Leidos Management Systems received over $10.8 million for computer systems design services from the IRS

Contract Overview

Contract Amount: $10,892,940 ($10.9M)

Contractor: Leidos Management Systems Designers, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2007-04-17

End Date: 2014-08-01

Contract Duration: 2,663 days

Daily Burn Rate: $4.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 9

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: TIPSS 3 TASK 2175

Place of Performance

Location: OXON HILL, PRINCE GEORGE'S County, MARYLAND, 20745

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $10.9 million to LEIDOS MANAGEMENT SYSTEMS DESIGNERS, INC. for work described as: TIPSS 3 TASK 2175 Key points: 1. The contract's value of over $10.8 million over its duration suggests a significant investment in IT infrastructure or support. 2. Full and open competition was utilized, indicating a broad market approach to selecting a vendor. 3. The contract duration of approximately 7 years (2663 days) points to a long-term need for the services provided. 4. The Cost Plus Fixed Fee (CPFF) contract type can sometimes lead to cost overruns if not managed carefully. 5. The vendor, Leidos Management Systems, is a large established company, suggesting a capacity for complex IT projects. 6. The specific task order number (TIPSS 3 TASK 2175) implies this is part of a larger IT services umbrella agreement.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the services rendered. However, a $10.8 million contract over nearly 7 years for computer systems design services, awarded through full and open competition, suggests a moderate level of investment. The CPFF structure warrants scrutiny for potential cost efficiencies compared to fixed-price contracts, though it allows for flexibility in evolving IT landscapes. Without comparable contract data for similar IRS IT projects, a definitive 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, meaning all responsible sources were permitted to submit a bid. The presence of 9 bidders indicates a healthy level of competition for this particular IT services requirement. This broad competition is generally favorable for price discovery and ensures the government has a wide pool of potential contractors to choose from, potentially leading to better pricing and service offerings.

Taxpayer Impact: The robust competition for this contract suggests that taxpayer dollars were likely used efficiently, as multiple vendors vied to offer their best terms and pricing.

Public Impact

The Internal Revenue Service (IRS) benefits from enhanced computer systems design and support, crucial for its tax administration functions. Taxpayers indirectly benefit from improved IT infrastructure that supports efficient tax processing and data management. The contract likely supports IT professionals and technical staff within the contractor organization, contributing to employment in the IT sector. The geographic impact is primarily within the operational scope of the IRS, which is national, though specific service delivery locations are not detailed.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Fixed Fee (CPFF) contract type can incentivize contractors to incur higher costs to achieve a higher fee, potentially impacting overall expenditure if not closely monitored.
The long duration of the contract (nearly 7 years) increases the risk of technological obsolescence or scope creep if not actively managed.
Lack of specific performance metrics or deliverables in the provided data makes it difficult to assess the contractor's performance objectively.

Positive Signals

Awarded through full and open competition with 9 bidders, indicating a competitive environment that likely drove favorable terms.
The contractor, Leidos Management Systems, is a well-established entity with significant experience in government IT services, suggesting a lower risk of contractor failure.
The contract is part of the TIPSS 3 program, which may imply adherence to established IT service management frameworks and quality standards.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, a critical component of the broader Information Technology industry. This sector encompasses a wide range of services, including IT consulting, systems integration, and custom software development. The market for government IT services is substantial, with agencies like the IRS being major consumers due to the complexity and scale of their operations. Comparable spending benchmarks would typically involve analyzing IT modernization and support contracts awarded to large system integrators by federal agencies.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large contract awarded through full and open competition, it is unlikely to have significant direct subcontracting opportunities specifically mandated for small businesses, although the prime contractor may engage small businesses as part of their overall supply chain strategy. The primary beneficiaries of this contract are likely larger IT service providers.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the IRS. The CPFF structure necessitates diligent financial oversight to ensure costs are reasonable and allocable. Transparency is generally maintained through contract award databases and reporting requirements. Specific Inspector General (IG) jurisdiction would depend on the nature of any potential fraud, waste, or abuse identified within the contract's execution.

Related Government Programs

TIPSS 3 (Treasury Information Processing Support Services)
IRS IT Modernization Efforts
Federal Civilian Agency IT Services Contracts
Computer Systems Design Services

Risk Flags

Cost Plus Fixed Fee contract type requires careful monitoring for cost escalation.
Long contract duration may pose risks of technological obsolescence.
Specific performance metrics not detailed, hindering objective performance assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $10.9 million to LEIDOS MANAGEMENT SYSTEMS DESIGNERS, INC.. TIPSS 3 TASK 2175

Who is the contractor on this award?

