General Dynamics IT awarded $393.8M EPA contract for IT services, with a 5-year duration

Contract Overview

Contract Amount: $393,859,426 ($393.9M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: General Services Administration

Start Date: 2022-04-04

End Date: 2027-04-03

Contract Duration: 1,825 days

Daily Burn Rate: $215.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS AWARD FEE

Sector: IT

Official Description: MANAGED APPLICATION, INFRASTRUCTURE, NETWORKING, ENTERPRISE, AND SECURITY SERVICES (MAINES) IN SUPPORT OF THE ENVIRONMENTAL PROTECTION AGENCY (EPA)

Place of Performance

Location: DURHAM, DURHAM County, NORTH CAROLINA, 27709

State: North Carolina Government Spending

Plain-Language Summary

General Services Administration obligated $393.9 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: MANAGED APPLICATION, INFRASTRUCTURE, NETWORKING, ENTERPRISE, AND SECURITY SERVICES (MAINES) IN SUPPORT OF THE ENVIRONMENTAL PROTECTION AGENCY (EPA) Key points: 1. The contract's Cost Plus Award Fee (CPAF) structure incentivizes performance but requires careful monitoring of award fee determinations. 2. Full and open competition suggests a potentially competitive pricing environment, though the final price depends on awarded fees. 3. The contract's duration of 1825 days (5 years) indicates a long-term need for these IT services. 4. The North Carolina location for service delivery may have implications for local IT workforce availability and cost structures. 5. The NAICS code 541512 (Computer Systems Design Services) positions this contract within a broad and dynamic IT services market. 6. The absence of small business set-aside flags suggests larger prime contractors are expected to perform the majority of the work.

Value Assessment

Rating: good

Benchmarking the $393.8 million total contract value against similar large-scale IT managed services contracts for federal agencies reveals it to be within a typical range. The Cost Plus Award Fee (CPAF) pricing structure, while common for complex services, necessitates a thorough review of how award fees are determined to ensure they align with actual performance and represent good value. Without specific performance metrics and award fee payouts, a precise value-for-money assessment is challenging, but the competitive bidding process provides a foundation for reasonable pricing.

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 offers. The presence of 3 delivery orders suggests that the initial bidding process was robust enough to lead to multiple taskings. A competitive environment generally promotes price discovery and can lead to more favorable terms for the government.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of receiving competitive pricing and encourages a wider pool of contractors to vie for government work, potentially driving down costs through market forces.

Public Impact

The Environmental Protection Agency (EPA) is the primary beneficiary, receiving essential IT services to support its mission. Services include managed application, infrastructure, networking, enterprise, and security support, crucial for the EPA's operations. The contract's performance is tied to North Carolina, potentially impacting the local IT job market and economy. This contract ensures the continuity of critical IT functions, enabling the EPA to carry out its environmental protection mandates.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The CPAF structure requires diligent oversight to ensure award fees are justified by performance and do not inflate costs.
The broad scope of services necessitates robust performance monitoring to ensure all areas are adequately addressed.
Reliance on a single large contractor for such critical IT functions could pose risks if the contractor's performance falters.

Positive Signals

Awarded under full and open competition, suggesting a competitive process that should yield fair pricing.
The contract's long duration provides stability and allows for deep integration of services with the EPA's needs.
General Dynamics Information Technology is an established IT services provider with significant federal contracting experience.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on managed services, infrastructure, networking, and security. The federal IT services market is substantial, with agencies increasingly relying on contractors for specialized expertise and operational efficiency. Comparable spending benchmarks for large-scale managed IT services contracts often range in the hundreds of millions of dollars over several years, making this contract's value consistent with industry norms for comprehensive IT support.

Small Business Impact

The contract was not awarded as a small business set-aside, and there is no indication of specific subcontracting goals for small businesses within the provided data. This suggests that the prime contractor, General Dynamics Information Technology, is expected to perform the majority of the work. While this may limit direct opportunities for small businesses as prime contractors on this specific award, it does not preclude them from potentially participating as subcontractors if General Dynamics chooses to engage them.

Oversight & Accountability

Oversight for this contract will likely be managed by the General Services Administration (GSA) and the EPA's contracting officers. Performance monitoring, delivery order reviews, and financial audits are standard oversight mechanisms. The CPAF structure implies that award fee determinations will be a key component of performance oversight. Transparency is typically maintained through contract reporting requirements and public contract databases, though specific internal oversight details are not provided.

