DoD's $20M CGI Federal contract for enterprise funds distribution support shows fair value with 1 bid

Contract Overview

Contract Amount: $20,069,945 ($20.1M)

Contractor: CGI Federal Inc.

Awarding Agency: Department of Defense

Start Date: 2022-08-01

End Date: 2026-07-31

Contract Duration: 1,460 days

Daily Burn Rate: $13.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ENTERPRISE FUNDS DISTRIBUTION OPERATIONS SUSTAINMENT SUPPORT

Place of Performance

Location: FAIRFAX, FAIRFAX County, VIRGINIA, 22033

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $20.1 million to CGI FEDERAL INC. for work described as: ENTERPRISE FUNDS DISTRIBUTION OPERATIONS SUSTAINMENT SUPPORT Key points: 1. The contract's value appears reasonable given the scope of enterprise-wide financial operations support. 2. Limited competition (one bid) raises questions about optimal price discovery for taxpayer funds. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. Performance is benchmarked against similar IT support contracts for federal agencies. 5. This contract falls within the IT services sector, specifically focusing on financial systems. 6. The duration of the contract suggests a need for sustained, critical operational support.

Value Assessment

Rating: good

The contract value of approximately $20 million over four years for enterprise funds distribution operations sustainment support appears to be within a reasonable range for similar large-scale IT service contracts. While a direct per-unit cost comparison is difficult without more granular service details, the overall price seems competitive, especially considering the critical nature of financial operations. Benchmarking against other contracts for similar sustainment and operational support services for federal financial systems suggests this pricing is fair.

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 bids. However, only one bid was received. This limited number of bidders suggests potential challenges in the market or the specific requirements of the solicitation, which could impact the government's ability to secure the most competitive pricing. Further analysis into the solicitation's complexity and market research would be beneficial.

Taxpayer Impact: While full and open competition was intended, the receipt of only one bid means taxpayers may not have benefited from the full spectrum of competitive pricing that a more robust bidding process could have yielded.

Public Impact

The Department of Defense benefits from sustained operational support for its critical funds distribution systems. This contract ensures the continuity of essential financial operations, impacting military personnel and departmental efficiency. The services delivered are crucial for the accurate and timely disbursement of funds. The primary geographic impact is within the Department of Defense's operational footprint, with potential national security implications.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have resulted in a higher price than if multiple bids were received.
The long contract duration could lead to vendor lock-in if not managed carefully.
Reliance on a single vendor for critical financial operations presents a potential single point of failure risk.

Positive Signals

The firm fixed-price contract type provides cost certainty and limits the government's exposure to cost overruns.
The contract is awarded to CGI Federal, a known entity in government IT services, suggesting a degree of established capability.
The contract duration of nearly four years indicates a stable, long-term need for these services, allowing for consistent support.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on IT services and support for financial systems. The market for enterprise resource planning (ERP) and financial management systems support is substantial within the federal government, with numerous contracts awarded annually for sustainment, modernization, and operational support. Comparable spending benchmarks for similar large-scale IT sustainment contracts for federal agencies often range from tens to hundreds of millions of dollars over several years, depending on the complexity and scope of the systems supported.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the nature of enterprise-level IT support for complex financial systems, it is common for such contracts to be awarded to large prime contractors. However, the prime contractor, CGI Federal, may engage small businesses as subcontractors to fulfill specific aspects of the contract, contributing to the small business ecosystem. Further review of subcontracting plans would be necessary to assess the direct impact on small businesses.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Finance and Accounting Service (DFAS) within the Department of Defense. Accountability measures would be embedded in the contract's performance work statement (PWS), including defined deliverables, service level agreements (SLAs), and reporting requirements. Transparency is generally maintained through contract award databases and public reporting, though specific performance metrics may be internal. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

DoD Financial Management Systems
Enterprise Resource Planning (ERP) Support
IT Services for Federal Agencies
Defense Financial Systems Sustainment
Government IT Operations Support

Risk Flags

Limited competition (one bid)
Potential for higher costs due to lack of competition
Reliance on a single vendor for critical financial operations

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.1 million to CGI FEDERAL INC.. ENTERPRISE FUNDS DISTRIBUTION OPERATIONS SUSTAINMENT SUPPORT

Who is the contractor on this award?

The obligated recipient is CGI FEDERAL INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Finance and Accounting Service).

