HHS awarded $41.4M to General Dynamics for IT infrastructure support, with 3 bidders competing

Contract Overview

Contract Amount: $41,382,512 ($41.4M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2006-06-15

End Date: 2009-06-14

Contract Duration: 1,095 days

Daily Burn Rate: $37.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: QNET INFRASTRUCTURE SUPPORT AND MAINTENANCE

Place of Performance

Location: WARRENTON, FAUQUIER County, VIRGINIA, 20187

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $41.4 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: QNET INFRASTRUCTURE SUPPORT AND MAINTENANCE Key points: 1. Value for money appears fair given the fixed-fee structure and competitive bidding. 2. Competition dynamics indicate a healthy market for IT infrastructure services. 3. Risk indicators are moderate, with a fixed-fee contract type potentially limiting cost overruns. 4. Performance context is tied to essential IT infrastructure for Medicare and Medicaid. 5. Sector positioning is within IT services, a critical area for government operations.

Value Assessment

Rating: fair

The contract's total value of $41.4 million over three years suggests a moderate annual spend. While specific performance metrics and comparable contract data are not provided, the cost-plus-fixed-fee (CPFF) structure implies that the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This structure can incentivize cost control by the contractor, as the fee remains constant regardless of the final cost. Benchmarking against similar IT infrastructure support contracts would be necessary for a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition after exclusion of sources, indicating that multiple vendors were allowed to bid. With three bidders participating, the competition level suggests a reasonably active market for these services. The presence of multiple bidders generally aids in price discovery and can lead to more competitive pricing for the government.

Taxpayer Impact: The competitive bidding process for this contract likely resulted in a more favorable price for taxpayers compared to a sole-source award. Three bidders suggest that the government received multiple proposals, allowing for comparison and negotiation.

Public Impact

Beneficiaries include the Centers for Medicare and Medicaid Services (CMS) and ultimately, healthcare providers and beneficiaries who rely on these IT systems. Services delivered encompass essential IT infrastructure support and maintenance, crucial for the operation of critical healthcare programs. Geographic impact is primarily within the United States, supporting federal IT operations. Workforce implications include the potential for employment within General Dynamics and its subcontractors, as well as the IT professionals supporting CMS.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in CPFF contracts if not managed tightly.
Reliance on a single large contractor for critical IT infrastructure.
Need for robust performance monitoring to ensure service delivery quality.

Positive Signals

Awarded through full and open competition, indicating market interest.
Fixed fee component in the contract type can incentivize cost management.
Contract duration of three years allows for stability in service provision.

Sector Analysis

This contract falls within the Information Technology (IT) services sector, specifically focusing on infrastructure support and maintenance. The IT services market for the federal government is substantial, with significant spending allocated to maintaining and upgrading complex systems. Comparable spending benchmarks would typically involve analyzing other large-scale IT support contracts awarded by agencies like HHS, DOD, or GSA, often in the hundreds of millions or billions annually for comprehensive support.

Small Business Impact

The contract does not indicate any specific small business set-aside provisions (ss: false, sb: false). As a large contract awarded to General Dynamics Information Technology, Inc., it is unlikely to have a direct set-aside for small businesses. However, the prime contractor may engage small businesses for subcontracting opportunities to meet broader federal goals, though this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of Health and Human Services' contracting officers and program managers. The Centers for Medicare and Medicaid Services (CMS) would be responsible for monitoring performance and ensuring compliance with contract terms. Transparency is generally facilitated through contract databases like FPDS, where basic award information is publicly available. The Inspector General for HHS may also have jurisdiction for audits and investigations related to potential fraud, waste, or abuse.

Related Government Programs

CMS IT Modernization
Federal Health IT Services
Government IT Infrastructure Support
General Services Administration (GSA) IT Schedules
Department of Defense IT Services

Risk Flags

Contract type (CPFF) requires diligent oversight to manage costs.
Dependence on a single contractor for critical infrastructure.
Potential for cybersecurity risks inherent in IT infrastructure management.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $41.4 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. QNET INFRASTRUCTURE SUPPORT AND MAINTENANCE

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 Health and Human Services (Centers for Medicare and Medicaid Services).

What is the total obligated amount?

