Agriculture's $1.21B Financial Management Modernization contract awarded to CGI Federal Inc

Contract Overview

Contract Amount: $1,210,839 ($1.2M)

Contractor: CGI Federal Inc.

Awarding Agency: Department of Agriculture

Start Date: 2025-04-07

End Date: 2026-07-06

Contract Duration: 455 days

Daily Burn Rate: $2.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: SPECIALIZED BUSINESS ANALYSIS AND FINANCIAL MANAGEMENT EXPERTISE (FINANCIAL MANAGEMENT MODERNIZATION INITIATIVE PROTRACTS

Place of Performance

Location: FAIRFAX, FAIRFAX County, VIRGINIA, 22033

State: Virginia Government Spending

Plain-Language Summary

Department of Agriculture obligated $1.2 million to CGI FEDERAL INC. for work described as: SPECIALIZED BUSINESS ANALYSIS AND FINANCIAL MANAGEMENT EXPERTISE (FINANCIAL MANAGEMENT MODERNIZATION INITIATIVE PROTRACTS Key points: 1. Contract aims to modernize financial management systems, potentially improving efficiency and data accuracy. 2. Awarded under full and open competition, suggesting a competitive bidding process. 3. The contract's duration of 455 days indicates a focused, short-term modernization effort. 4. Fixed-price contract type may offer cost certainty for the government. 5. The North American Industry Classification System (NAICS) code 541519 suggests a focus on IT services. 6. No small business set-aside was utilized, indicating the primary award went to a large business. 7. The contract is a delivery order, likely part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle.

Value Assessment

Rating: good

The total award amount of $1.21 billion for financial management modernization expertise is substantial. Benchmarking this against similar large-scale IT modernization efforts within federal agencies is challenging without more specific details on the scope of services. However, the firm fixed-price nature of the contract provides a degree of cost control. The value proposition hinges on the successful modernization of the Department of Agriculture's financial systems, which could lead to significant long-term cost savings and improved operational efficiency.

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 data does not specify the number of bidders, but this procurement method generally fosters a competitive environment, which can lead to better pricing and service offerings for the government. The agency sought proposals from a wide range of qualified contractors.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down costs through market forces and encourages innovation among bidders, ensuring the government receives the best value for its investment.

Public Impact

The primary beneficiaries are the Department of Agriculture's financial operations, aiming for enhanced efficiency and accuracy. Services delivered include specialized business analysis and financial management expertise for modernization. The geographic impact is primarily within the Department of Agriculture's national operations, with potential implications for its various agencies. Workforce implications may include the need for specialized IT and financial management personnel within the agency to support and integrate the modernized systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The substantial value of the contract raises questions about the potential for cost overruns if scope creep occurs.
Lack of specific details on performance metrics makes it difficult to assess the contractor's track record for similar large-scale modernization projects.
The duration of the contract (455 days) might be insufficient for a complete, deep modernization of complex financial systems, potentially leading to phased or incomplete implementation.

Positive Signals

Awarded under full and open competition, suggesting a robust and fair bidding process.
Firm fixed-price contract type provides cost certainty and limits the government's exposure to cost increases.
The contract is for specialized business analysis and financial management expertise, indicating a focus on critical modernization needs.
The contractor, CGI Federal Inc., is a known entity in the federal IT services space, suggesting potential familiarity with government requirements.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on financial management modernization. The market for government IT modernization is vast, with agencies continually seeking to update legacy systems to improve efficiency, security, and data analytics capabilities. Comparable spending benchmarks would involve looking at other large-scale financial system overhauls across federal agencies, which often run into hundreds of millions or billions of dollars depending on the agency's size and complexity.

Small Business Impact

This contract was not awarded as a small business set-aside, and the data indicates no subcontracting goals were specified (sb: false). This suggests that the primary contract was awarded to a large business, CGI Federal Inc. While there are no explicit requirements for small business participation noted, large federal contractors often engage small businesses for specialized services or as part of their broader subcontracting strategies. The impact on the small business ecosystem will depend on whether CGI Federal Inc. voluntarily includes small businesses in its supply chain for this project.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Agriculture's Office of the Chief Financial Officer, which is the contracting activity. Accountability measures will be defined within the contract's statement of work and performance standards. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected in the execution of this contract.

Related Government Programs

Financial Management Modernization Initiatives
Federal IT Modernization Programs
Department of Agriculture IT Contracts
Financial Systems Modernization
IT Professional Services Contracts

Risk Flags

Potential for scope creep given the large contract value.
Risk of integration challenges with existing legacy systems.
Dependence on contractor performance for critical modernization goals.
Cybersecurity vulnerabilities in modernized financial systems.
User adoption and training challenges post-implementation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $1.2 million to CGI FEDERAL INC.. SPECIALIZED BUSINESS ANALYSIS AND FINANCIAL MANAGEMENT EXPERTISE (FINANCIAL MANAGEMENT MODERNIZATION INITIATIVE PROTRACTS

Who is the contractor on this award?

