DOJ's $58.9M IT contract with General Dynamics saw significant cost growth over its 8-year lifespan

Contract Overview

Contract Amount: $58,898,254 ($58.9M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Justice

Start Date: 2004-10-07

End Date: 2012-05-05

Contract Duration: 2,767 days

Daily Burn Rate: $21.3K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 4

Pricing Type: COST PLUS AWARD FEE

Sector: IT

Official Description: FITS

Place of Performance

Location: SPRINGFIELD, FAIRFAX County, VIRGINIA, 22152

State: Virginia Government Spending

Plain-Language Summary

Department of Justice obligated $58.9 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: FITS Key points: 1. The contract experienced substantial cost increases from its initial award value, indicating potential scope creep or underestimation. 2. Competition was robust at the delivery order level, suggesting a healthy market for these IT services. 3. The cost-plus award fee structure may incentivize contractor performance but also carries inherent cost-plus risks. 4. Performance context is limited without specific metrics on service delivery and outcomes. 5. This contract falls within the IT services sector, a common area for federal procurement. 6. The long duration of the contract (2767 days) allowed for extensive contractor involvement and potential for evolving requirements.

Value Assessment

Rating: fair

Benchmarking this contract's value is challenging without detailed performance data and specific service breakdowns. However, the significant increase in obligated funds over its lifespan suggests that the initial pricing may not have fully accounted for the eventual scope or that market conditions evolved. Comparing it to similar IT system design contracts would reveal if the per-unit costs or overall value were aligned with industry standards at the time of award and subsequent modifications. The cost-plus award fee structure, while offering flexibility, can sometimes lead to higher final costs compared to fixed-price contracts if not managed tightly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded as a competitive delivery order, indicating that multiple vendors likely competed for this specific task order under a broader indefinite-delivery/indefinite-quantity (IDIQ) contract. The presence of competition at this level is generally positive, suggesting that the government sought the best value among qualified offerors. The number of bidders for the specific delivery order would provide a clearer picture of the intensity of competition and its potential impact on pricing and innovation.

Taxpayer Impact: A competitive award process generally leads to better price discovery and potentially lower costs for taxpayers by leveraging market forces.

Public Impact

Federal law enforcement agencies, specifically the DEA, benefited from enhanced computer systems design and support. The services delivered likely included system design, integration, maintenance, and potentially software development for critical law enforcement operations. The contract's primary geographic impact was likely within the United States, supporting DEA operations nationwide. The contract supported a workforce of IT professionals and system designers, contributing to specialized federal IT employment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost growth over the contract's lifespan suggests potential for budget overruns or scope creep.
The long duration of the contract could lead to technology obsolescence if not actively managed.
Cost-plus award fee contracts require diligent oversight to ensure value for money and prevent contractor inefficiencies.

Positive Signals

Awarded through a competitive process, indicating potential for good value.
The contractor, General Dynamics Information Technology, is a large, established entity with significant federal contracting experience.
The contract supported critical IT infrastructure for a major federal law enforcement agency.

Sector Analysis

This contract falls within the Information Technology (IT) services sector, specifically focusing on computer systems design. The federal IT services market is vast, with agencies consistently procuring services for system development, integration, cybersecurity, and maintenance. Comparable spending benchmarks would involve analyzing other large-scale IT system design and support contracts awarded by agencies like the Department of Justice or other law enforcement bodies. The market is characterized by a mix of large prime contractors and specialized subcontractors, with significant competition for major IT procurements.

Small Business Impact

Information regarding small business set-asides or subcontracting plans for this specific delivery order was not detailed in the provided data. As a large contract likely awarded to a major IT provider, there may have been opportunities for small businesses to participate as subcontractors. The absence of explicit small business set-aside information suggests it was not a primary focus for this particular award, though standard subcontracting clauses may still apply.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Drug Enforcement Administration. Accountability measures would be tied to the performance objectives outlined in the Cost Plus Award Fee (CPAF) structure. Transparency is generally facilitated through contract award databases and reporting requirements, though detailed operational oversight specifics are often internal. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arose during the contract's performance.

