Commerce awards $160M cloud support contract to General Dynamics, emphasizing agile methodologies

Contract Overview

Contract Amount: $159,695,916 ($159.7M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Commerce

Start Date: 2021-09-27

End Date: 2026-09-30

Contract Duration: 1,829 days

Daily Burn Rate: $87.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: CONTRACT TO ACQUIRE EFFICIENT AND COST EFFECTIVE ENTERPRISE CLOUD SUPPORT SERVICES UTILIZING AGILE/DEVOPS METHODOLOGIES

Place of Performance

Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22042

State: Virginia Government Spending

Plain-Language Summary

Department of Commerce obligated $159.7 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: CONTRACT TO ACQUIRE EFFICIENT AND COST EFFECTIVE ENTERPRISE CLOUD SUPPORT SERVICES UTILIZING AGILE/DEVOPS METHODOLOGIES Key points: 1. Contract aims for cost-effective enterprise cloud support using agile/DevOps. 2. Full and open competition suggests a competitive bidding process. 3. Delivery order structure implies flexibility in service needs. 4. Contract duration of 5 years indicates a long-term strategic need. 5. Focus on cloud services aligns with modern IT infrastructure trends. 6. Potential for performance-based metrics to drive efficiency.

Value Assessment

Rating: good

The contract value of approximately $160 million over five years for enterprise cloud support services appears reasonable given the scope. Benchmarking against similar large-scale cloud service contracts is challenging without more specific service details. However, the use of agile and DevOps methodologies suggests a focus on efficient delivery, which can lead to better value over time compared to traditional waterfall approaches. The pricing structure, likely time and materials, requires careful monitoring to ensure cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 7 bidders suggests a healthy level of competition for this significant cloud support requirement. This broad competition is generally favorable for price discovery and ensures the government can select from a range of qualified providers.

Taxpayer Impact: A competitive award process like this typically results in better pricing for taxpayers by driving down costs through market forces.

Public Impact

Benefits the U.S. Patent and Trademark Office by enhancing its cloud infrastructure. Delivers essential enterprise cloud support services. Services are primarily located in Virginia. Impacts the IT workforce through the need for skilled cloud and agile professionals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and materials pricing can lead to cost overruns if not closely managed.
The complexity of enterprise cloud environments presents inherent performance risks.
Dependence on a single contractor for critical cloud infrastructure requires robust oversight.

Positive Signals

Emphasis on agile and DevOps methodologies promotes efficiency and adaptability.
Full and open competition suggests a strong market response and potential for innovation.
Long-term contract duration allows for strategic planning and relationship building.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, a significant segment of the IT industry focused on providing expertise in designing, developing, and implementing IT solutions. The market for enterprise cloud services is rapidly growing, driven by government and commercial entities seeking to modernize their infrastructure, improve scalability, and reduce operational costs. This contract represents a substantial investment in cloud capabilities for a key government agency.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. This suggests that the primary award went to a large business, and the impact on the small business ecosystem will depend on whether the prime contractor engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight will likely be managed by the U.S. Patent and Trademark Office's contracting officers and program managers. Accountability measures would typically be embedded in the contract's performance work statement and service level agreements. Transparency is generally facilitated through contract award databases, though detailed performance metrics may not be publicly disclosed.

Related Government Programs

General Services Administration (GSA) IT Schedule Contracts
Cloud Computing Services
Enterprise IT Modernization Programs
Department of Commerce IT Spending

Risk Flags

Potential for cost overruns due to T&M pricing model.
Complexity of enterprise cloud environments poses performance risks.
Ensuring effective agile/DevOps implementation requires skilled personnel and mature processes.
Dependence on a single contractor for critical infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $159.7 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. CONTRACT TO ACQUIRE EFFICIENT AND COST EFFECTIVE ENTERPRISE CLOUD SUPPORT SERVICES UTILIZING AGILE/DEVOPS METHODOLOGIES

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 Commerce (U.S. Patent and Trademark Office).

What is the total obligated amount?

The obligated amount is $159.7 million.

What is the period of performance?

Start: 2021-09-27. End: 2026-09-30.

What is the historical spending pattern for enterprise cloud support services at the U.S. Patent and Trademark Office?