The obligated recipient is CGI FEDERAL INC..

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Office of the Chief Financial Officer).

What is the total obligated amount?

The obligated amount is $1.2 million.

What is the period of performance?

Start: 2025-04-07. End: 2026-07-06.

What is CGI Federal Inc.'s track record with large-scale financial system modernization contracts for federal agencies?

CGI Federal Inc. has a significant history of providing IT and business solutions to government agencies, including financial management systems. They have been involved in modernization efforts for various departments, often focusing on enterprise resource planning (ERP) and financial management systems. For instance, they have supported agencies like the Department of Veterans Affairs and the Department of Defense in similar capacities. Assessing their specific track record for *this type* of large-scale, multi-billion dollar modernization requires a deeper dive into past performance evaluations and contract close-outs for comparable projects. While their general experience is extensive, the success of this particular contract will depend on their ability to deliver on the specific requirements and complexities of the Department of Agriculture's financial infrastructure within the defined timeline and budget.

How does the $1.21 billion award compare to typical spending on financial management modernization projects in the federal government?

The $1.21 billion award for financial management modernization expertise is substantial and falls within the upper range for major federal IT modernization projects. Large-scale financial system overhauls, especially for agencies as complex as the Department of Agriculture, often require significant investment. For context, other agencies have undertaken similar multi-year modernization efforts that have also reached or exceeded the billion-dollar mark. Factors influencing this cost include the scope of modernization (e.g., replacing core financial systems, integrating disparate systems, enhancing data analytics), the number of users, the complexity of existing infrastructure, and the duration of the contract. This award suggests a comprehensive approach to modernizing the USDA's financial operations.

What are the primary risks associated with a contract of this magnitude and scope?

Contracts of this magnitude carry several inherent risks. A primary risk is scope creep, where the project's requirements expand beyond the initial agreement, leading to cost overruns and schedule delays. Another significant risk is the potential for technical challenges in integrating new systems with legacy infrastructure, which can be complex and time-consuming. Contractor performance is also a risk; failure to deliver on time or meet performance standards could jeopardize the modernization goals. Furthermore, cybersecurity threats are a constant concern for any IT system, especially those handling sensitive financial data. Finally, ensuring adequate user adoption and training for the modernized systems is crucial for realizing the intended benefits and avoiding operational disruptions.

What are the expected program effectiveness outcomes from this contract?

The expected outcomes from this contract are centered around enhancing the Department of Agriculture's financial management capabilities. This includes improving the accuracy, timeliness, and completeness of financial data, which is critical for effective decision-making and accountability. Modernization is expected to streamline financial processes, reduce manual workarounds, and increase operational efficiency, potentially leading to cost savings in the long run. Enhanced data analytics capabilities could provide deeper insights into financial performance, enabling better resource allocation and strategic planning. Ultimately, the program aims to establish a more robust, secure, and modern financial infrastructure that supports the agency's mission.

What are historical spending patterns for financial management modernization at the Department of Agriculture?

Historical spending patterns for financial management modernization at the Department of Agriculture are not detailed in the provided data. However, federal agencies, including the USDA, have consistently invested in modernizing their financial systems over the years. These investments are often driven by mandates for improved financial reporting (e.g., Federal Financial Management Improvement Act), the need to replace aging infrastructure, and the desire to leverage new technologies for greater efficiency and data insights. Past spending would likely reflect a series of projects, potentially including upgrades to specific modules, integration efforts, or phased replacements of core financial systems. The current $1.21 billion award suggests a significant, potentially comprehensive, modernization initiative that may encompass or supersede previous efforts.

What is the significance of the contract being a 'Delivery Order'?

The designation of this award as a 'Delivery Order' (aw: DELIVERY ORDER) is significant because it implies that this contract is a task order issued under a larger, pre-existing Indefinite-Delivery/Indefinite-Quantity (IDIQ) contract or a similar type of multiple-award contract. IDIQ vehicles are established to streamline the procurement process for services that are expected to be needed over a period of time but where the exact quantity or timing is not precisely known at the outset. This means that the 'full and open competition' likely occurred when the parent IDIQ contract was awarded. This specific delivery order represents a defined scope of work, a set price (firm fixed price), and a specific performance period (2025-04-07 to 2026-07-06) for a portion of the services available under the broader IDIQ.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 12314425Q0072

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Timken Company

Address: 12601 FAIR LAKES CIR # 100, FAIRFAX, VA, 22033

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

Financial Breakdown

Contract Ceiling: $1,210,839

Exercised Options: $1,210,839

Current Obligation: $1,210,839

Actual Outlays: $727,138

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS35F281DA

IDV Type: FSS

Timeline