The obligated amount is $41.4 million.

What is the period of performance?

Start: 2006-06-15. End: 2009-06-14.

What is the track record of General Dynamics Information Technology, Inc. in supporting federal IT infrastructure contracts of similar scope and value?

General Dynamics Information Technology, Inc. (GDIT) has a long and extensive history of performing large-scale IT support and services contracts for various U.S. federal agencies, including the Department of Health and Human Services (HHS), Department of Defense (DoD), and others. Their portfolio often includes managing complex IT infrastructure, cybersecurity, cloud migration, and application development. For contracts of this magnitude ($41.4 million over three years), GDIT is a well-established player with demonstrated capabilities. However, a detailed analysis would require examining specific past performance evaluations, any past disputes or contract modifications, and their success in meeting key performance indicators (KPIs) on similar projects to fully assess their track record for this particular award.

How does the awarded price compare to market rates for similar IT infrastructure support services?

Benchmarking the awarded price of $41.4 million for three years of IT infrastructure support requires detailed market analysis. The contract type, Cost Plus Fixed Fee (CPFF), means the government pays allowable costs plus a predetermined profit. While the fixed fee provides some cost certainty, the overall cost is dependent on the contractor's ability to manage expenses. To compare with market rates, one would typically look at data from similar federal contracts (e.g., through FPDS or GSA schedules) or commercial IT managed services providers. Factors like the specific services included (e.g., network management, server maintenance, help desk support), geographic location of services, security requirements, and Service Level Agreements (SLAs) significantly influence pricing. Without these specifics, a precise comparison is difficult, but the competitive bidding process suggests the price was considered reasonable at the time of award.

What are the primary risks associated with this contract, and how are they being mitigated?

Primary risks for this contract include potential cost overruns (though mitigated by the fixed fee component), performance deficiencies in delivering critical IT support, cybersecurity vulnerabilities within the managed infrastructure, and vendor lock-in. Mitigation strategies typically involve robust contract oversight by the agency's Contracting Officer's Representative (COR), clearly defined Service Level Agreements (SLAs) with performance metrics and penalties, regular performance reviews, and stringent cybersecurity protocols mandated by the contract. The CPFF structure itself requires careful monitoring of allowable costs to prevent unnecessary expenditures. Furthermore, the competitive nature of the award provides some assurance that the contractor is motivated to perform well to secure future business.

How effective has General Dynamics Information Technology, Inc. been in fulfilling its contractual obligations on similar government IT contracts?

Assessing the effectiveness of GDIT on similar contracts requires access to past performance information, which is often not publicly detailed. Federal agencies maintain performance records, and contracting officers use these to inform future awards. Generally, GDIT's continued success in winning large federal contracts suggests a history of satisfactory performance. However, effectiveness can vary significantly between contracts due to differences in scope, management, and agency oversight. A comprehensive review would involve looking at CPARS (Contractor Performance Assessment Reporting System) reports if available, or any documented instances of outstanding performance or deficiencies on comparable contracts. Without specific CPARS data, we rely on their general market presence as an indicator.

What are the historical spending patterns for IT infrastructure support within the Centers for Medicare and Medicaid Services (CMS)?

Historical spending patterns for IT infrastructure support at CMS are substantial, reflecting the critical nature of its operations supporting Medicare and Medicaid. CMS consistently ranks among the largest federal agencies for IT spending. Annual expenditures often run into the hundreds of millions, if not billions, when considering all aspects of IT, including infrastructure, software development, data management, and cybersecurity. Contracts for infrastructure support, like the one awarded to General Dynamics, are a significant component of this overall spending. Analyzing historical data would reveal trends in contract values, types of services procured, and the primary contractors involved over several fiscal years, highlighting the agency's ongoing investment in maintaining and modernizing its IT backbone.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Veritas Capital Fund II L P (UEI: 160610809)

Address: 6193 FINCHINGFIELD RD # 201, WARRENTON, VA, 10

Business Categories: 8(a) Program Participant, Category Business, Hispanic American Owned Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, Woman Owned Business

Financial Breakdown

Contract Ceiling: $72,000,000

Exercised Options: $41,382,512

Current Obligation: $41,382,512

Timeline