Related Government Programs

EPA IT Modernization Contracts
GSA IT Schedule Contracts
Managed IT Services Federal Contracts
Cybersecurity Services for Federal Agencies
Enterprise IT Infrastructure Support

Risk Flags

Potential for cost overruns due to CPAF structure if not managed tightly.
Reliance on a single large contractor for critical IT functions.
Need for robust performance monitoring to ensure award fees are justified.
Ensuring adequate cybersecurity measures are maintained across all service areas.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $393.9 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. MANAGED APPLICATION, INFRASTRUCTURE, NETWORKING, ENTERPRISE, AND SECURITY SERVICES (MAINES) IN SUPPORT OF THE ENVIRONMENTAL PROTECTION AGENCY (EPA)

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC..

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $393.9 million.

What is the period of performance?

Start: 2022-04-04. End: 2027-04-03.

What is the historical performance record of General Dynamics Information Technology with the EPA or similar agencies for managed IT services?

General Dynamics Information Technology (GDIT) has a substantial track record in providing IT services to various federal agencies, including the EPA. Their experience encompasses a wide range of services similar to those outlined in this contract, such as infrastructure management, application development, cybersecurity, and enterprise IT support. Analyzing past performance reviews, contract awards, and any reported issues or successes with previous EPA contracts or comparable large-scale managed services agreements would provide deeper insight into GDIT's capabilities and reliability in fulfilling the requirements of this new award. Specific data on past performance, including any past performance evaluations or debriefings from prior contracts, would be crucial for a comprehensive assessment.

How does the awarded amount of $393.8 million compare to previous EPA IT managed services contracts?

To compare the $393.8 million award to previous EPA IT managed services contracts, one would need to identify comparable historical contracts awarded by the EPA for similar scope and duration. Factors such as inflation, technological advancements, and the evolving scope of IT services over time must be considered. If previous contracts were for similar services but for a lower dollar amount, it could indicate an increase in service costs, scope expansion, or inflationary pressures. Conversely, if previous contracts were for higher amounts, it might suggest improved efficiency, better negotiation, or a reduction in service scope. Without specific historical contract data for the EPA in this domain, a direct comparison is difficult, but the current award appears substantial, reflecting the complexity and scale of modern IT managed services.

What are the key performance indicators (KPIs) that will be used to evaluate GDIT's performance under this contract?

The key performance indicators (KPIs) for this contract are not explicitly detailed in the provided data. However, for a Managed Application, Infrastructure, Networking, Enterprise, and Security Services (MAINES) contract, typical KPIs would likely include metrics related to system uptime and availability, network performance, incident response times, security vulnerability remediation rates, application performance and availability, user satisfaction, and adherence to service level agreements (SLAs). The Cost Plus Award Fee (CPAF) structure implies that performance against these, or similar, KPIs will directly influence the award fees earned by General Dynamics Information Technology. A thorough review of the contract's Performance Work Statement (PWS) would be necessary to identify the precise KPIs and their associated targets.

What is the risk associated with the Cost Plus Award Fee (CPAF) contract type for the EPA?

The primary risk associated with a Cost Plus Award Fee (CPAF) contract type for the EPA lies in the potential for cost growth if not managed diligently. While CPAF incentivizes contractor performance by offering award fees based on meeting or exceeding specific criteria, it also requires robust oversight to ensure that the 'cost' component remains reasonable and that the 'award fee' is truly earned through exceptional performance. There is a risk that the contractor may incur higher costs than anticipated, and the award fee structure could lead to a higher overall price than a fixed-price contract, especially if the criteria for earning award fees are not clearly defined or are subjectively interpreted. The EPA must have strong program management and technical expertise to effectively monitor costs, evaluate performance against award criteria, and ensure that the total compensation represents good value.

How does the geographic location in North Carolina impact the cost and service delivery for this contract?

The specified service delivery location in North Carolina can influence both the cost and the operational aspects of this contract. Labor costs for IT professionals can vary significantly by region; North Carolina may offer a competitive talent pool with potentially lower wage expectations compared to high-cost areas like Silicon Valley or Washington D.C., which could contribute to cost savings. However, the availability of specialized IT skills and the ease of recruiting and retaining qualified personnel in North Carolina are critical factors. Furthermore, the physical infrastructure and network connectivity within North Carolina could impact service delivery efficiency and reliability. The EPA and GDIT would need to ensure that the chosen location supports the required service levels and security protocols effectively.

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 - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 47QFCA21R0032

Offers Received: 3

Pricing Type: COST PLUS AWARD FEE (R)

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: $661,646,630

Exercised Options: $503,479,312

Current Obligation: $393,859,426

Subaward Activity

Number of Subawards: 224

Total Subaward Amount: $199,218,238

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 47QTCK18D0003

IDV Type: GWAC

Timeline