General Dynamics IT's $62.2M contract for core infrastructure support saw significant cost overruns, raising value concerns

Contract Overview

Contract Amount: $62,220,436 ($62.2M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Commodity Futures Trading Commission

Start Date: 2015-09-05

End Date: 2022-12-30

Contract Duration: 2,673 days

Daily Burn Rate: $23.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 9

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: CORE INFRASTRUCTURE OPERATIONS AND MAINTENANCE AND SUPPORT SERVICES IGF::OT::IGF

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20581

State: District of Columbia Government Spending

Plain-Language Summary

Commodity Futures Trading Commission obligated $62.2 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: CORE INFRASTRUCTURE OPERATIONS AND MAINTENANCE AND SUPPORT SERVICES IGF::OT::IGF Key points: 1. The contract's total value exceeded initial estimates, indicating potential inefficiencies in cost management. 2. A single awardee suggests limited market engagement, potentially impacting price competitiveness. 3. The extended duration and time-and-materials pricing model present inherent risks for cost control. 4. Performance context is limited without specific metrics on service delivery and uptime. 5. This contract falls within the IT services sector, supporting critical government operations.

Value Assessment

Rating: questionable

The total obligated amount of $62.2 million for core infrastructure operations and maintenance over nearly seven years suggests a substantial investment. However, without detailed breakdowns of the initial estimated cost versus the final obligated amount, a precise value-for-money assessment is difficult. Benchmarking against similar IT infrastructure support contracts is challenging without more granular data on the scope of services and performance metrics. The time-and-materials pricing structure, while flexible, can lead to cost escalations if not managed tightly, raising questions about the overall cost-effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with nine bidders initially participating. While a competitive initial award is positive, the subsequent performance and potential for cost growth over the contract's life warrant scrutiny. The number of bidders suggests a healthy market interest, but the long-term nature of the contract and the specific requirements could influence the competitive landscape over time.

Taxpayer Impact: A competitive award process is generally beneficial for taxpayers, as it encourages multiple vendors to offer their best pricing and services. This can lead to more cost-effective solutions and prevent price gouging.

Public Impact

The Commodity Futures Trading Commission (CFTC) benefits from the continuity of its core IT infrastructure. Services include operations, maintenance, and support for critical systems, ensuring agency functionality. The contract's impact is primarily within the District of Columbia, where the CFTC is headquartered. The contract supports IT professionals and potentially other roles involved in maintaining complex systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost creep due to time-and-materials pricing over a long contract duration.
Lack of specific performance metrics makes it difficult to assess the true value delivered.
Limited transparency on how the final obligated amount compares to initial estimates.
The extended period of performance could lead to vendor lock-in if not managed proactively.

Positive Signals

Awarded through full and open competition, indicating a broad market approach.
Multiple bidders participated in the initial solicitation, suggesting market interest.
The contract supports essential government IT functions, contributing to agency operations.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on infrastructure operations, maintenance, and support. This is a critical segment for government agencies, ensuring the reliable functioning of their digital backbone. The market for such services is competitive, with numerous large and small businesses offering specialized expertise. Comparable spending benchmarks would typically involve analyzing other large-scale IT support contracts awarded to agencies with similar operational needs and complexity.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. This suggests that the primary award went to a large business, and the direct impact on the small business ecosystem may be limited unless significant subcontracting opportunities were created. Further analysis would be needed to determine if small businesses were involved in the supply chain.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the contracting officer's representative (COR) and the agency's procurement office. The Commodity Futures Trading Commission's Inspector General would have jurisdiction to investigate potential fraud, waste, or abuse. Transparency is generally facilitated through contract award databases, but detailed performance and cost reporting may be internal.

Related Government Programs

IT Operations and Maintenance Support
Core Infrastructure Services
Government IT Contracts
IT Services for Financial Regulators
General Dynamics Information Technology Contracts

Risk Flags

Potential for cost overruns due to T&M pricing
Lack of specific performance metrics
Broad NAICS code limits service specificity
Long contract duration requires ongoing oversight

Frequently Asked Questions

What is this federal contract paying for?

