Supplier and Small Business Relationships
We are united with our suppliers and small businesses to make a difference in the world.
About our Supply Chain
Maintaining strong and committed relationships with approximately 12,000 suppliers, as well as continuing our award-winning small businesses advocacy programs, is essential to our mission of providing outstanding support to our customers. Our diverse customer base, requirements for services, and need for varied materials require us to work with suppliers both large and small who can offer capabilities and unique solutions while providing the best value.
As a company specializing in IT, Science and Engineering solutions, Leidos has a diverse supply chain that varies based on the types of contracts we are able to win from local, state, and federal government entities. Our major commodity areas consist of engineering services, IT hardware, software, communications technology, and transportation. We strive to source from local and domestic suppliers whenever possible, with roughly 47% of our $4.5 billion in sourcing expenses going to US-based small businesses. We are also committed to sourcing from veteran-owned firms, realizing the value they deliver to our customers, our company, and the country at large. Helping veteran-owned firms succeed and grow advances our goal of helping veterans transition successfully to the civilian workforce.
Our downstream products consist predominately of services rendered to U.S. government entities within the areas of defense and intelligence, civil services and infrastructure, healthcare, and cyber services. Our physical products tend to come in the form of defense solutions, IT hardware, and infrastructure for civil projects.
Supply Chain Management Approach
It is the mission of Leidos’ Strategic Sourcing program to utilize our robust mix of people, leadership practices and tools to enhance the value for Leidos customers while keeping Leidos competitive in the marketplace. Our sourcing practices allow our programs to drive and deliver innovative solutions and services that matter most for meeting tomorrow’s demands. Our Strategic Sourcing program enables us to find the right products and services at the right price, all while ensuring that our suppliers meet our ethical standards. Our supplier expectations with regards to sustainability, social responsibility, and ethics are outlined on our supplier portal and at leidos.com/suppliers, and are included in our standard contract terms and conditions.
The following Sustainability & Social Responsibility language is sent to all suppliers:
Leidos is committed to advancing Global Citizenship in all aspects of our business, including our procurement activities. We understand the potential effects our procurement decisions have both on the environment and in our communities, and we support operating in a socially and environmentally responsible manner including the protection of internationally proclaimed human rights. Principles of sustainability are woven into the fabric of Leidos culture through our mission, vision, and corporate values. We are committed to a management approach that protects the environment by avoiding, mitigating, and remediating negative impacts of our operations.
We expect our suppliers to comply with all local environmental, health, and safety regulations and encourage them to join us in protecting the environment by informing us of environmentally preferable product offerings, using processes, materials, and transportation methods that support sustainability of the environment throughout the supply chain (e.g., applying energy-efficient, environmentally friendly technologies to reduce waste, and emissions to air, water, and soil). Further, we expect our suppliers to not engage in the discrimination of employees or discriminate in the selection of lower-tier suppliers on the basis of sex, race, color, age, religion, creed, sexual orientation, national origin or citizenship, ancestry, disability, marital status, gender identity, military or veteran status, or any other basis protected by law.
Abiding by the highest standards of business ethics is an essential component of all of our supplier relationships. Leidos maintains a Defense Contract Management Agency (DCMA) approved purchasing system and adheres to the Federal Acquisition Regulation (FAR) when purchasing direct-charge, non-commercial items or services. Supplier compliance is mandated with certain regulations and laws, including clauses that address:
- Cancellation, Rescission, and Recovery of Funds for Illegal or Improper Activity
- Price or Fee Adjustment for Illegal or Improper Activity
- Whistleblower Protections Under the American Recovery and Reinvestment Act of 2009
- Utilization of Small Business Concerns
- Notice to the Government of Labor Disputes
- Equal Opportunity (Only Paragraphs (b)(1) through (c)(11)
- Combating Trafficking in Persons
- Hazardous Material Identification and Material Safety Data
- Contractor Policy to Ban Text Messaging While Driving
- Conflict Minerals Policy
Leidos is regularly solicited by our customers to complete supplier questionnaires. These questionnaires are part of supply chain sustainability programs that our customers are operating in an effort to improve their own sustainability. By complying, we provide valuable information on our environmental performance, but also a wide range of sustainability areas, including human rights, fair labor practices and health and safety issues.
Our supplier selection criteria are based on specific customer requirements, with an emphasis on suppliers that offer strategic and competitive pricing, quality products and services, focus on continuous improvement and commitment to performance in delivery of goods or services.
