DoD's $130M contract with General Dynamics IT for engineering services shows potential value concerns

Contract Overview

Contract Amount: $129,940,669 ($129.9M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2017-08-15

End Date: 2026-04-07

Contract Duration: 3,157 days

Daily Burn Rate: $41.2K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::CT::IGF

Plain-Language Summary

Department of Defense obligated $129.9 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: IGF::CT::IGF Key points: 1. The contract's cost-plus-fixed-fee structure may incentivize higher spending. 2. Limited public data makes direct value-for-money assessment challenging. 3. The duration of the contract (over 8 years) suggests a long-term need. 4. Engineering services are critical for defense infrastructure, but efficiency is key. 5. The award was made under full and open competition, indicating broad market access. 6. No small business set-aside was utilized, potentially limiting smaller firm participation.

Value Assessment

Rating: fair

Benchmarking the value of this contract is difficult without more granular cost data. The Cost Plus Fixed Fee (CPFF) pricing structure, while common for complex services, can sometimes lead to higher costs if not meticulously managed. Comparing it to similar long-term engineering service contracts within the Department of Defense would be necessary for a more definitive value assessment. The fixed fee component provides some cost certainty for the contractor's profit, but the cost reimbursement aspect leaves significant room for expenditure variation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The specific number of bidders is not provided, but this method generally promotes competitive pricing and allows the government to select the best value offer. The open competition is a positive indicator for price discovery and ensuring a competitive market.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing inherent in a full and open competition, which aims to secure services at the most advantageous terms.

Public Impact

The Department of Defense benefits from specialized engineering expertise to support its vast infrastructure and systems. Services delivered likely include design, development, integration, and sustainment of complex defense systems. The geographic impact is likely nationwide, supporting various military branches and installations. Workforce implications include employment for engineers, technicians, and support staff within General Dynamics Information Technology.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can lead to cost overruns if not closely monitored.
The long contract duration (over 8 years) may not adapt well to rapidly changing technological landscapes.
Lack of specific performance metrics in the provided data makes it hard to gauge effectiveness.
Potential for scope creep in long-term engineering projects.

Positive Signals

Awarded through full and open competition, suggesting a robust bidding process.
General Dynamics Information Technology is a large, established contractor with significant experience.
The fixed fee component provides some predictability in contractor profit.
Engineering services are essential for maintaining critical defense capabilities.

Sector Analysis

This contract falls within the Engineering Services sector, which is a significant component of the broader professional, scientific, and technical services industry. The federal government is a major consumer of these services, particularly within the defense sector, for the design, development, and maintenance of complex systems and infrastructure. Market size for federal engineering services is substantial, with significant annual outlays across various agencies. This contract represents a portion of the Department of Defense's ongoing investment in maintaining its technological edge and operational readiness.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false). This means that large businesses were eligible to compete and likely dominated the bidding process. While not a small business set-aside, large prime contractors are often required to subcontract a portion of the work to small businesses. The extent of subcontracting to small businesses would need further investigation to understand the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), ensuring compliance with contract terms and financial regulations. The contracting officer at the Defense Information Systems Agency (DISA) holds primary responsibility. Transparency is generally maintained through contract award databases, though detailed performance and cost breakdowns may be limited for national security reasons. Inspector General reports related to defense spending could provide further insights into accountability.

Related Government Programs

Defense Information Systems Agency (DISA) IT Services
Department of Defense Engineering and Technical Services
General Dynamics IT Contracts
Cost Plus Fixed Fee Contracts
Long-Term Defense Contracts

Risk Flags

Cost-plus contract type may lead to cost overruns.
Long contract duration increases risk of obsolescence and price non-competitiveness.
Lack of detailed performance metrics hinders effectiveness assessment.
Potential for scope creep in long-term engineering projects.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $129.9 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. IGF::CT::IGF

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 (Defense Information Systems Agency).

What is the total obligated amount?

The obligated amount is $129.9 million.

What is the period of performance?

Start: 2017-08-15. End: 2026-04-07.

