Leidos Management Systems Designers Inc. awarded $26.7M for IT support services to the IRS

Contract Overview

Contract Amount: $26,666,993 ($26.7M)

Contractor: Leidos Management Systems Designers, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2007-09-01

End Date: 2012-08-28

Contract Duration: 1,823 days

Daily Burn Rate: $14.6K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: TOTAL INFORMATION PROCESSING SUPPORT SER

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20002

State: District of Columbia Government Spending

Plain-Language Summary

Department of the Treasury obligated $26.7 million to LEIDOS MANAGEMENT SYSTEMS DESIGNERS, INC. for work described as: TOTAL INFORMATION PROCESSING SUPPORT SER Key points: 1. Contract value represents a significant investment in IT infrastructure. 2. Competition dynamics for this IT services contract warrant further examination. 3. Performance history and contractor track record are key risk indicators. 4. This contract falls within the broader context of federal IT modernization efforts. 5. The IT services sector is highly competitive, with many established players. 6. The duration of the contract suggests a need for sustained support.

Value Assessment

Rating: fair

The total award of $26.7 million for Computer Systems Design Services over five years appears to be within a reasonable range for large-scale IT support contracts. However, without specific details on the services rendered and the complexity of the systems supported, a precise value-for-money assessment is challenging. Benchmarking against similar contracts for IRS IT support would provide a clearer picture of whether the pricing reflects competitive market rates for the level of expertise and support provided.

Cost Per Unit: N/A

Competition Analysis

Competition Level: unknown

This contract was awarded as a 'COMPETITIVE DELIVERY ORDER,' indicating that it was competed among multiple offerors. The fact that it was competed suggests an effort to obtain competitive pricing and a range of technical solutions. The number of bidders and the specific competition method (e.g., full and open, GSA schedule) would provide more insight into the level of competition achieved.

Taxpayer Impact: A competitive award process generally benefits taxpayers by driving down costs and encouraging innovation, leading to more efficient use of public funds.

Public Impact

Federal taxpayers benefit from the efficient operation of the Internal Revenue Service's IT systems. The contract delivers essential computer systems design and support services. Services are geographically concentrated in the District of Columbia. The contract supports a workforce of IT professionals and system designers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if project scope expands beyond initial estimates.
Reliance on a single contractor for critical IT infrastructure could pose risks.
Ensuring continued alignment with evolving IRS technological needs.

Positive Signals

Competitive award process suggests potential for cost efficiencies.
Contract duration indicates a stable, long-term IT support solution.
Leidos is a large, established government contractor with a significant IT presence.

Sector Analysis

The federal IT services market is a substantial segment of the overall technology industry, with agencies increasingly relying on external contractors for specialized expertise. This contract for computer systems design services fits within the broader trend of federal agencies outsourcing IT functions to manage complex systems and adapt to technological advancements. Comparable spending benchmarks in this sector are often measured by the total IT spending of agencies like the IRS, which can run into billions annually.

Small Business Impact

The contract was not awarded as a small business set-aside, and there is no indication of specific subcontracting requirements for small businesses in the provided data. This suggests that the primary focus was on securing the best overall solution from larger, potentially more specialized, contractors. Further analysis would be needed to determine if small businesses were involved as subcontractors.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the IRS. Accountability measures are embedded in the contract terms, including performance standards and payment schedules. Transparency is generally facilitated through contract databases like FPDS, where award details are publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IRS IT Modernization Programs
Federal Civilian Agency IT Services
Computer Systems Design and Related Services

Risk Flags

Contract Duration
Potential for Scope Creep
Reliance on Single Vendor

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $26.7 million to LEIDOS MANAGEMENT SYSTEMS DESIGNERS, INC.. TOTAL INFORMATION PROCESSING SUPPORT SER

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 $26.7 million.

What is the period of performance?

Start: 2007-09-01. End: 2012-08-28.

What is the track record of Leidos Management Systems Designers, Inc. with the IRS and other federal agencies for similar IT support contracts?

