth

Contract Overview

Contract Amount: $45,969,429 ($46.0M)

Contractor: Leidos, Inc.

Awarding Agency: Department of Defense

Start Date: 2022-06-30

End Date: 2027-07-07

Contract Duration: 1,833 days

Daily Burn Rate: $25.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: MUUV SYSTEM DESIGN & TDP

Place of Performance

Location: LYNNWOOD, SNOHOMISH County, WASHINGTON, 98087

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $46.0 million to LEIDOS, INC. for work described as: MUUV SYSTEM DESIGN & TDP Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Incentive Fee, which can incentivize cost control but also carries inherent risk. 3. The contract duration is 5 years, indicating a long-term commitment to the MUUV system. 4. The awardee, Leidos, Inc., is a major defense contractor with a significant presence in the sector. 5. The contract is for system design and technical data package, a critical early-stage development phase. 6. The base award is $45.9M, with potential for growth based on performance incentives.

Value Assessment

Rating: good

The contract's value of $45.9M for system design and TDP appears reasonable for a multi-year defense system development effort. Benchmarking against similar system design contracts is challenging without more specific technical details. However, the Cost Plus Incentive Fee structure allows for potential cost savings to be shared, which can be a positive indicator of value if managed effectively. The contract's duration suggests a substantial scope of work, and the final cost will depend on performance against incentive targets.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The presence of four bidders (no) suggests a healthy level of competition for this requirement. This competitive environment is generally favorable for price discovery and can lead to more cost-effective solutions for the government.

Taxpayer Impact: A competitive award process helps ensure that taxpayer dollars are used efficiently by driving down costs and encouraging innovative solutions from multiple offerors.

Public Impact

The Department of the Navy benefits from the development of the MUUV System, likely enhancing its operational capabilities. The contract supports the design and creation of a technical data package, crucial for future production and sustainment. The geographic impact is primarily within the United States, supporting defense innovation and development. The contract will likely involve a specialized workforce of engineers, designers, and technical writers within Leidos and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Positive Signals

Sector Analysis

The defense sector, particularly naval systems development, is characterized by long procurement cycles and significant R&D investment. This contract for system design and TDP fits within the broader shipbuilding and repairing NAICS code (336611), but specifically targets the initial design phase of a new system. Comparable spending benchmarks for system design contracts vary widely based on complexity, but multi-year efforts for advanced platforms often run into tens or hundreds of millions of dollars.

Small Business Impact

There is no indication of a small business set-aside for this contract, nor is there explicit information on subcontracting plans for small businesses. Given the prime contractor is Leidos, Inc., a large defense firm, it is possible that subcontracting opportunities may exist. However, without specific set-aside goals or reporting, the direct impact on the small business ecosystem is unclear.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. The Cost Plus Incentive Fee structure necessitates close monitoring of costs and performance against defined metrics. Transparency will depend on the reporting requirements stipulated in the contract and the Navy's commitment to public disclosure of contract performance data. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Risk Flags

Tags

defense, department-of-the-navy, leidos-inc, definitive-contract, cost-plus-incentive-fee, full-and-open-competition, system-design, technical-data-package, ship-building-and-repairing, washington, unmanned-systems

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $46.0 million to LEIDOS, INC.. MUUV SYSTEM DESIGN & TDP

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 Navy).

What is the total obligated amount?

The obligated amount is $46.0 million.

What is the period of performance?

Start: 2022-06-30. End: 2027-07-07.

What is the historical performance of Leidos, Inc. on similar Cost Plus Incentive Fee contracts with the Department of Defense?

Leidos, Inc. has a substantial history of performing on Cost Plus Incentive Fee (CPIF) contracts with the Department of Defense across various platforms and systems. Analyzing their past performance on CPIF contracts would involve reviewing contract award data, performance evaluations (such as Contractor Performance Assessment Reporting System - CPARS), and any documented instances of cost overruns or underruns relative to target costs. Generally, CPIF contracts aim to align contractor and government interests by sharing savings or cost increases against a target cost. Leidos's ability to consistently meet or exceed performance targets while managing costs within acceptable ranges on similar contracts would be a key indicator of their capability for this MUUV system contract. Specific data on their historical CPIF performance, including average profit margins and cost variance percentages, would provide a more precise assessment.

