DoD's $37.5M Stock Control System contract awarded to General Dynamics IT shows potential value concerns

Contract Overview

Contract Amount: $37,459,082 ($37.5M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2009-09-30

End Date: 2015-01-30

Contract Duration: 1,948 days

Daily Burn Rate: $19.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: LABOR HOURS

Sector: IT

Official Description: STOCK CONTROL SYSTEM

Place of Performance

Location: BEAVERCREEK, GREENE County, OHIO, 45431

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $37.5 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: STOCK CONTROL SYSTEM Key points: 1. The contract's duration of nearly 2000 days suggests a long-term need for the stock control system. 2. Awarded under full and open competition, the contract's pricing should reflect competitive market forces. 3. The 'Other Computer Related Services' NAICS code indicates a broad range of potential IT services. 4. Performance context is limited without specific details on system functionality and user satisfaction. 5. The contract's significant dollar value warrants scrutiny for cost-effectiveness and value for money. 6. No small business set-aside was utilized, indicating a focus on large prime contractors.

Value Assessment

Rating: fair

The total award of $37.5 million over approximately 5.5 years for a stock control system requires careful benchmarking. Without specific details on the system's features, complexity, and the labor hours involved, it is difficult to definitively assess value for money. However, the duration and cost suggest a substantial investment. Comparing this to similar IT system development and maintenance contracts within the DoD or other federal agencies would be crucial to determine if the pricing is competitive and if the government received good value. The 'Labor Hours' contract type can sometimes lead to cost overruns if not managed tightly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition,' which is the preferred method for ensuring the widest possible participation and potentially the best pricing. The number of bidders is not specified, but this level of competition generally implies that multiple companies had the opportunity to propose solutions and pricing. This process should theoretically drive down costs and encourage innovation as contractors vie for the award. The effectiveness of this competition in achieving optimal price discovery depends on the clarity of the solicitation and the responsiveness of the market.

Taxpayer Impact: Taxpayers benefit from full and open competition as it typically leads to more competitive pricing and a wider range of solutions, potentially resulting in better value for the government's investment.

Public Impact

The primary beneficiaries are the Department of the Air Force, which receives a system to manage its stock and inventory. The services delivered include the development, maintenance, and potentially enhancement of a critical stock control system. The geographic impact is likely concentrated within Air Force installations that utilize this system for inventory management. Workforce implications may include IT professionals, logistics personnel, and system administrators involved in the system's operation and support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to the 'Labor Hours' contract type if not meticulously managed.
Lack of specific performance metrics makes it difficult to assess the system's effectiveness and the contractor's success.
The broad NAICS code 'Other Computer Related Services' could mask the true nature and complexity of the services provided.
Long contract duration without clear break points or re-competition could reduce incentives for continuous improvement.

Positive Signals

Awarded through 'Full and Open Competition,' suggesting a robust bidding process and potential for competitive pricing.
The contract addresses a fundamental operational need for inventory and stock control within the Air Force.
General Dynamics Information Technology is a large, established contractor with significant experience in federal IT services.

Sector Analysis

This contract falls within the Information Technology sector, specifically under IT services and support. The NAICS code 541519, 'Other Computer Related Services,' is broad and encompasses a wide array of IT functions beyond standard software development or infrastructure management. The federal IT services market is substantial, with agencies consistently investing in systems to manage logistics, operations, and data. Comparable spending benchmarks would involve analyzing other large-scale IT system development and sustainment contracts within the Department of Defense, particularly those focused on logistics and inventory management.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it indicate any specific subcontracting requirements for small businesses in the provided data. The prime contractor, General Dynamics Information Technology, is a large business. This suggests that the primary focus was on securing a capable provider through full and open competition, rather than specifically targeting small business participation. The absence of set-aside provisions means that small businesses would likely participate as subcontractors, if at all, under the direction of the prime contractor.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contracting officer's representative (COR) within the Department of the Air Force. Accountability measures would be defined in the contract's statement of work and performance standards. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected or alleged.

Related Government Programs

DoD Logistics and Supply Chain Management Systems
Air Force IT Modernization Programs
Federal Inventory Management Systems
Department of Defense Enterprise Resource Planning (ERP) Systems

Risk Flags

Potential for cost creep due to 'Labor Hours' contract type.
Lack of specific performance metrics hinders objective evaluation.
Broad NAICS code obscures detailed service scope.
Long contract duration may reduce contractor incentive for innovation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.5 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. STOCK CONTROL SYSTEM

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 Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $37.5 million.