Analyzing historical spending for enterprise cloud support at the U.S. Patent and Trademark Office (USPTO) requires access to detailed procurement data beyond this single contract award. However, the trend across federal agencies, including the USPTO, has been a significant shift towards cloud adoption over the past decade. This move is driven by the desire for greater scalability, flexibility, cost savings, and enhanced cybersecurity. Previous spending likely involved a mix of on-premises infrastructure, legacy systems, and potentially earlier, smaller-scale cloud initiatives. This $160 million contract signifies a substantial, consolidated investment in modernizing their enterprise cloud capabilities, suggesting a ramp-up in cloud-related expenditures compared to prior periods. Understanding the specific breakdown of previous IT budgets allocated to cloud services versus other IT needs would provide a clearer picture of this contract's relative scale and the USPTO's evolving cloud strategy.

How does the pricing of this contract compare to similar enterprise cloud support contracts awarded by other federal agencies?

Directly comparing the pricing of this $160 million contract to similar enterprise cloud support contracts is complex without granular data on the specific services rendered, performance metrics, and labor categories. Federal agencies procure cloud services through various vehicles, including GSA schedules, agency-specific IDIQs, and full and open competitions, each with different pricing structures. However, the stated goal of 'efficient and cost-effective' services, coupled with the use of agile/DevOps, suggests an intent to achieve competitive market rates. The time and materials (T&M) pricing model, while flexible, necessitates vigilant oversight to ensure costs remain within expectations and do not inflate due to inefficiencies. Benchmarking would ideally involve comparing the blended hourly rates for key labor categories (e.g., cloud architects, DevOps engineers, cybersecurity specialists) against government-wide benchmarks or rates established under similar large-scale cloud contracts, such as those awarded under NASA SEWP or GSA's IT Schedule 70.

What are the key performance indicators (KPIs) used to measure the success of this contract?

The provided data does not explicitly list the Key Performance Indicators (KPIs) for this contract. However, given the emphasis on 'efficient and cost-effective enterprise cloud support services utilizing agile/DevOps methodologies,' it is highly probable that the contract includes performance standards related to service availability, system uptime, response times for issue resolution, and successful deployment of new features or services. Agile methodologies often incorporate metrics like sprint velocity, bug resolution rates, and cycle time. For cloud services, common KPIs include adherence to Service Level Agreements (SLAs) for availability (e.g., 99.9% uptime), security compliance, data integrity, and cost management efficiency. The effectiveness of the DevOps approach would likely be measured by the speed and reliability of software delivery pipelines and the reduction in deployment failures.

What is General Dynamics Information Technology's track record with similar large-scale cloud and IT modernization contracts?

General Dynamics Information Technology (GDIT) has a substantial track record in providing large-scale IT services, including cloud computing, cybersecurity, and enterprise IT modernization, to various federal agencies. They have held numerous significant contracts involving infrastructure management, application development, and mission support across defense, civilian, and intelligence communities. For instance, GDIT has been involved in major cloud migration projects and the operation of complex IT systems for agencies like the Department of Defense and the Department of Veterans Affairs. Their experience often includes implementing agile and DevOps practices, aligning with the requirements of this USPTO contract. Evaluating GDIT's performance on past contracts, particularly those with similar scope, complexity, and technological focus (like cloud adoption and agile development), would provide insight into their capability to successfully execute this delivery order.

What are the potential risks associated with relying on a Time and Materials (T&M) contract for cloud support services?

Time and Materials (T&M) contracts, while offering flexibility, carry inherent risks, primarily related to cost control. The primary risk is that the contractor may not be incentivized to control costs as effectively as they would under a fixed-price contract, as their profit is directly tied to the hours worked and materials used. This can lead to cost overruns if the scope of work expands unexpectedly or if project management is not rigorous. For cloud support services, this could manifest as extended troubleshooting times, inefficient resource allocation, or scope creep without adequate justification. To mitigate these risks, the government must implement strong oversight, including detailed tracking of labor hours, validation of material costs, and clear definition and management of the Statement of Work (SOW). Establishing labor hour ceilings and requiring regular progress reports are crucial.

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 › IT AND TELECOM - STORAGE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 7

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 3211 JERMANTOWN RD, FAIRFAX, VA, 22030

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

Financial Breakdown

Contract Ceiling: $172,610,889

Exercised Options: $159,695,916

Current Obligation: $159,695,916

Actual Outlays: $-16,095

Subaward Activity

Number of Subawards: 24

Total Subaward Amount: $55,710,260

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 47QTCK18D0003

IDV Type: GWAC

Timeline