HHS awards $91.5M IT contract to General Dynamics for network services, highlighting full and open competition

Contract Overview

Contract Amount: $91,539,247 ($91.5M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2018-01-12

End Date: 2023-12-06

Contract Duration: 2,154 days

Daily Burn Rate: $42.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF PROFESSIONAL INFORMATION TECHNOLOGY SERVICES TO SUPPORT NETWORK SERVICES

Place of Performance

Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $91.5 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: IGF::OT::IGF PROFESSIONAL INFORMATION TECHNOLOGY SERVICES TO SUPPORT NETWORK SERVICES Key points: 1. Contract value represents a significant investment in IT infrastructure for NIH. 2. General Dynamics Information Technology, Inc. secured this award through a competitive process. 3. The contract duration spans over five years, indicating a long-term need for these services. 4. Fixed-price contract type suggests cost certainty for the government. 5. The award falls under computer systems design services, a critical area for federal IT. 6. This contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle.

Value Assessment

Rating: good

The contract value of $91.5 million over approximately five years for IT network services appears reasonable given the scope. Benchmarking against similar large-scale IT support contracts for federal agencies suggests this pricing is within expected ranges. The firm-fixed-price structure provides cost predictability, which is a positive indicator for value. However, a detailed cost breakdown and comparison to specific market rates for comparable services would be needed 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, indicating that all responsible sources were permitted to submit offers. The data shows two bids were received, which suggests a moderate level of competition for this specific delivery order. While two bidders is better than one, a higher number of bids typically leads to more robust price discovery and potentially lower prices for the government.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages a wider range of offers, potentially leading to better pricing and service innovation. However, with only two bids, the competitive pressure might have been less intense than in a more crowded field.

Public Impact

The National Institutes of Health (NIH) benefits from enhanced IT network services, crucial for its research and administrative functions. Federal researchers and staff will have access to reliable and robust network infrastructure. The contract supports IT operations within Virginia, potentially impacting the local tech workforce. Improved network services can indirectly support the advancement of medical research and public health initiatives.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bidders) may not have driven the lowest possible price.
Reliance on a single large contractor for critical network infrastructure could pose a risk if performance issues arise.
The duration of the contract (over 5 years) means potential for vendor lock-in if not managed carefully.

Positive Signals

Awarded through full and open competition, ensuring a fair process.
Firm-fixed-price contract type provides cost certainty.
General Dynamics is an established federal IT contractor with a track record.
The contract supports critical IT infrastructure for a major federal health agency.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on computer systems design and network support. The federal IT market is substantial, with agencies consistently investing in modernizing their infrastructure. This contract represents a portion of the government's spending on essential IT operations, comparable to other large-scale IT support awards for agencies like HHS, DoD, and others requiring robust network capabilities.

Small Business Impact

This contract was not set aside for small businesses, and the data indicates no small business subcontracting was explicitly mandated or reported. The award to a large prime contractor like General Dynamics suggests that small businesses are unlikely to be direct beneficiaries unless they are part of General Dynamics' subcontracting chain. Further investigation would be needed to determine if any small business participation occurred.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services' contracting officers and program managers. The contract type (firm-fixed-price) inherently places some cost control on the contractor. Transparency is generally maintained through contract award databases like FPDS. Inspector General oversight may be involved if performance issues or potential fraud are identified.

Related Government Programs

IT Network Support Services
Computer Systems Design Services
Federal IT Infrastructure Modernization
Department of Health and Human Services IT Contracts
General Dynamics Federal Contracts

Risk Flags

Low number of bidders
Potential for scope creep in FFP contracts
Reliance on a single vendor for critical infrastructure

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $91.5 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. IGF::OT::IGF PROFESSIONAL INFORMATION TECHNOLOGY SERVICES TO SUPPORT NETWORK SERVICES

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 (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $91.5 million.

What is the period of performance?

Start: 2018-01-12. End: 2023-12-06.

What is the historical spending pattern for similar IT network services at NIH?

Historical spending on IT network services at NIH has been substantial and consistent, reflecting the agency's reliance on robust digital infrastructure for its extensive research and administrative operations. While specific figures for network services alone are difficult to isolate without detailed category breakdowns, NIH's overall IT budget typically runs into hundreds of millions of dollars annually. Contracts for network design, implementation, and maintenance are recurring, often awarded through IDIQ vehicles to large, established IT providers. Spending patterns show a continuous need for upgrades, cybersecurity enhancements, and support for increasing data volumes generated by research. This $91.5M contract is a significant, but not unprecedented, investment within this ongoing trend of IT infrastructure support.

How does the number of bidders (2) compare to typical competition levels for similar federal IT contracts?

A competition level of two bidders for a federal IT contract of this magnitude ($91.5M) is on the lower side of what is generally considered robust. While full and open competition was utilized, allowing all eligible sources to bid, the low number of actual bids received suggests potential barriers to entry, specialized requirements, or perhaps a limited pool of qualified contractors for this specific niche. Typically, for large IT contracts, agencies aim for and often receive a higher number of bids (e.g., 3-5 or more) when the scope is clearly defined and the market is sufficiently competitive. A lower number of bidders can sometimes indicate less price pressure and potentially higher costs for the government compared to a more crowded field.

What is General Dynamics Information Technology's track record with the federal government, particularly HHS?

General Dynamics Information Technology (GDIT), now part of General Dynamics, has a long and extensive track record as a major federal IT contractor across numerous agencies, including the Department of Health and Human Services (HHS). They have historically secured and performed on a wide array of complex IT services contracts, encompassing areas such as network infrastructure, cloud computing, cybersecurity, data analytics, and mission support systems. GDIT is known for handling large-scale, mission-critical programs. Their performance history with HHS includes significant contracts supporting various operating divisions, demonstrating a capacity to meet the agency's demanding IT requirements. While specific performance metrics for every contract vary, GDIT's overall presence and continued awards indicate a generally satisfactory performance record with federal clients.

What are the potential risks associated with a firm-fixed-price contract for IT network services?

Firm-fixed-price (FFP) contracts are designed to provide cost certainty to the government, shifting most of the cost risk to the contractor. For IT network services, the primary risk associated with FFP lies in potential scope creep or unforeseen technical challenges. If the contractor underestimates the complexity or effort required to deliver the specified network services, they may incur losses. Conversely, if the scope is not tightly defined, the contractor might be incentivized to cut corners on quality or service levels to protect their profit margin, potentially impacting network performance or reliability. Another risk is that the contractor may lack flexibility to incorporate innovative solutions mid-contract without formal change orders, which can be costly and time-consuming.

How does this contract align with broader federal IT modernization goals?

This contract directly aligns with broader federal IT modernization goals by providing essential support for the network infrastructure at the National Institutes of Health (NIH). Modernizing federal IT is a key objective to improve efficiency, enhance cybersecurity, and enable better service delivery. Robust and up-to-date network capabilities are foundational to these goals, supporting everything from data-intensive research to secure communication and collaboration. By ensuring the NIH has reliable network services, this contract contributes to the overall health of the federal IT ecosystem, allowing agencies to leverage newer technologies and handle increasing data demands, which is a core tenet of federal IT modernization efforts.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: NIHJT2010001

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corporation

Address: 3150 FAIRVIEW PARK DR STE 100, FALLS CHURCH, VA, 22042

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

Financial Breakdown

Contract Ceiling: $91,539,247

Exercised Options: $91,539,247

Current Obligation: $91,539,247

Actual Outlays: $33,301,183

Subaward Activity

Number of Subawards: 17

Total Subaward Amount: $6,012,979

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSN316201200050W

IDV Type: GWAC

Timeline