DOE Modifies IT Services Contract by $70M with General Dynamics for Hardware Manufacturing
Contract Overview
Contract Amount: $70,180,244 ($70.2M)
Contractor: General Dynamics Information Technology, Inc.
Awarding Agency: Department of Energy
Start Date: 2006-11-06
End Date: 2008-09-30
Contract Duration: 694 days
Daily Burn Rate: $101.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE AWARD FEE
Sector: IT
Official Description: MODIFICATION TO ADD FUNDS TO THE IT SERVICES CONTRACT FOR FY07
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20426, UNITED STATES OF AMERICA
Plain-Language Summary
Department of Energy obligated $70.2 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: MODIFICATION TO ADD FUNDS TO THE IT SERVICES CONTRACT FOR FY07 Key points: 1. Significant contract modification adding $70M to existing IT services. 2. Sole-source award to General Dynamics Information Technology, Inc. 3. Contract covers hardware manufacturing, a deviation from typical IT services. 4. Long contract duration of nearly two years. 5. Potential for price escalation due to lack of competition.
Value Assessment
Rating: questionable
The award amount of $70,180,244 for a modification is substantial. Without competitive bidding, it's difficult to assess if this price is reasonable compared to market rates for similar hardware manufacturing services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and may lead to higher costs for taxpayers as there was no opportunity for other vendors to offer competitive pricing.
Taxpayer Impact: The lack of competition on a $70M modification raises concerns about potential overspending and inefficient use of taxpayer funds.
Public Impact
Taxpayers may be paying a premium due to the absence of competitive bidding. The modification shifts focus to hardware manufacturing, potentially impacting the agency's IT service delivery strategy. Long-term contract duration could lock the government into specific solutions or vendors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Significant funding increase
- Unclear justification for hardware manufacturing focus
- Long contract duration
Positive Signals
- Existing relationship with a known vendor
Sector Analysis
The IT hardware manufacturing sector is competitive, making a sole-source award for a significant amount questionable. Benchmarks for similar hardware manufacturing contracts are difficult to ascertain without more detail on the specific goods and services.
Small Business Impact
The award went to General Dynamics Information Technology, Inc., a large business. There is no indication that small businesses were involved in this modification or had an opportunity to participate.
Oversight & Accountability
The sole-source nature of this modification warrants scrutiny. Further investigation into the justification for not competing this significant funding increase is needed to ensure accountability.
Related Government Programs
- Hardware Manufacturing
- Department of Energy Contracting
- Federal Energy Regulatory Commission Programs
Risk Flags
- Lack of competition
- Significant contract modification amount
- Potential for cost overruns
- Unclear strategic alignment
- Limited transparency
Tags
hardware-manufacturing, department-of-energy, dc, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $70.2 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. MODIFICATION TO ADD FUNDS TO THE IT SERVICES CONTRACT FOR FY07
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 Energy (Federal Energy Regulatory Commission).
What is the total obligated amount?
The obligated amount is $70.2 million.
What is the period of performance?
Start: 2006-11-06. End: 2008-09-30.
What is the specific justification for awarding this $70M modification on a sole-source basis, particularly for hardware manufacturing?
The provided data does not include the justification for the sole-source award. Typically, sole-source contracts are used when only one responsible source can provide the required supplies or services, or in cases of urgent and compelling need. A thorough review of the agency's documentation would be required to understand the specific rationale behind this decision.
How does the pricing of this $70M modification compare to market rates for similar hardware manufacturing services, given the lack of competition?
Without competitive bids, it is challenging to establish a precise benchmark against market rates. The absence of competition means there was no direct price discovery mechanism. An independent cost analysis or comparison with publicly available pricing for similar hardware manufacturing contracts would be necessary to assess reasonableness.
What is the expected impact of this hardware manufacturing focus on the Federal Energy Regulatory Commission's overall IT service delivery and long-term strategy?
The modification's shift towards hardware manufacturing, rather than ongoing IT services, suggests a potential change in strategic focus or a specific project requirement. The impact on overall IT service delivery is unclear without further details on the nature of the hardware and its integration into the agency's systems. This could indicate a need for new infrastructure or equipment.
Industry Classification
NAICS: Manufacturing › Hardware Manufacturing › Hardware Manufacturing
Product/Service Code: HARDWARE AND ABRASIVES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIXED PRICE AWARD FEE (M)
Evaluated Preference: NONE
Contractor Details
Parent Company: General Dynamics Corp (UEI: 001381284)
Address: 3211 JERMANTOWN RD, FAIRFAX, VA, 22030
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $80,000,000
Exercised Options: $72,785,400
Current Obligation: $70,180,244
Timeline
Start Date: 2006-11-06
Current End Date: 2008-09-30
Potential End Date: 2008-09-30 00:00:00
Last Modified: 2017-02-24
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