How does the awarded amount of $45.9M compare to the estimated cost for similar system design and TDP contracts in the defense sector?

Comparing the $45.9M award for the MUUV System Design & TDP to similar contracts requires careful consideration of the system's complexity, scope, and technological maturity. System design and Technical Data Package (TDP) development can vary significantly in cost. For complex naval systems or platforms, initial design phases can indeed reach tens of millions of dollars, especially if they involve novel technologies or extensive simulation and modeling. However, without specific details on the MUUV system's requirements, scale, and the depth of the TDP, a precise benchmark is difficult. If the MUUV system is a relatively straightforward enhancement or a component of a larger platform, $45.9M might be on the higher end. Conversely, for a completely new, advanced unmanned system, this figure could represent a competitive price. Benchmarking would ideally involve analyzing TDP development costs for comparable unmanned systems or naval platform subsystems awarded under similar competitive conditions.

What are the key performance metrics and incentive targets associated with this Cost Plus Incentive Fee contract?

The specific key performance metrics (KPMs) and incentive targets for this MUUV System Design & TDP contract are not publicly detailed in the provided data. However, for a CPIF contract focused on system design and TDP, typical KPMs could include adherence to design specifications, achievement of performance requirements (e.g., speed, range, payload capacity for an unmanned system), timely delivery of design milestones, quality and completeness of the Technical Data Package, and successful integration testing. Incentive targets would be directly tied to these KPMs, potentially offering increased profit margins for exceeding targets (e.g., achieving superior performance metrics, delivering ahead of schedule, or demonstrating significant cost savings below target cost) and reduced profit for failing to meet minimum requirements. The government and Leidos would have negotiated these specific targets and their associated fee adjustments.

What is the potential total value of this contract, considering the incentive fee structure and potential for future modifications or options?

The provided data indicates a base award of $45,969,428.87 for the MUUV System Design & TDP. As this is a Cost Plus Incentive Fee (CPIF) contract, the final cost will likely deviate from this base amount based on performance. The 'incentive' aspect means that the contractor (Leidos, Inc.) could earn a higher fee (profit) if they exceed certain performance targets or achieve cost efficiencies, or a lower fee if they fall short. Furthermore, the contract duration extends to July 2027, suggesting that this initial award may cover a significant portion of the design and TDP development, but it does not explicitly state if there are options for follow-on production or sustainment phases. Therefore, the total value could potentially increase substantially if options are exercised or if subsequent contracts for production are awarded based on this design.

What are the primary risks associated with the 'Ship Building and Repairing' NAICS code (336611) and how might they apply to this system design contract?

The 'Ship Building and Repairing' NAICS code (336611) encompasses a range of activities, from new vessel construction to maintenance and modernization. Primary risks in this sector often include long production lead times, complex integration of numerous systems, potential for design changes during production, supply chain disruptions for specialized components, and stringent quality control requirements. For a system design and TDP contract like this MUUV system, the risks are more front-loaded. Key risks include the inherent uncertainty in designing novel systems, the challenge of accurately estimating costs and schedules for complex R&D efforts, potential for scope creep if requirements evolve, and the difficulty in ensuring the TDP is comprehensive and accurate enough for future manufacturing. Integration risks are also present, as the MUUV system must eventually interface with larger naval platforms. The CPIF structure attempts to mitigate some cost risks by incentivizing efficiency, but technical risks remain significant.

Industry Classification

NAICS: ManufacturingShip and Boat BuildingShip Building and Repairing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0002420R6301

Offers Received: 4

Pricing Type: COST PLUS INCENTIVE FEE (V)

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: $370,090,881

Exercised Options: $58,767,187

Current Obligation: $45,969,429

Subaward Activity

Number of Subawards: 14

Total Subaward Amount: $9,162,182

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline

Start Date: 2022-06-30

Current End Date: 2027-07-07

Potential End Date: 2027-07-07 00:00:00

Last Modified: 2025-08-21

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