FCC's $15.4M Core Financial System Replacement awarded to CGI Federal Inc. over 10 years

Contract Overview

Contract Amount: $15,420,906 ($15.4M)

Contractor: CGI Federal Inc.

Awarding Agency: Federal Communications Commission

Start Date: 2008-09-28

End Date: 2018-05-31

Contract Duration: 3,532 days

Daily Burn Rate: $4.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: CORE FIN SYSTEM REPLACEMENT SW

Place of Performance

Location: FAIRFAX, FAIRFAX County, VIRGINIA, 22033

State: Virginia Government Spending

Plain-Language Summary

Federal Communications Commission obligated $15.4 million to CGI FEDERAL INC. for work described as: CORE FIN SYSTEM REPLACEMENT SW Key points: 1. Contract value represents a significant, long-term investment in financial system modernization. 2. The duration of the contract suggests a need for sustained support and potential for scope expansion. 3. Awarded under full and open competition, indicating a broad market search. 4. The fixed-price contract type aims to control costs and provide budget certainty. 5. The contract's performance period spans a decade, requiring robust vendor management. 6. This system replacement is critical for the FCC's operational efficiency and financial integrity.

Value Assessment

Rating: fair

The total contract value of $15.4 million over 10 years averages to $1.54 million annually. Benchmarking this against similar large-scale financial system replacement projects across federal agencies is challenging without more granular data on system scope and complexity. However, the extended duration suggests a potentially favorable annual cost if the system effectively meets the FCC's evolving needs. The firm fixed-price nature provides cost predictability, but the long term could expose the government to risks if market prices for similar services decrease significantly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that the FCC sought bids from all responsible sources. With 3 bids received, the competition level appears moderate. While full and open competition is generally preferred for maximizing value, the number of bidders could influence price negotiation. A higher number of bidders typically leads to more competitive pricing, whereas a lower number might indicate specific market conditions or high barriers to entry for potential competitors.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages a wider range of vendors to offer their services, potentially leading to lower prices and better quality solutions. The moderate number of bidders in this case suggests that while competition was present, there may have been room for further price discovery.

Public Impact

The primary beneficiary is the Federal Communications Commission (FCC), which gains a modernized core financial system. Services delivered include the design, development, and maintenance of a new financial management system. The geographic impact is primarily within the FCC's operational locations, likely supporting its headquarters and regional offices. Workforce implications include the need for IT and financial management personnel to operate and maintain the new system, as well as potential training for existing staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (10 years) increases risk of vendor lock-in and potential for cost overruns if not managed effectively.
Firm Fixed Price over a decade may not adapt well to changing technological landscapes or unforeseen requirements, potentially leading to change orders.
Limited number of bids (3) could indicate a less competitive market for this specific type of financial system replacement, potentially impacting price.
The nature of a core financial system replacement implies significant disruption and risk during the transition phase.

Positive Signals

Awarded under full and open competition, maximizing potential vendor pool.
Firm Fixed Price contract type provides cost certainty for the government.
The extended performance period allows for a stable, long-term solution to be implemented and supported.
The contract is for a critical system replacement, indicating a commitment to modernizing essential government functions.

Sector Analysis

The IT services sector, specifically computer systems design services, is a large and dynamic market. Federal spending in this area is substantial, driven by the need to modernize legacy systems and improve operational efficiency. This contract fits within the broader category of enterprise resource planning (ERP) or financial management system implementations. Comparable spending benchmarks would typically involve analyzing the total contract value against the size and complexity of the agency's financial operations and the scope of the system being replaced.

Small Business Impact

The contract data indicates that small business participation was not a specific set-aside (ss: false, sb: false). This suggests the competition was open to all responsible contractors, including large businesses. There is no explicit information on subcontracting plans for small businesses within the provided data. Without specific set-aside goals or reporting requirements, the direct impact on the small business ecosystem is likely minimal unless CGI Federal Inc. voluntarily engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would primarily fall under the Federal Communications Commission's contracting officers and program managers. The firm fixed-price nature provides a degree of cost control, but the long duration necessitates continuous monitoring of performance, scope creep, and vendor adherence to contract terms. Transparency is generally facilitated through federal procurement databases like FPDS-NG. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise during the contract's lifecycle.

Related Government Programs

Financial Management Systems
Core Financial System Replacements
IT Modernization Contracts
Computer Systems Design Services
Enterprise Resource Planning (ERP) Systems

Risk Flags

Long contract duration
Potential for technology obsolescence
Vendor lock-in risk
Moderate competition level

Frequently Asked Questions

What is this federal contract paying for?

