GSA's $336M Network Defense Contract with CGI Federal Faces Scrutiny Over Value and Competition

Contract Overview

Contract Amount: $336,215,941 ($336.2M)

Contractor: CGI Federal Inc.

Awarding Agency: General Services Administration

Start Date: 2019-06-20

End Date: 2024-06-19

Contract Duration: 1,826 days

Daily Burn Rate: $184.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS AWARD FEE

Sector: IT

Official Description: DYNAMIC AND EVOLVING FEDERAL ENTERPRISE NETWORK DEFENSE GROUP C DEFEND C

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22202

State: Virginia Government Spending

Plain-Language Summary

General Services Administration obligated $336.2 million to CGI FEDERAL INC. for work described as: DYNAMIC AND EVOLVING FEDERAL ENTERPRISE NETWORK DEFENSE GROUP C DEFEND C Key points: 1. The contract's significant value raises questions about cost-effectiveness given the duration. 2. Full and open competition was utilized, but the impact on price discovery needs further analysis. 3. Potential risks include vendor lock-in and the evolving nature of cybersecurity threats. 4. The IT sector is highly dynamic, requiring continuous adaptation and competitive pricing.

Value Assessment

Rating: fair

The contract's Cost Plus Award Fee structure can incentivize performance but may also lead to higher costs if not managed tightly. Benchmarking against similar large-scale IT service contracts is crucial to assess value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

While full and open competition was employed, the long duration and specific nature of the services may limit true price discovery over time. The number of bids received and their competitiveness are key factors.

Taxpayer Impact: The substantial investment requires rigorous oversight to ensure taxpayer funds are used efficiently and effectively for critical network defense.

Public Impact

Federal agencies rely on robust network defense to protect sensitive data and critical infrastructure. The cybersecurity landscape is constantly changing, necessitating agile and adaptable defense solutions. Contracting for these services involves balancing cost, performance, and long-term security needs. Public trust depends on the government's ability to secure its digital assets.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns in Cost Plus Award Fee contracts.
Long contract duration may not keep pace with rapidly evolving threats.
Limited visibility into specific performance metrics and award fee allocations.
Cybersecurity is a critical and sensitive area requiring constant vigilance.

Positive Signals

Utilized full and open competition, promoting a wider vendor pool.
Contract aims to provide essential network defense capabilities.
General Services Administration (GSA) is a reputable contracting agency.

Sector Analysis

This contract falls within the IT sector, specifically computer systems design services, focusing on network defense. Spending in this area is substantial and growing due to increasing cyber threats. Benchmarks for similar large-scale IT service contracts are essential for comparison.

Small Business Impact

The data indicates this is a large contract awarded to CGI Federal Inc. There is no explicit information provided regarding small business participation or subcontracting goals within this specific award.

Oversight & Accountability

The General Services Administration (GSA) is responsible for overseeing this contract. Effective oversight is critical to manage costs, ensure performance, and adapt to evolving cybersecurity needs throughout the contract's life.

Related Government Programs

Computer Systems Design Services
General Services Administration Contracting
Federal Acquisition Service Programs

Risk Flags

Cost Plus Award Fee structure potential for cost overruns.
Long contract duration may lead to outdated technology or strategies.
Evolving nature of cybersecurity threats requires continuous adaptation.
Limited insight into specific performance metrics and award fee justifications.
Potential for vendor lock-in despite initial competition.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $336.2 million to CGI FEDERAL INC.. DYNAMIC AND EVOLVING FEDERAL ENTERPRISE NETWORK DEFENSE GROUP C DEFEND C

Who is the contractor on this award?

The obligated recipient is CGI FEDERAL INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $336.2 million.

What is the period of performance?

Start: 2019-06-20. End: 2024-06-19.

How effectively has the Cost Plus Award Fee structure incentivized performance and controlled costs for network defense over the contract's lifespan?

The Cost Plus Award Fee (CPAF) structure is designed to reward contractors for meeting or exceeding performance targets. However, without detailed performance reports and award fee determinations, it's difficult to assess its effectiveness in this specific case. CPAF contracts can sometimes lead to higher overall costs compared to fixed-price arrangements if not meticulously managed and if award criteria are not sufficiently stringent or clearly defined.

What specific risks are associated with a long-term (5-year) contract for dynamic cybersecurity services, and how are they being mitigated?

A significant risk is that the technology and threat landscape will evolve beyond the scope or capabilities defined in the original contract. Mitigation strategies could include robust contract modification clauses, regular performance reviews, and incorporating flexibility for technological advancements. The agency must actively manage the contract to ensure it remains relevant and effective against current and future threats.

Does the $336 million expenditure represent a competitive and efficient use of taxpayer funds for the network defense capabilities provided?

Assessing the efficiency requires comparing the contract's cost and delivered capabilities against market benchmarks and alternative solutions. While full and open competition was used, the long duration and specific service requirements might limit the degree of price competition achieved over time. A thorough cost-benefit analysis and benchmarking against similar contracts are necessary to determine if this represents an optimal use of funds.

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

Solicitation ID: ID08190037

Offers Received: 4

Pricing Type: COST PLUS AWARD FEE (R)

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: $701,658,374

Exercised Options: $347,168,971

Current Obligation: $336,215,941

Actual Outlays: $-760,991

Subaward Activity

Number of Subawards: 222

Total Subaward Amount: $1,004,101,538

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS00Q09BGD0022

IDV Type: GWAC

Timeline