Leidos Management Systems Designers, Inc., a subsidiary of Leidos, has a substantial track record in providing IT and systems engineering services to various federal agencies, including the IRS. Their experience often spans complex system design, integration, and ongoing support. For the IRS specifically, Leidos has been involved in numerous IT-related contracts, often focusing on tax systems modernization, data management, and cybersecurity. Their performance history with the IRS and other agencies can be reviewed through contract databases and agency performance reports. Generally, large contractors like Leidos have a mixed record, with many successful projects but also occasional challenges related to scope, schedule, or cost, which are typical for large-scale government IT endeavors. Detailed performance evaluations for this specific contract would be found in agency CPARS reports.

How does the awarded amount of $26.7 million compare to historical IT spending by the IRS for similar services?

The awarded amount of $26.7 million over approximately five years for computer systems design services represents a significant but not extraordinary investment for an agency like the IRS, which manages vast and complex IT infrastructure. The IRS's total IT budget often runs into the billions of dollars annually, encompassing a wide array of services including system development, maintenance, cybersecurity, and user support. This specific contract's value should be viewed within that larger context. Historical spending on similar IT support and system design contracts by the IRS can vary greatly depending on the specific project's scope, duration, and technological requirements. To provide a precise comparison, one would need to analyze historical data for contracts with similar North American Industry Classification System (NAICS) codes (like 541512) and similar service descriptions awarded by the IRS over the past decade. However, $26.7 million is a substantial sum, indicating a critical or large-scale IT function.

What are the primary risks associated with this contract, and what mitigation strategies are likely in place?

Primary risks associated with this contract include potential scope creep, where the requirements expand beyond the initial agreement, leading to cost overruns and schedule delays. Another risk is vendor lock-in, where the IRS becomes overly dependent on Leidos, potentially limiting future flexibility or competitive options. Technical risks, such as system integration challenges or cybersecurity vulnerabilities, are also inherent in large IT projects. Mitigation strategies likely include robust contract management, clear definition of scope and deliverables, regular performance reviews, and strong cybersecurity protocols. The IRS would also employ change control processes to manage any scope modifications and ensure they are justified and funded appropriately. Performance metrics and service level agreements (SLAs) would be in place to monitor contractor performance and address issues proactively.

How effective is the competitive process for IT services contracts of this nature in ensuring value for taxpayer money?

The competitive process for IT services contracts, when executed effectively, is a crucial mechanism for ensuring value for taxpayer money. By soliciting bids from multiple qualified vendors, agencies can foster price competition, encourage innovation, and select solutions that best meet technical and cost requirements. For a contract like this, a competitive delivery order suggests that multiple companies vied for the work, potentially driving down the price and improving the quality of services offered. However, the effectiveness hinges on the clarity of the solicitation, the fairness of the evaluation criteria, and the level of genuine competition among bidders. If the competition is limited (e.g., few bidders, or bidders with similar offerings), the price discovery mechanism may be less robust. Ultimately, ongoing performance monitoring and contract management are essential to ensure that the value anticipated during the competitive phase is realized throughout the contract's lifecycle.

What is the typical duration and value range for federal contracts providing Computer Systems Design Services (NAICS 541512)?

Federal contracts for Computer Systems Design Services (NAICS 541512) can vary significantly in duration and value, depending on the agency, the complexity of the project, and the specific services required. Durations often range from one to five years, with options for extensions that can extend the total period of performance to ten years or more for very long-term engagements. Contract values can range from tens of thousands of dollars for small, specialized tasks to hundreds of millions or even billions of dollars for large-scale system development, integration, and sustainment programs. The contract awarded to Leidos for $26.7 million over five years falls within the mid-to-large range for a significant IT support and design services contract, reflecting a substantial but not exceptionally large investment within the broader federal IT landscape.

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: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

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: $38,031,912

Exercised Options: $33,225,551

Current Obligation: $26,666,993

Parent Contract

Parent Award PIID: TIRNO06D00013

IDV Type: IDC

Timeline