VA Awards $783M for Computer Systems Design to CGI Federal, Extending Contract to 2026

Contract Overview

Contract Amount: $783,318,157 ($783.3M)

Contractor: CGI Federal Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2018-04-25

End Date: 2026-04-16

Contract Duration: 2,913 days

Daily Burn Rate: $268.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: AWARD - TO RE-OBLIGATE FUNDS USDA DE-OBLIGATED TO

Place of Performance

Location: FAIRFAX, FAIRFAX County, VIRGINIA, 22033

State: Virginia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $783.3 million to CGI FEDERAL INC. for work described as: AWARD - TO RE-OBLIGATE FUNDS USDA DE-OBLIGATED TO Key points: 1. Significant contract value of $783.3 million. 2. CGI Federal Inc. is the sole awardee. 3. Contract duration extends to April 2026. 4. Focus on Computer Systems Design Services (NAICS 541512).

Value Assessment

Rating: good

The contract value is substantial, suggesting a significant need for these services. Benchmarking against similar large-scale IT service contracts would be necessary for a precise value assessment, but the duration and scope indicate a potentially fair price for the services rendered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically drives competitive pricing. The specific pricing mechanisms within the firm-fixed-price structure would determine the extent of price discovery achieved.

Taxpayer Impact: Taxpayer funds are being utilized for essential IT services to the Department of Veterans Affairs, aiming to improve system design and functionality.

Public Impact

Impacts veterans through improved IT systems at the VA. Supports a major federal agency's operational capabilities. Ensures continuity of critical computer systems design services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration may lead to price increases over time.
Reliance on a single vendor for critical services.

Positive Signals

Awarded through full and open competition.
Firm fixed-price contract provides cost certainty.

Sector Analysis

This contract falls within the IT services sector, specifically computer systems design. Spending in this area is crucial for government modernization and efficiency. Benchmarks for similar large-scale IT service contracts can vary widely based on complexity and duration.

Small Business Impact

The awardee, CGI Federal Inc., is a large business. There is no indication of specific set-asides or subcontracting goals for small businesses in this award data.

Oversight & Accountability

The contract is managed by the Department of Veterans Affairs. Oversight would involve monitoring performance, adherence to contract terms, and ensuring value for money throughout the contract's lifecycle.

Related Government Programs

Computer Systems Design Services
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Long contract duration.
Large contract value.
Single awardee.
Potential for vendor lock-in.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $783.3 million to CGI FEDERAL INC.. AWARD - TO RE-OBLIGATE FUNDS USDA DE-OBLIGATED TO

Who is the contractor on this award?

The obligated recipient is CGI FEDERAL INC..

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $783.3 million.

What is the period of performance?

Start: 2018-04-25. End: 2026-04-16.

What specific computer systems design services are included in this contract, and how do they align with the VA's current and future IT modernization goals?

The contract specifies 'Computer Systems Design Services' (NAICS 541512). While the exact deliverables are not detailed here, these services typically encompass the design, development, and integration of complex IT systems. For the VA, this likely includes enhancing electronic health records, improving data management, and modernizing infrastructure to better serve veterans' needs and ensure data security and interoperability.

Given the $783 million value and 2026 end date, what are the primary risks associated with vendor lock-in and potential cost overruns for the VA?

The primary risk is vendor lock-in, where the VA becomes heavily reliant on CGI Federal's proprietary systems or expertise, making future transitions difficult and potentially costly. Cost overruns are a risk with any long-term, large-value contract, especially if the scope expands or unforeseen technical challenges arise. Mitigation requires strong contract management, clear performance metrics, and regular reviews of pricing and service delivery.

How effectively does the firm-fixed-price structure protect the VA against escalating costs for computer systems design services over the contract's duration?

A firm-fixed-price (FFP) contract is designed to provide cost certainty to the buyer by fixing the price regardless of the contractor's actual costs. This structure is generally effective in protecting the VA against cost escalations, assuming the scope of work is well-defined and stable. However, if significant scope changes occur, they would likely require contract modifications, potentially impacting the overall cost.

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 › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Timken Company

Address: 12601 FAIR LAKES CIR, 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: $832,699,505

Exercised Options: $783,318,157

Current Obligation: $783,318,157

Actual Outlays: $443,491,443

Subaward Activity

Number of Subawards: 62

Total Subaward Amount: $58,140,661

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSN316201200011W

IDV Type: GWAC

Timeline