What is the total obligated amount?

The obligated amount is $20.1 million.

What is the period of performance?

Start: 2022-08-01. End: 2026-07-31.

What is CGI Federal's track record with similar large-scale IT sustainment contracts within the Department of Defense or other federal agencies?

CGI Federal has a significant track record of providing IT services and sustainment support to various federal agencies, including the Department of Defense. They are known for their work on enterprise resource planning (ERP) systems, financial management solutions, and other critical IT infrastructure. Past performance reviews and contract databases often show CGI Federal as a prime contractor on numerous large-value contracts. While specific details of past performance on similar funds distribution operations sustainment contracts would require deeper investigation into individual contract histories and performance evaluations, their general presence and experience in this domain suggest a baseline capability. However, it is crucial to examine specific contract performance metrics, any past issues or disputes, and client feedback to fully assess their suitability and reliability for this particular requirement.

How does the $20 million contract value compare to similar enterprise funds distribution sustainment contracts awarded by other federal agencies?

Comparing the $20 million contract value for enterprise funds distribution operations sustainment support requires careful consideration of contract scope, duration, and the specific services provided. Federal agencies often procure similar services, but contract values can vary significantly based on the size and complexity of the agency's financial systems, the number of users supported, and the specific functionalities required. For a nearly four-year contract supporting enterprise-wide operations, $20 million suggests an average annual value of approximately $5 million. This figure appears reasonable when benchmarked against other large-scale IT sustainment contracts for federal financial systems, which can range from a few million to tens of millions of dollars annually. However, a precise comparison would necessitate analyzing the detailed scope of work, service level agreements, and the specific technologies involved in this contract against comparable procurements.

What are the primary risks associated with a sole bid received under full and open competition for this contract?

The primary risk associated with receiving only one bid under full and open competition is the potential for suboptimal price discovery and reduced competitive pressure. This situation can lead to the government paying a higher price than might have been achieved if multiple bidders had competed. It also raises concerns about whether the solicitation's requirements were too restrictive, the market research was inadequate, or if there are systemic issues within the industry that limit the number of capable bidders for such critical services. Furthermore, a single bidder might have less incentive to innovate or provide exceptional service, as the government has limited alternative options. This could also indicate potential challenges in the market's ability to meet the specific technical or security requirements of the contract, increasing the risk of performance issues if the sole bidder falters.

What are the key performance indicators (KPIs) likely being used to measure the success of this enterprise funds distribution operations sustainment support contract?

Key performance indicators (KPIs) for this contract would likely focus on the reliability, efficiency, and security of the enterprise funds distribution operations. Common KPIs would include system uptime and availability, ensuring the funds distribution systems are consistently operational. Response times for critical system functions and issue resolution times for any reported problems would also be crucial. Data accuracy and integrity within the financial systems are paramount, so metrics related to error rates in fund disbursement and reconciliation would be tracked. Security compliance, adherence to relevant regulations (e.g., FISMA), and successful completion of audits would also be vital. Furthermore, metrics related to user satisfaction and the contractor's adherence to service level agreements (SLAs) defined in the Performance Work Statement (PWS) would be used to gauge overall performance and value.

How has historical spending on enterprise funds distribution operations sustainment support evolved within the Department of Defense over the past five years?

Analyzing historical spending trends for enterprise funds distribution operations sustainment support within the Department of Defense (DoD) requires access to detailed budget and contract data. Generally, spending in this area tends to be stable or gradually increasing, reflecting the ongoing need to maintain and update complex financial systems that support vast military operations. Factors influencing spending include the modernization of financial systems, cybersecurity enhancements, and the overall scale of DoD operations. While specific figures for 'enterprise funds distribution operations sustainment support' might not be a distinct budget line item, it falls under broader IT services and financial management system support categories. Trends in these broader categories often show consistent investment, with potential upticks during major system upgrades or significant shifts in operational requirements. Without access to specific historical contract awards and budget allocations for this precise service category, a precise trend analysis is challenging, but the consistent need for reliable financial operations suggests sustained or growing expenditure.

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 › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HQ042322Q0052

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 12601 FAIR LAKES CIR # 100, FAIRFAX, VA, 22033

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

Financial Breakdown

Contract Ceiling: $25,349,719

Exercised Options: $20,069,945

Current Obligation: $20,069,945

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS35F281DA

IDV Type: FSS

Timeline