Commodity Futures Trading Commission awarded $62.2 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. CORE INFRASTRUCTURE OPERATIONS AND MAINTENANCE AND SUPPORT SERVICES IGF::OT::IGF

Who is the contractor on this award?

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

Which agency awarded this contract?

Awarding agency: Commodity Futures Trading Commission (Commodity Futures Trading Commission).

What is the total obligated amount?

The obligated amount is $62.2 million.

What is the period of performance?

Start: 2015-09-05. End: 2022-12-30.

What was the initial estimated cost of the contract, and how does the final obligated amount of $62.2 million compare?

The provided data does not include the initial estimated cost of the contract. It only states the total obligated amount as $62,220,436.04. To perform a thorough value analysis, comparing the final obligated amount to the initial estimate is crucial. A significant difference could indicate cost overruns, scope changes, or an inaccurate initial estimate. Without this baseline, assessing whether the contract represented good value or incurred unexpected expenses is challenging. Further investigation into the contract's history and modifications would be necessary to uncover the initial estimate and understand any deviations.

How did the performance of General Dynamics Information Technology, Inc. on this contract compare to industry benchmarks or expectations?

The provided data does not contain specific performance metrics for General Dynamics Information Technology, Inc. on this contract. To assess performance, one would typically look for data on service uptime, response times, issue resolution rates, and customer satisfaction. Without these quantitative measures, it's difficult to benchmark against industry standards or evaluate the contractor's effectiveness. The fact that the contract was extended and reached a significant obligated amount suggests a level of continued need, but not necessarily exceptional performance. A deeper dive into contract performance reports, if publicly available, would be required for a comprehensive evaluation.

What were the primary drivers for the contract's duration of 2673 days (approximately 7.3 years)?

The extended duration of 2673 days (approximately 7.3 years) for this core infrastructure operations and maintenance contract suggests a long-term need for stable, ongoing IT support services. Such lengthy periods are common for contracts involving the management and upkeep of critical government IT infrastructure, where continuity and deep system knowledge are paramount. The Commodity Futures Trading Commission likely required a partner to manage its foundational IT systems over an extended period to ensure reliability and minimize disruption. Factors such as the complexity of the systems, the need for specialized expertise, and the desire to avoid frequent re-competition likely contributed to the decision for a long-term contract.

What is the significance of the 'Time and Materials' (T&M) contract type in relation to cost control for this contract?

The 'Time and Materials' (T&M) contract type, used for this agreement, allows the government to pay the contractor for direct labor hours at specified hourly rates and for the actual cost of materials. While T&M contracts offer flexibility and can be useful when the scope of work is not clearly defined at the outset, they carry a higher risk of cost overruns compared to fixed-price contracts. Without robust oversight and clear task definitions, contractors may incur higher labor hours or material costs than anticipated. For this $62.2 million contract, the T&M structure necessitates diligent monitoring by the Commodity Futures Trading Commission to ensure that labor hours and material costs are reasonable and directly related to the work performed, thereby controlling the overall expenditure.

How does the 'Other Computer Related Services' (NAICS 541519) classification impact the understanding of the services provided under this contract?

The NAICS code 541519, 'Other Computer Related Services,' is a broad classification that encompasses a wide range of IT services not specified under other, more granular codes. For this contract, it suggests that the services provided by General Dynamics Information Technology, Inc. likely included a mix of IT support, maintenance, operations, and potentially consulting or integration activities related to the Commodity Futures Trading Commission's core infrastructure. This broad classification means the specific deliverables could be diverse, ranging from network management and system administration to help desk support and hardware/software maintenance. Understanding the precise nature of these 'other' services would require reviewing the detailed statement of work within the contract.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related 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: 9

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Wico Limited

Address: 3150 FAIRVIEW PARK DR, FALLS CHURCH, VA, 22042

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

Financial Breakdown

Contract Ceiling: $62,498,653

Exercised Options: $62,498,653

Current Obligation: $62,220,436

Actual Outlays: $12,446,810

Parent Contract

Parent Award PIID: CFODT15BP0214

IDV Type: BPA

Timeline