What is the period of performance?

Start: 2009-09-30. End: 2015-01-30.

What specific functionalities does the 'STOCK CONTROL SYSTEM' provide, and how critical are these to Air Force operations?

The provided data does not detail the specific functionalities of the 'STOCK CONTROL SYSTEM.' However, as a stock control system, it is generally expected to manage inventory levels, track the movement of goods, forecast demand, optimize storage, and potentially integrate with procurement and financial systems. For the Air Force, such a system is critical for maintaining readiness by ensuring the availability of necessary parts, equipment, and supplies across various installations and operations. Its effectiveness directly impacts logistical efficiency, cost control, and the ability to support mission requirements. Without further details, its criticality is inferred from its essential role in supply chain management.

How does the $37.5 million cost compare to similar stock control systems procured by other federal agencies or military branches?

Benchmarking the $37.5 million cost requires detailed comparison with similar systems. Factors such as system complexity, scope of services (development vs. sustainment), contract duration, number of users, and specific functionalities (e.g., advanced analytics, real-time tracking, integration capabilities) significantly influence pricing. A system developed from scratch for a large enterprise might cost more than a COTS (Commercial Off-The-Shelf) solution with customization. Without these specifics, a direct comparison is challenging. However, for a system spanning nearly six years, $37.5 million is a substantial investment that warrants thorough analysis against comparable IT logistics and inventory management solutions to ensure competitive pricing and value for money.

What are the key performance indicators (KPIs) used to measure the success of this contract and the stock control system?

The provided data does not specify the Key Performance Indicators (KPIs) for this contract. Typically, for a stock control system, KPIs might include inventory accuracy rates, stockout frequency, order fulfillment times, system uptime and availability, user satisfaction scores, and cost savings achieved through optimized inventory levels. The 'Labor Hours' contract type suggests that performance might be measured by the efficient application of labor hours towards defined tasks and milestones, rather than purely outcome-based metrics. Effective oversight would involve tracking these KPIs to ensure the system meets its objectives and the contractor delivers satisfactory performance.

What is General Dynamics Information Technology's track record with similar large-scale IT system contracts for the Department of Defense?

General Dynamics Information Technology (GDIT) has a long and extensive track record of delivering large-scale IT systems and services to the Department of Defense and other federal agencies. They are a major government IT contractor known for handling complex projects involving software development, system integration, cybersecurity, and IT infrastructure management. Their portfolio includes work on various defense systems, enterprise resource planning (ERP) solutions, and data management platforms. While specific performance details for every contract are not publicly available, GDIT's sustained presence and significant contract awards suggest a generally reliable performance history in meeting the demanding requirements of military clients, though like any large contractor, they may have faced challenges on specific projects.

Given the 'Labor Hours' contract type, what measures are in place to prevent cost overruns and ensure efficient resource utilization?

Contracts awarded using the 'Labor Hours' (LH) type are inherently susceptible to cost overruns if not managed diligently. To mitigate this risk, robust oversight mechanisms are crucial. These typically include a detailed Statement of Work (SOW) with clearly defined tasks and deliverables, strict monitoring of labor hours charged by the contractor, regular progress reviews, and the establishment of ceilings or not-to-exceed (NTE) amounts. The Contracting Officer's Representative (COR) plays a vital role in overseeing daily activities, verifying work performed, and ensuring that labor hours are used efficiently and effectively towards achieving contract objectives. Audits and performance metrics, even if not outcome-based, help ensure accountability.

How does the 'Other Computer Related Services' NAICS code (541519) influence 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 specifically covered by more specialized codes. This can include services like IT consulting, systems integration, disaster recovery planning, data processing services, and IT support. For this contract, it suggests the services could extend beyond simple software development or hardware maintenance to include a comprehensive suite of IT solutions related to the stock control system. The broadness of the code means that the specific nature of the work—whether it's primarily project management, custom software engineering, ongoing support, or a combination—is not immediately apparent and requires a deeper dive into the contract's Statement of Work (SOW) for clarity.

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: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Parent Company: Csra LLC (UEI: 080011988)

Address: 3560 PENTAGON BLVD, BEAVERCREEK, OH, 45431

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

Financial Breakdown

Contract Ceiling: $79,819,534

Exercised Options: $49,074,004

Current Obligation: $37,459,082

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Timeline