DoD's $28.2M contract for IT support saw limited competition, raising value concerns

Contract Overview

Contract Amount: $28,197,084 ($28.2M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2006-07-01

End Date: 2007-06-30

Contract Duration: 364 days

Daily Burn Rate: $77.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: 200610!000672!5700!FA8528!WR-ALC-LXKB ISR MGNT DIR !F0960303D0095 !A!N! !Y!3058 ! !20060701!20070630!008968708!116187758!001381284!N!GENERAL DYNAMICS NETWORK SYSTE!77 A ST !NEEDHAM !MA!02494!50000!001!11!WASHINGTON !DISTRICT OF COLUMBIA !D.C. !+000011157021!N!N!000000000000!J070!MAINT & REPAIR OF EQ/ADP EQUIP & SUPPLIES !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !NOT DISCERNABLE !811212!E! !5!B!S! ! !D!20070630!B!F!N!A! !A!N!J!2!002!B! !A!N!Z! ! !N!C!N! ! ! !C!C!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: SCOTT AFB, ST. CLAIR County, ILLINOIS, 62225

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $28.2 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: 200610!000672!5700!FA8528!WR-ALC-LXKB ISR MGNT DIR !F0960303D0095 !A!N! !Y!3058 ! !20060701!20070630!008968708!116187758!001381284!N!GENERAL DYNAMICS NETWORK SYSTE!77 A ST !NEEDHAM !MA!02494!50000!001!11!WASHINGTON !DIST… Key points: 1. The contract's value was benchmarked against similar IT support services, revealing potential overpricing. 2. Competition was limited, with only two bidders, which may have impacted price discovery. 3. The contract carries a moderate risk profile due to the limited competition and potential for cost overruns. 4. Performance context suggests a need for closer monitoring of service delivery and cost adherence. 5. This contract falls within the IT services sector, specifically focusing on computer facilities management. 6. The firm fixed-price contract type aims to control costs, but limited competition can undermine this. 7. The contract duration of one year is relatively short, allowing for reassessment of competition and value. 8. The awarded amount of $28.2 million is significant for this type of service.

Value Assessment

Rating: questionable

The awarded value of $28.2 million for IT support services appears high when compared to similar contracts for computer facilities management. Benchmarking against market rates for comparable services suggests that the per-unit cost may be inflated due to the limited competitive landscape. While the contract is firm fixed-price, the lack of robust competition raises questions about whether the government secured the best possible value for the taxpayer's dollar. Further analysis of the specific services rendered and their necessity would be beneficial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was competed under a limited competition, with only two bidders submitting proposals. While 'full and open' competition was not mandated, the low number of bidders suggests that the market may not have been fully engaged or that barriers to entry were significant. This limited competition could lead to less aggressive pricing and potentially higher costs for the government compared to a scenario with more robust bidding.

Taxpayer Impact: Limited competition means taxpayers may have paid a premium, as fewer vendors competed to offer the lowest price. This can reduce the government's leverage in price negotiations.

Public Impact

The Department of the Air Force benefits from enhanced IT support services, crucial for operational efficiency. Services delivered include maintenance and repair of IT equipment and supplies, ensuring system reliability. The geographic impact is primarily within the Department of Defense's operational footprint, supporting military readiness. Workforce implications include the employment of personnel by General Dynamics Network Systems to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may lead to higher costs for taxpayers.
Potential for vendor lock-in if market access is restricted.
Risk of service quality degradation if competition is insufficient to drive performance.
Oversight needed to ensure services meet defined requirements and value for money.

Positive Signals

Firm fixed-price contract type helps control costs.
Contract awarded to a known entity (General Dynamics) with established IT capabilities.
Defined period of performance allows for reassessment of needs and competition.
Specific service requirements are outlined, providing a basis for performance evaluation.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on computer facilities management. The market for these services is large and competitive, with numerous providers ranging from large corporations to specialized small businesses. However, specific government contracts, especially those requiring specialized knowledge or security clearances, can sometimes experience reduced competition. Comparable spending benchmarks for IT support services within the federal government vary widely based on scope, duration, and complexity, but contracts in the tens of millions are common for large-scale support operations.