Related Government Programs

Department of Justice IT Modernization Programs
Drug Enforcement Administration Information Systems
Federal Law Enforcement Technology Procurement
Computer Systems Design Services Contracts
Cost-Plus Award Fee Contracts

Risk Flags

Cost Growth
Long Contract Duration
Cost-Plus Fee Structure

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $58.9 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. FITS

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 Justice (Drug Enforcement Administration).

What is the total obligated amount?

The obligated amount is $58.9 million.

What is the period of performance?

Start: 2004-10-07. End: 2012-05-05.

What was the initial award value of this contract, and how did it evolve over its lifespan?

The provided data indicates the contract was awarded on 2004-10-07 and ended on 2012-05-05, with a total obligated amount of $58,898,253.94. While the initial award value is not explicitly stated, the total obligated amount represents the cumulative spending over the contract's duration. The difference between the initial award and the final obligated amount would reveal the extent of growth, which could be attributed to modifications, scope changes, or adjustments in contract type and pricing. Without the initial baseline, a precise growth percentage cannot be calculated, but the substantial final figure suggests significant evolution from its inception.

How many bidders competed for this specific delivery order, and what does this imply for price discovery?

The data indicates this was a 'COMPETITIVE DELIVERY ORDER' with 4 bidders ('no': 4). A competition involving four bidders is generally considered healthy and suggests that multiple vendors were interested and capable of performing the required computer systems design services. A higher number of bidders typically leads to more robust price discovery, as companies are incentivized to offer competitive pricing to win the contract. This level of competition likely provided the Department of Justice with a reasonable range of options and potentially secured a more favorable price than a sole-source or limited-competition scenario.

What is the typical cost structure for 'Cost Plus Award Fee' (CPAF) contracts, and what are the associated risks?

A Cost Plus Award Fee (CPAF) contract reimburses the contractor for allowable costs incurred plus a fee that consists of a fixed base amount and an award amount. The award amount is determined based on the contractor's performance against pre-defined criteria. This structure aims to incentivize high performance by offering potential for a higher fee. However, risks include the potential for higher overall costs compared to fixed-price contracts, as the government bears the cost risk. There's also a risk that the award criteria may not perfectly align with desired outcomes, or that the evaluation process for the award fee could be subjective, leading to disputes or contractor dissatisfaction if not managed meticulously.

How does the North American Industry Classification System (NAICS) code 541512 relate to the services provided under this contract?

The NAICS code 541512, 'Computer Systems Design Services,' directly corresponds to the nature of the work performed under this contract. This code encompasses establishments primarily engaged in planning and designing computer systems that integrate hardware, software, and communication technologies. Services include activities like systems analysis, systems integration design, and implementation consulting. Therefore, the contract likely involved the expertise of General Dynamics Information Technology in designing, developing, and potentially implementing complex computer systems tailored to the specific needs of the Drug Enforcement Administration.

What does the contract duration of 2767 days signify in terms of project scope and management?

A contract duration of 2767 days, approximately 7.6 years, signifies a long-term engagement for complex IT services. Such extended periods are typical for large-scale system design, development, and ongoing support projects where requirements may evolve over time. This duration implies a deep integration of the contractor's services into the agency's operations. It necessitates robust contract management to oversee performance, adapt to technological changes, manage costs effectively, and ensure the continued relevance and security of the systems being developed or maintained throughout the contract's life.

Can we assess the contractor's track record with this specific contract based on the provided data?

The provided data confirms that General Dynamics Information Technology, Inc. was the contractor for this contract. It also indicates the contract was awarded competitively and involved significant funding over its lifespan. However, the data does not include specific performance evaluations, quality metrics, or details about the contractor's success in meeting objectives. To assess their track record on this specific contract, one would need access to performance reports, award fee determinations, and potentially any past performance reviews or contract close-out documentation. The fact that it was a long-term, competitively awarded contract suggests a baseline level of capability and trust, but does not provide a qualitative assessment of performance.

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: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: DEA04R0020

Offers Received: 4

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Sterling Parent Inc. (UEI: 968838909)

Address: 4300 FAIR LAKES CT, FAIRFAX, VA, 22033

Business Categories: Category Business, Hospital, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $60,173,161

Exercised Options: $60,173,161

Current Obligation: $58,898,254

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS35F4594G

IDV Type: FSS

Timeline