Our suppliers are reminded of our commitment to conduct business with uncompromising integrity. This commitment is clearly established in the Code of Conduct and our International Anti-Bribery and Anti-Corruption Policy. Leidos requires suppliers to conduct themselves in a manner consistent with the principles of our Code of Conduct and in accordance with our International Anti-Bribery and Anti-Corruption Policy. In addition, we strongly encourage our suppliers to establish proactive and meaningful ethics and compliance programs within their organizations. We want our suppliers to understand, foster, and mirror the ethical conduct we expect from our employees in all business transactions.
Strategic Sourcing Initiatives
As part of efforts to continually improve our ability to manage and leverage our spend, we have enhanced our Strategic Sourcing program. The goal of the Strategic Sourcing program is to actively manage Leidos’ 3rd party spend, maintain collaborative supplier relationships, identify and expand supplier segmentation, and strategically source business requirements. Over the past year, Leidos Strategic Sourcing has placed an emphasis on assisting Corporate Functions and Line Organizations within the company to better leverage competition to improve our spend, enhancing our partnerships with suppliers of key materials to increase visibility and drive value, and formalizing a program to promote emerging technologies through Venture Capital partnerships. These initiatives help us maintain our supplier diversity, improve accountability within our supply chain, stay on top of industry trends, and drive value for our customers.
These initiatives also complement our goals of supporting various categories of small business. However, due to the nature of our business, we are not able to restrict our sourcing needs to local supplies and vendors. We continue to work closely with small businesses as part of our ongoing and award-winning mentor-protégé program, which we view as an integral part of our small business development strategy.
Leidos has a proud history of providing maximum opportunities for small businesses to engage with us as we support our customers in the defense, intelligence, homeland security, civil, and health markets.
We work closely with all categories of small businesses, including small disadvantaged, women-owned, veteran-owned, service-disabled veteran-owned and historically underutilized business zone (HUBZone) companies, as well as historically black colleges and universities and minority institutions (HBCU/MIs). We continue to exceed the statutory goals for small disadvantaged, women-owned and service-disabled veteran-owned small businesses, as we believe that our success is strengthened by our legacy of commitment to small business engagement.
During government fiscal year 2017, Leidos awarded over $1.4 billion in contracts to small businesses and our Small Business Program currently holds a rating of "Highly Successful" by the Defense Contract Management Agency (DCMA). These statistics illustrate the importance of small businesses to Leidos success, customer success and the dedication of Leidos Small Business Development Program to promoting strategic teaming with a variety of small businesses.
Leidos small business approach has three main areas of focus:
- Performing proactive marketing and outreach activities through our Small Business Development Program
- Fostering strategic relationships with small businesses that lead to subcontracting and prime contracting opportunities
- Providing training and business development assistance to small businesses - particularly minority-, women- and veteran-owned small businesses - to help them acquire the tools to grow and succeed.
Leidos has been recognized for well over a decade for its outstanding efforts and work with small businesses of all categories. Notable recognition in recent years includes well over 30 awards that include prestigious Small Business Administration (SBA) awards such as: the Dwight D. Eisenhower Award and the Frances B. Perkins Award; DoD's Nunn-Perry Awards for outstanding mentor-protégé performance; and NASA's Large Business Prime Contractor of the Year Award by NASA Small Business Programs, Marshall Space Flight Center award. Please see the list below for additional Leidos awards and recognitions.
|Eisenhower Award||Small Business Administration (SBA)||2011, 2007, 2001||Recognition of Leidos' excellence in working with small businesses.|
|Small Business Partner||Small and Emerging Contractors Advisory Forum (SECAF)||2011||Recognizing Leidos as a Small Business Partner of the year over $100 million in revenues.|
|Nunn-Perry Mentor-Protégé Award||Department of Defense (DoD)||2014, 2012, 2011, 2008, 2007*, 2006*, 2004*, 2003, 2002, 2000, 1999, and 1997
*In 2004, 2006 and 2007, Leidos was a multiple award winner recognized for outstanding performance under two separate agreements.
