HHS awards $41.9M for IT services to General Dynamics, facing potential cost overruns

Contract Overview

Contract Amount: $41,881,879 ($41.9M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2014-04-01

End Date: 2017-09-29

Contract Duration: 1,277 days

Daily Burn Rate: $32.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: IGF::OT::IGF CASE COORDINATION

Place of Performance

Location: FAIRFAX, FAIRFAX County, VIRGINIA, 22030

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $41.9 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: IGF::OT::IGF CASE COORDINATION Key points: 1. The contract value is substantial, indicating significant IT needs within HHS. 2. General Dynamics Information Technology, Inc. is a major player in the IT services sector. 3. The 'TIME AND MATERIALS' contract type presents a risk for cost escalation. 4. The sector is Administrative Management and General Management Consulting Services, a common area for IT support.

Value Assessment

Rating: questionable

The contract uses a Time and Materials (T&M) pricing structure, which offers less price certainty compared to fixed-price contracts. Without strong oversight and clear task definitions, T&M can lead to higher-than-expected costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the T&M pricing structure may have limited the ability to achieve the most cost-effective outcome.

Taxpayer Impact: The T&M pricing model poses a risk to taxpayers if not managed diligently, potentially leading to spending exceeding initial estimates.

Public Impact

Citizens rely on efficient and cost-effective IT services within the Department of Health and Human Services. Transparency in IT spending is crucial for public trust and accountability. The use of T&M contracts requires robust monitoring to ensure value for taxpayer money.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials contract type
Potential for cost overruns
Lack of specific PSC code

Positive Signals

Awarded under full and open competition
Long contract duration indicates sustained need

Sector Analysis

This contract falls under Administrative Management and General Management Consulting Services, a broad category often encompassing IT support and operational consulting. Benchmarks for similar IT services contracts vary widely based on scope and complexity.

Small Business Impact

The data does not indicate any specific set-aside for small businesses, suggesting large businesses likely dominated the competition for this contract.

Oversight & Accountability

The 'VA' (Virginia) state code and 'ST' (State) field suggest a potential geographic focus for service delivery. Oversight would be critical to manage the T&M aspects and ensure performance aligns with contract requirements.

Related Government Programs

Administrative Management and General Management Consulting Services
Department of Health and Human Services Contracting
Office of the Assistant Secretary for Administration Programs

Risk Flags

Risk of cost overruns due to Time and Materials pricing.
Potential for scope creep without strict management.
Limited visibility into specific IT services procured.
Lack of small business participation indicated.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $41.9 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. IGF::OT::IGF CASE COORDINATION

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 (Office of the Assistant Secretary for Administration).

What is the total obligated amount?

The obligated amount is $41.9 million.

What is the period of performance?

Start: 2014-04-01. End: 2017-09-29.

What specific IT services were procured under this contract, and how do they align with HHS's strategic goals?

The contract, identified by NAICS code 541611, covers Administrative Management and General Management Consulting Services. This typically includes IT strategy, system implementation, and operational support. Understanding the specific deliverables and their alignment with HHS's mission is key to assessing the contract's strategic value and ensuring it contributes effectively to public health initiatives.

What mechanisms were in place to control costs and ensure fair pricing under the Time and Materials contract?

Given the Time and Materials (T&M) pricing structure, robust oversight mechanisms are essential. This includes detailed tracking of labor hours and material costs, clear definitions of billable activities, and regular audits. Without stringent controls, T&M contracts can lead to significant cost overruns, making effective monitoring critical for taxpayer protection.

How effectively did the full and open competition process ensure the best value was obtained for these IT services?

While full and open competition generally promotes a competitive environment, the T&M pricing model introduces inherent risks to achieving the best value. The effectiveness of the competition hinges on the clarity of the statement of work and the agency's ability to evaluate proposals based on factors beyond just price, such as technical approach and past performance, to mitigate potential cost escalations.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: TFTPMC000874B

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corporation

Address: 3211 JERMANTOWN RD, FAIRFAX, VA, 22030

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $41,967,313

Exercised Options: $41,881,879

Current Obligation: $41,881,879

Actual Outlays: $-10,158

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $4,056,041

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS23F8049H

IDV Type: FSS

Timeline