DoD's $14.4M IT services contract awarded to General Dynamics Information Technology Inc. shows potential value concerns

Contract Overview

Contract Amount: $14,367,521 ($14.4M)

Contractor: General Dynamics Information Technology Inc.

Awarding Agency: Department of Defense

Start Date: 2008-09-29

End Date: 2011-09-28

Contract Duration: 1,094 days

Daily Burn Rate: $13.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: SOFTWARE ENGINEERING CENTER BELVOIR INFORMATION TECHNOLOGY SERVICES AND SUPPOR

Place of Performance

Location: EATONTOWN, MONMOUTH County, NEW JERSEY, 07724

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $14.4 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY INC. for work described as: SOFTWARE ENGINEERING CENTER BELVOIR INFORMATION TECHNOLOGY SERVICES AND SUPPOR Key points: 1. The contract's value appears high relative to its duration and scope, warranting further scrutiny. 2. Competition was full and open, suggesting a potentially competitive pricing environment. 3. The contract utilized a Time and Materials pricing structure, which can sometimes lead to cost overruns. 4. Performance was for IT services supporting the Army, a common but critical function. 5. The contractor, General Dynamics Information Technology Inc., is a large, established entity in the federal IT space. 6. The contract was a delivery order, indicating it was part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle.

Value Assessment

Rating: fair

The total award amount of $14.4 million over approximately three years suggests an average annual spend of around $4.8 million. Without specific details on the services rendered, it's difficult to benchmark precisely. However, for IT services, this rate could be reasonable or high depending on the complexity and criticality of the support provided. The Time and Materials (T&M) pricing model, while flexible, carries inherent risks of cost escalation if not managed diligently. Comparing this to similar IT support contracts for the Army or other DoD branches would be crucial for a definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bids suggests a moderate level of competition for this specific delivery order. While full and open competition is generally preferred for maximizing price discovery and ensuring fair market value, the low number of bidders could suggest potential limitations in the market for these specific services or a lack of aggressive bidding.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it theoretically drives down prices through market forces. However, with only two bids received, the realized savings for taxpayers may not have been as substantial as in scenarios with more robust competition.

Public Impact

The primary beneficiary of this contract is the Department of the Army, receiving essential IT services. The services delivered likely include IT support, maintenance, and potentially system development or integration. The geographic impact is likely concentrated around the Army installations or commands supported by the Software Engineering Center Belvoir. Workforce implications include the employment of IT professionals by General Dynamics Information Technology Inc. to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Time and Materials (T&M) pricing structure can lead to unpredictable costs if not closely monitored.
A low number of bids (2) in a full and open competition may indicate limited market interest or specialized requirements that restrict potential bidders.
The contract duration of approximately three years, while standard, requires ongoing performance monitoring to ensure continued value.

Positive Signals

Awarded under full and open competition, which generally promotes fair pricing.
The contractor, General Dynamics Information Technology Inc., is a reputable and experienced provider of federal IT services.
The contract supports critical IT functions for the Department of the Army.

Sector Analysis

This contract falls within the broader Information Technology (IT) services sector, a significant area of federal spending. The market for IT services is vast and highly competitive, encompassing everything from basic help desk support to complex software development and cybersecurity. Federal agencies, particularly the Department of Defense, are major consumers of these services. Benchmarking this contract's value would involve comparing its per-diem or hourly rates against industry standards for similar IT support roles and comparing the total contract value against the duration and scope of services provided for comparable DoD IT contracts.

Small Business Impact

This contract does not appear to have been specifically set aside for small businesses, as indicated by the large prime contractor and the absence of small business set-aside flags. General Dynamics Information Technology Inc. is a large business. While large prime contractors are often encouraged or required to subcontract portions of their work to small businesses, the extent to which this occurred under this specific contract is not detailed in the provided data. The impact on the small business ecosystem would depend on the subcontracting plan, if any, and its execution.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contracting officer's representative (COR) within the Department of the Army. Accountability measures would include performance reviews, adherence to contract terms, and delivery of services as specified. Transparency is generally facilitated through contract award databases like FPDS-NG (where this data originates). Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Army IT Support Services
Department of Defense Information Technology Contracts
General Dynamics IT Contracts
Software Engineering Center Contracts
IT Services Indefinite Delivery/Indefinite Quantity (IDIQ) Vehicles

Risk Flags

Potential for cost overruns due to T&M pricing
Limited competition (2 bidders) despite full and open award

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.4 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY INC.. SOFTWARE ENGINEERING CENTER BELVOIR INFORMATION TECHNOLOGY SERVICES AND SUPPOR

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS INFORMATION TECHNOLOGY INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $14.4 million.