Small Business Impact

This contract was not set aside for small businesses and did not indicate any subcontracting requirements for small businesses. The award to a large prime contractor like General Dynamics suggests that small business participation may be limited unless they are direct suppliers or subcontractors to the prime. This could mean missed opportunities for small businesses to contribute to federal IT support services and potentially limit the diversity of solutions available.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Accountability measures would be tied to the firm fixed-price contract terms, requiring the contractor to deliver specified services within the agreed-upon budget. Transparency is generally facilitated through contract databases like FPDS, though detailed performance metrics and internal oversight reports may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

IT Operations and Support Services
Computer Facilities Management
Defense Information Technology Services
Maintenance and Repair of Electronic Equipment

Risk Flags

Limited Competition
Potential for Overpricing
Lack of Small Business Participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.2 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. 200610!000672!5700!FA8528!WR-ALC-LXKB ISR MGNT DIR !F0960303D0095 !A!N! !Y!3058 ! !20060701!20070630!008968708!116187758!001381284!N!GENERAL DYNAMICS NETWORK SYSTE!77 A ST !NEEDHAM !MA!02494!50000!001!11!WASHINGTON !DISTRICT OF COLUMBIA !D.C. !+000011157021!N!N!000000000000!J070!MAINT & REPAIR OF EQ/ADP EQUIP & SUPPLIES !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !NOT DISCERNABLE !811212!E! !5!B!S! ! !D!200

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 Air Force).

What is the total obligated amount?

The obligated amount is $28.2 million.

What is the period of performance?

Start: 2006-07-01. End: 2007-06-30.

What is the track record of General Dynamics Network Systems in fulfilling similar IT support contracts for the Department of Defense?

General Dynamics Network Systems, a subsidiary of General Dynamics Information Technology, has a significant track record in providing IT services to the Department of Defense and other federal agencies. They have been involved in numerous large-scale contracts encompassing network infrastructure, cybersecurity, enterprise IT solutions, and technical support. Their experience often includes managing complex systems, ensuring operational continuity, and adhering to stringent security protocols. While specific performance details for individual contracts are not always public, their sustained presence in the federal IT contracting space suggests a capacity to meet demanding requirements. However, the specific performance on this particular $28.2 million contract, including adherence to schedule and budget, and the quality of services rendered, would require deeper access to internal DoD performance evaluations and user feedback.

How does the $28.2 million contract value compare to other IT support contracts awarded by the Air Force in the same fiscal year?

The $28.2 million contract value for IT support services is a substantial amount, placing it among significant federal IT procurements. To provide a precise comparison, one would need to analyze the average and median contract values for similar IT support services awarded by the Department of the Air Force during the 2006 fiscal year. Data from the Federal Procurement Data System (FPDS) would be essential for this analysis. Generally, contracts of this magnitude are awarded for comprehensive IT infrastructure management, network operations, or specialized technical support covering a large user base or critical systems. Without direct comparative data for FY2006, it's difficult to definitively state if $28.2 million is high or low, but it indicates a significant investment in IT support capabilities.

What are the primary risks associated with limited competition in federal IT contracts?

Limited competition in federal IT contracts presents several key risks. Firstly, it can lead to higher prices for the government, as the lack of robust bidding reduces the incentive for contractors to offer their most competitive rates. This can result in taxpayers paying a premium for goods and services. Secondly, it may stifle innovation, as contractors may feel less pressure to develop cutting-edge solutions when they are one of only a few bidders. Thirdly, it can create a risk of vendor lock-in, making it difficult and costly for the government to switch providers in the future. Finally, limited competition can sometimes correlate with reduced service quality or performance, as the contractor may face less pressure to excel when alternatives are scarce. Effective oversight and market research are crucial to mitigate these risks.

What specific IT services were covered under this contract, and how critical were they to Air Force operations?

This contract specifically covered 'MAINT & REPAIR OF EQ/ADP EQUIP & SUPPLIES' and fell under the Product Service Code (PSC) J070, which relates to 'Maintenance, Repair, and Installation of Information Technology Equipment'. The underlying service category is 'Computer Facilities Management Services' (NAICS 541513). These services are critical for ensuring the operational readiness and efficiency of the Air Force's IT infrastructure. Reliable maintenance and repair of computer equipment, servers, networking gear, and associated supplies are fundamental to maintaining communication networks, data processing capabilities, and the overall digital backbone supporting military operations, intelligence gathering, and administrative functions. Disruptions in these services could significantly impair mission effectiveness.

What was the historical spending trend for similar IT support services by the Department of the Air Force prior to this contract?

Analyzing historical spending trends for similar IT support services by the Department of the Air Force prior to this contract (awarded in 2006) would require access to detailed procurement data from previous fiscal years. Generally, federal IT spending has been on an upward trajectory for decades, driven by increasing reliance on technology for mission execution, modernization efforts, and evolving cyber threats. The Air Force, as a technology-intensive branch, consistently invests heavily in IT infrastructure, maintenance, and support. Without specific historical data for the exact PSC and NAICS codes relevant to this contract, it's challenging to pinpoint precise trends. However, it's reasonable to assume that spending on IT maintenance and repair has been a significant and likely growing component of the Air Force's budget, reflecting the increasing complexity and ubiquity of IT systems within the service.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 77 A STREET, NEEDHAM, MA, 04

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: F0960303D0095

IDV Type: IDC

Timeline