What is the historical spending pattern for similar engineering services contracts awarded by the Department of Defense?

Historical spending on engineering services by the Department of Defense is substantial, often running into billions of dollars annually. These contracts typically support a wide range of activities, from research and development to system sustainment and infrastructure modernization. Analyzing past awards for similar scope and duration can reveal trends in pricing, contractor performance, and the prevalence of different contract types (e.g., CPFF, FFP). For instance, a review might show that longer-term CPFF contracts for complex defense systems tend to have higher total obligated amounts but also carry greater risk of cost growth compared to fixed-price contracts for well-defined services. Understanding these patterns helps contextualize the $130 million award to General Dynamics Information Technology and assess whether its terms align with historical norms or represent an outlier.

How does the Cost Plus Fixed Fee (CPFF) structure of this contract compare to other contract types used for similar defense engineering services?

The Cost Plus Fixed Fee (CPFF) contract type is often employed when the scope of work is not precisely defined at the outset or involves significant research and development, making it difficult to establish a firm fixed price. In such cases, the contractor is reimbursed for allowable costs plus a predetermined fixed fee representing profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers greater flexibility for the government to adapt to changing requirements but shifts more cost risk to the government. Other contract types like Cost Plus Incentive Fee (CPIF) or Cost Plus Award Fee (CPAF) introduce performance incentives. For well-defined engineering tasks, FFP contracts are generally preferred for better cost control. The choice of CPFF here suggests the services are complex and potentially evolving, necessitating flexibility but also requiring stringent oversight to manage costs effectively.

What is General Dynamics Information Technology's track record with similar large-scale defense engineering contracts?

General Dynamics Information Technology (GDIT), now part of General Dynamics, has a long and extensive track record of performing large-scale defense and government IT and engineering contracts. They have historically secured and executed numerous complex programs across various military branches and federal agencies. Their performance on similar contracts can be assessed through contract award databases, past performance reviews (often part of the bidding process for new contracts), and any publicly available reports from oversight bodies like Inspectors General. While specific details of past performance on contracts of this exact nature and value may not be fully public, GDIT's general reputation is that of a major incumbent capable of handling significant defense requirements. However, like any large contractor, they may have faced challenges or criticisms on specific projects, which would be important to consider.

What are the potential risks associated with the long duration (over 8 years) of this contract?

The extended duration of this contract, spanning from August 2017 to April 2026 (over 8 years), presents several potential risks. Firstly, technological obsolescence is a significant concern; systems and requirements can change rapidly in the defense sector, potentially rendering the contracted services or solutions outdated before the contract concludes. Secondly, long-term contracts can lead to complacency or reduced agility for both the contractor and the government. Thirdly, the cost of services may not remain competitive over such an extended period, especially if market rates decrease or more efficient solutions emerge. Finally, managing such a long-term relationship requires sustained oversight and adaptation, increasing the administrative burden and the potential for scope creep or misalignment if not actively managed.

How does the 'full and open competition' award mechanism impact the overall value and taxpayer cost for this contract?

Awarding this contract through 'full and open competition' is generally viewed as beneficial for taxpayers. This process allows any responsible source to submit a bid, thereby maximizing the pool of potential offerors and fostering robust competition. Increased competition typically drives down prices and encourages offerors to propose innovative solutions and demonstrate strong past performance to win the contract. While the specific number of bidders isn't detailed, the mechanism itself aims to ensure the government receives the best possible value by selecting the offer that provides the optimal balance of cost, technical merit, and other factors. This contrasts with sole-source or limited competition awards, which may result in higher prices due to reduced market pressure.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering 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: HC102814R0006

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 3211 JERMANTOWN RD, FAIRFAX, VA, 22030

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

Financial Breakdown

Contract Ceiling: $132,553,833

Exercised Options: $129,940,669

Current Obligation: $129,940,669

Subaward Activity

Number of Subawards: 78

Total Subaward Amount: $31,730,474

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC102815D0007

IDV Type: IDC

Timeline