What is the period of performance?

Start: 2008-09-29. End: 2011-09-28.

What specific IT services were provided under this contract, and how did their complexity influence the pricing?

The provided data does not detail the specific IT services rendered beyond the general description of 'INFORMATION TECHNOLOGY SERVICES AND SUPPOR' for the 'SOFTWARE ENGINEERING CENTER BELVOIR'. These services could range from basic help desk and network support to more complex system administration, software maintenance, or specialized engineering. The complexity and criticality of these services are key determinants of fair pricing. For instance, support for mission-critical systems requiring highly specialized skills would command higher rates than standard end-user support. Without a detailed statement of work (SOW), a precise assessment of whether the $14.4 million award was justified by the services' complexity is challenging. Benchmarking against contracts with similar SOWs would be necessary for a more accurate evaluation.

How does the Time and Materials (T&M) pricing structure compare to other contract types for similar IT services?

Time and Materials (T&M) contracts are often used when the scope of work is not clearly defined or is expected to change, offering flexibility. However, they carry a higher risk of cost overruns for the government compared to fixed-price contracts because the contractor is reimbursed for direct labor hours and materials used, plus a fixed fee or time-based rate. For IT services where requirements are well-understood, fixed-price or cost-plus-fixed-fee contracts might offer better cost control and predictability for the government. The T&M structure here suggests that either the scope was fluid, or the agency opted for flexibility over strict cost certainty. Agencies typically prefer T&M for sustainment or undefined support tasks, but it requires robust oversight to manage costs effectively.

What is the typical spending range for IT services contracts of similar duration and scope within the Department of the Army?

The average annual spending for this contract was approximately $4.8 million ($14.4M / 3 years). Within the Department of the Army, IT services spending can vary dramatically based on the specific function, location, and technology involved. Contracts for large-scale system modernization or enterprise-wide support can run into tens or hundreds of millions of dollars annually. Conversely, smaller, localized IT support contracts might be in the hundreds of thousands. An average of $4.8 million per year for IT services supporting a specific center like the Software Engineering Center Belvoir falls within a plausible range, but its 'value for money' depends heavily on the specific deliverables and service levels achieved, which are not detailed here. Comparisons with other Army IT support contracts of similar duration and complexity are essential.

What does the contractor's past performance record indicate regarding their ability to deliver IT services effectively?

General Dynamics Information Technology Inc. (GDIT) is a major federal contractor with extensive experience in providing IT services across various government agencies, including the Department of Defense. Their track record generally includes large, complex projects. While specific performance metrics for this particular contract are not provided, GDIT's overall history suggests a capability to handle significant IT support requirements. However, like any large contractor, they may have had past performance issues on specific contracts. A comprehensive review would involve examining past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS) for GDIT, particularly for similar Army IT services contracts, to identify any recurring issues or consistent successes.

Were there any significant cost underruns or overruns associated with this contract, and why?

The provided data shows the total award amount ($14,367,521.27) and the period of performance (September 29, 2008, to September 28, 2011). Without data on the actual amount obligated or expended versus the total award, it's impossible to determine if there were significant cost underruns or overruns. The Time and Materials (T&M) pricing structure inherently allows for cost fluctuations based on labor hours and material costs incurred. If the contract was well-managed with strong oversight, actual spending might have stayed close to the award amount. Conversely, if scope creep occurred or efficiencies were not realized, costs could have exceeded expectations, potentially reaching the ceiling of the award amount. Further investigation into the contract's financial execution would be needed.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Csra LLC (UEI: 079735371)

Address: 3170 FAIRVIEW PARK DR, FALLS CHURCH, VA, 22042

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $20,392,040

Exercised Options: $14,367,521

Current Obligation: $14,367,521

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15P7T06DE404

IDV Type: IDC

Timeline