The obligated recipient is LEIDOS MANAGEMENT SYSTEMS DESIGNERS, INC..

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Internal Revenue Service).

What is the total obligated amount?

The obligated amount is $10.9 million.

What is the period of performance?

Start: 2007-04-17. End: 2014-08-01.

What specific computer systems design services were provided under this contract?

The provided data identifies the North American Industry Classification System (NAICS) code as 541512, which corresponds to Computer Systems Design Services. This broad category typically includes designing and developing systems, integrating hardware and software, and providing IT consulting. However, without access to the contract's statement of work (SOW) or task orders, the precise services rendered under TIPSS 3 TASK 2175 remain unspecified. These could range from network architecture design, software development lifecycle support, cybersecurity integration, to cloud migration planning and implementation for the IRS's complex tax processing and data management systems.

How does the $10.8 million contract value compare to similar IRS IT contracts awarded around the same period?

Comparing the $10.8 million value requires context regarding the specific IT services and duration. Awarded in 2007 and ending in 2014, this contract spanned approximately seven years. For that period, $10.8 million for a comprehensive computer systems design task order under a larger IT services vehicle like TIPSS 3 is a moderate investment. Larger IT modernization programs or enterprise-wide system implementations for agencies like the IRS could easily run into tens or hundreds of millions of dollars. However, without knowing if this was a niche support task or a broader system development effort, a direct comparison is difficult. It represents a significant, but not exceptionally large, expenditure for IT services within a major federal agency.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this nature?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is that the contractor is reimbursed for all allowable costs plus a predetermined fixed fee. This structure can incentivize the contractor to incur higher costs, as their fee is fixed regardless of the total cost incurred. This contrasts with fixed-price contracts where the contractor bears more risk for cost overruns. For the government, the risk is that costs could escalate beyond initial projections, potentially making the contract less cost-effective than anticipated. Effective oversight, detailed cost accounting, and clear definition of allowable costs are crucial to mitigate these risks and ensure value for money.

What was the track record of Leidos Management Systems, Inc. with the federal government prior to or during this contract?

Leidos Management Systems, Inc. (and its predecessor entities like Lockheed Martin's IT business, which Leidos acquired) has a long and extensive history of contracting with the U.S. federal government across numerous agencies. Prior to and during the 2007-2014 period of this specific IRS contract, Leidos was a major federal IT contractor. They have consistently held large, complex contracts involving systems integration, IT services, cybersecurity, and mission support. Their track record generally includes experience with large-scale projects, though like any major contractor, they would have faced performance reviews and potential challenges on specific contracts. Their established presence suggests a capacity to manage significant government IT requirements.

How did the number of bidders (9) influence the pricing and potential value for the government?

Having nine bidders for this contract, awarded under full and open competition, is a positive indicator for price discovery and value for the government. A larger number of bidders generally increases competition, pressuring each vendor to offer more competitive pricing and better terms to win the contract. This scenario reduces the likelihood of a single vendor dominating the market and dictating terms. The government benefits from a wider range of solutions and potentially lower overall costs compared to a situation with fewer bidders. The presence of multiple qualified bidders suggests that the market was sufficiently robust to support this level of competition for the specified IT services.

What is the significance of this contract being part of the TIPSS 3 program?

This contract, TIPSS 3 TASK 2175, being part of the Treasury Information Processing Support Services (TIPSS) 3 program signifies that it was likely awarded under a broader Indefinite Delivery/Indefinite Quantity (IDIQ) or similar master contract vehicle. TIPSS programs are designed to streamline the procurement of IT services for the Department of the Treasury and its bureaus, including the IRS. Being part of TIPSS 3 suggests that the contract structure, terms, and conditions were pre-negotiated and vetted, potentially offering efficiencies in acquisition. It also implies that Leidos was an approved vendor under this umbrella agreement, having already met certain qualifications, and that this task order represented a specific call for services within that established framework.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 9

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 2677 PROSPERITY AVE., SUITE 700, FAIRFAX, VA, 11

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $13,719,074

Exercised Options: $13,719,074

Current Obligation: $10,892,940

Parent Contract

Parent Award PIID: TIRNO06D00013

IDV Type: IDC

Timeline