|Recognition of Leidos' exemplary performance in mentor/protégé arrangements under DoD program.|
|Frances Perkins Vanguard Award||Small Business Administration (SBA)||2010, 2004, 2002||Recognition of Leidos' commitment to working with women-owned small businesses.|
|Mentor-Protégé Team of the Year Award||Department of Homeland Security (DHS)||2010||Recognition of Leidos' exemplary performance in mentor-protégé arrangements under the DHS program.|
|Corporate Achievement Award||Department of Veterans Affairs Center for Veteran Enterprise||2008, 2007||Recognition of Leidos' exemplary performance in exceeding subcontracting goals for Service-Disabled Veteran-Owned Businesses.|
|Best Corporations for Veteran-Owned Businesses||Veteran Business Journal||2010, 2008, 2007, 2006, 2005||Recognition of Leidos' exemplary performance in working with veteran and service-disabled veteran-owned small businesses.|
|Champions of Veterans Enterprise Award||National Veteran Small Business Coalition (NVSBC)||2014, 2013, 2012, 2011||Honored 25 companies for exemplary commitment to working with veteran-owned SB’s. Leidos exceeded the 3% mandated subcontracting goal for service-disabled veteran-owned small businesses.|
|Best Corporations for Veteran-Owned Businesses||National Veteran-Owned Business Associations (NaVOBA)||2014, 2012, 2010, 2008, 2007, 2006, 2005||Recognition of Leidos’ commitment in working with veteran-owned small businesses.|
|Large Business Prime Contractor of the Year||NASA Goddard Space Flight Center||2008||Recognition for significant contributions to NASA's small business program.|
|Large Business Prime Contractor of the Year||NASA Marshall Space Flight Center||2012, 2011, 2008||Recognition for significant contributions to NASA's small business program.|
|White House Initiative for HBCUs Corporate Honoree||Department of Education||2007||Recognition of Leidos's exemplary performance in working with HBCUs.|
|Certificate of Achievement||Department of State||2006||Recognition of Leidos' accomplishments of small business goals during Government Fiscal Year 2005.|
|Certificate of Achievement||Department of Justice||2006||Recognition of Leidos' accomplishments of small business goals during Government Fiscal Year 2005.|
|Distinguished Supplier Diversity Award||Department of Commerce||2003||Recognition of Leidos' support of the Minority Business Development Agency's objectives.|
|Parren J. Mitchell Award for Minority Business Development||Minority Business & Professionals Network (MBPN)||2000||Award was presented to George Otchere for leadership in Minority business development in the Nation.|
Leidos participates in a variety of outreach programs that provide opportunities to introduce to small businesses in every socio-economic category. We host numerous small business events at our facilities to bring in small businesses interested in teaming opportunities as well as specific subcontracting opportunities. These “matchmaking” forums have been extremely successful, with Leidos business developers, program managers, and procurement personnel meeting with small businesses to receive capability briefings and discuss active opportunities.
Similarly, Leidos holds similar events for specific major programs and proposals. We frequently participate in industry and customer small business events that enable small businesses to find out about opportunities with Leidos. Over the years, we have participated in numerous events and forums sponsored by various federal agencies, including the Department of Defense, the SBA, and industry associations such as the National Defense Industrial Associate (NDIA), Armed Forces Electronics Association (AFCEA) and others.
Leidos was one of the first contractors to be selected for DoD's pilot Mentor-Protégé Program in 1991. Since that time, Leidos formally mentored nearly 100 small businesses and is one of the most active participants in the federal agency program, including maintaining mentor-protégé agreements with agencies such as the Department of Army and the National Geospatial-Intelligence Agency (NGA). At a minimum, Leidos provides the following to all protégés:
- Training and Assistance: Training and direct assistance in program management, human resources, contract administration, and finance. Assistance in creating and printing marketing material, development and implementation of marketing strategies, implementation of disciplined bid/no-bid processes, and proposal training.
- Technology Transfer and Certifications: Transfer of state-of-the art products/service improvement processes that support the customer. Facilitation of training unique to the protégé's needs. Assistance to some protégés in obtaining key technical certifications (e.g., ISO 9000 and SEI-CMMI certification).
- Business Development: Joint marketing, preferred subcontracting status on current and future Leidos prime contracts, and introduction to new customers and markets.
In addition to formal agreements, Leidos informally mentors many small businesses by providing assistance in the areas of joint marketing, task order response, human resources (HR), technology transfer, and administrative efforts. This approach helps develop our small business teammates while ensuring the highest levels of technical and programmatic performance.
Veteran-Owned Small Businesses
Leidos is an active supporter and sponsor of numerous veteran targeted events, which is not surprising considering more than 20% of Leidos' employees are veterans themselves. Leidos maintains a program aimed at enhancing the growth of Veteran-Owned Small Businesses (VOSBs) of all types in the government contracting arena through cooperative efforts with veteran advocacy bodies.