Federal Communications Commission awarded $15.4 million to CGI FEDERAL INC.. CORE FIN SYSTEM REPLACEMENT SW

Who is the contractor on this award?

The obligated recipient is CGI FEDERAL INC..

Which agency awarded this contract?

Awarding agency: Federal Communications Commission (Federal Communications Commission).

What is the total obligated amount?

The obligated amount is $15.4 million.

What is the period of performance?

Start: 2008-09-28. End: 2018-05-31.

What is the historical spending pattern for financial system replacements at the FCC?

Analyzing historical spending patterns for financial system replacements at the FCC is crucial for contextualizing the $15.4 million award. Without specific historical data for the FCC's financial system modernization efforts, it's difficult to provide a precise comparison. However, federal agencies frequently undertake such replacements due to aging infrastructure, evolving regulatory requirements, and the need for greater efficiency. These projects are often multi-year endeavors with significant price tags, ranging from a few million to tens or even hundreds of millions of dollars depending on agency size and system complexity. The FCC's award appears to be a substantial, long-term investment, suggesting a comprehensive overhaul rather than a minor upgrade. Understanding past investments would reveal trends in technology adoption, vendor choices, and project success rates within the FCC.

How does the per-unit cost of this contract compare to similar federal financial system implementations?

Determining a precise per-unit cost for comparison is challenging without a defined 'unit' for this contract, such as 'per user,' 'per module,' or 'per transaction.' The total contract value of $15.4 million over 10 years, averaging $1.54 million annually, needs to be assessed against the scope and complexity of the FCC's financial operations. Larger agencies with more complex financial structures and a wider array of financial functions (e.g., procurement, grants, payroll, budgeting) typically incur higher costs for system replacements. Smaller agencies or those with simpler needs might spend less. Given the 10-year duration, the annual cost seems moderate for a comprehensive system replacement. However, without detailed scope information and comparable agency data, a definitive benchmark is not feasible. The firm fixed-price nature, however, aims to cap the government's financial exposure.

What is CGI Federal Inc.'s track record with similar large-scale financial system projects for federal agencies?

CGI Federal Inc. has a significant track record in providing IT services and system implementations to various federal agencies. They are known to have experience with financial management systems, enterprise resource planning (ERP) solutions, and large-scale IT modernization projects. To assess their specific performance on similar projects, one would need to examine past contracts, including their value, duration, scope, and client agency feedback. Publicly available data, such as contract awards and performance ratings (if available), can offer insights. A review of CGI Federal's past performance on financial system replacements would help determine their capability to deliver on complex projects, manage risks effectively, and meet government requirements within budget and schedule. Their longevity in the federal contracting space suggests a degree of success, but project-specific analysis is always warranted.

What are the key performance indicators (KPIs) used to measure the success of this financial system replacement?

Key Performance Indicators (KPIs) for a financial system replacement project like the FCC's Core Financial System Replacement would typically focus on system functionality, performance, user adoption, and financial accuracy. Examples include: System Uptime/Availability (ensuring the system is accessible when needed), Transaction Processing Speed (measuring efficiency), Data Accuracy and Integrity (critical for financial reporting), User Satisfaction (gauging ease of use and effectiveness), Reduction in Manual Processes (indicating efficiency gains), Timeliness of Financial Reporting (meeting regulatory and internal deadlines), and Security Compliance (adherence to federal security standards). The contract's firm fixed-price nature over 10 years implies that these KPIs would be closely monitored to ensure the vendor, CGI Federal Inc., is meeting its obligations and delivering the expected value throughout the system's lifecycle.

What is the potential risk associated with the 10-year duration of this contract?

The 10-year duration of this contract presents several potential risks. Firstly, it increases the risk of vendor lock-in, making it difficult and costly for the FCC to switch providers if performance degrades or better solutions emerge. Secondly, technology evolves rapidly; a system implemented today might become outdated within a decade, potentially requiring costly modifications or workarounds. Thirdly, the firm fixed-price structure over such a long period might not adequately account for inflation or unforeseen market shifts in labor or technology costs, potentially leading to disputes or change orders. Finally, maintaining consistent oversight and vendor accountability over a decade requires sustained effort and robust contract management practices to ensure the government continues to receive value for money.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: RFQ07000021

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: CGI Inc (UEI: 248513116)

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: $26,358,877

Exercised Options: $24,836,465

Current Obligation: $15,420,906

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Timeline