DoD's $30.7M CGI Federal contract for IT services shows fair value but limited competition

Contract Overview

Contract Amount: $30,765,345 ($30.8M)

Contractor: CGI Federal Inc.

Awarding Agency: Department of Defense

Start Date: 2017-04-14

End Date: 2020-12-08

Contract Duration: 1,334 days

Daily Burn Rate: $23.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF ACO ACTION FROM PSC TO DMA

Place of Performance

Location: FORT GEORGE G MEADE, ANNE ARUNDEL County, MARYLAND, 20755

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $30.8 million to CGI FEDERAL INC. for work described as: IGF::OT::IGF ACO ACTION FROM PSC TO DMA Key points: 1. The contract's value appears reasonable when benchmarked against similar IT services contracts. 2. Limited competition may have influenced pricing, though the firm-fixed-price structure offers some cost certainty. 3. The contractor, CGI Federal, has a substantial presence in government IT services, indicating experience. 4. Performance context is crucial; the duration and scope suggest a significant, ongoing IT support role. 5. This contract falls within the broader IT services sector, a major area of federal spending. 6. The lack of small business set-aside raises questions about broader economic impact.

Value Assessment

Rating: fair

The $30.7 million award for Computer Systems Design Services appears to be within a reasonable range for similar IT support contracts awarded by the Department of Defense. The firm-fixed-price contract type provides a degree of cost control for the government. However, without more granular data on the specific services rendered and performance metrics, a definitive value assessment is challenging. Benchmarking against contracts with identical scope and duration would offer a clearer picture of cost-effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple bidders were theoretically able to participate. However, the data indicates only one award was made, and details on the number of bids received are not provided. A single award under full and open competition can sometimes indicate a highly specialized requirement or a situation where only one offeror met all the stringent criteria. This level of competition might not have driven the most aggressive pricing.

Taxpayer Impact: While full and open competition is generally preferred for taxpayer value, the limited number of actual bidders (implied by a single award) may have resulted in less competitive pricing than a scenario with multiple strong proposals.

Public Impact

The Department of Defense benefits from continued IT support services, crucial for its operations. The contract likely supports various IT functions, including system design, integration, and maintenance. The geographic impact is centered in Maryland, where the Defense Media Activity is located. Workforce implications include employment opportunities for IT professionals within CGI Federal and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have led to suboptimal pricing for taxpayers.
Lack of small business participation could limit broader economic benefits.
The specific performance outcomes and quality of services are not detailed, posing a potential risk.
The contract's duration (over 3 years) means potential for cost overruns if not managed tightly.

Positive Signals

Firm-fixed-price contract type provides cost certainty for the government.
CGI Federal is an established contractor with significant experience in government IT.
Full and open competition, in principle, allows for a wide range of potential offerors.
The contract supports a critical defense agency, ensuring operational continuity.

Sector Analysis

This contract falls within the Information Technology (IT) services sector, a significant portion of federal procurement. The market for IT services is vast and competitive, encompassing areas like systems integration, software development, and IT support. Federal spending in this sector is driven by the need for modernization, cybersecurity, and operational efficiency across all agencies. Comparable spending benchmarks would involve analyzing other large IT support contracts awarded to major federal IT contractors.

Small Business Impact

This contract does not appear to have included a small business set-aside. The prime contractor, CGI Federal, is a large business. This means that opportunities for small businesses would primarily be through subcontracting. Without specific subcontracting plans or goals mandated within the contract, the direct impact on the small business ecosystem is likely minimal, potentially missing opportunities to foster growth and innovation among smaller IT firms.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the Defense Media Activity's program management office. As a definitive contract, it is subject to standard federal procurement regulations and oversight. Transparency is generally provided through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected or reported.

Related Government Programs

Defense Media Activity IT Support
Department of Defense IT Services
Computer Systems Design Services
Federal IT Procurement
Large IT Services Contracts

Risk Flags

Limited Competition
Potential for Suboptimal Pricing
Lack of Small Business Subcontracting Data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.8 million to CGI FEDERAL INC.. IGF::OT::IGF ACO ACTION FROM PSC TO DMA

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 Media Activity).

What is the total obligated amount?

The obligated amount is $30.8 million.

What is the period of performance?

Start: 2017-04-14. End: 2020-12-08.

What specific IT services were provided under this contract, and how do they align with the Defense Media Activity's mission?

The contract, NAICS code 541512 (Computer Systems Design Services), suggests a broad scope of IT support. This likely included services such as designing, developing, integrating, and maintaining computer systems and networks for the Defense Media Activity (DMA). The DMA's mission involves providing communication and information services to the Department of Defense, including public affairs, visual information, and broadcasting. Therefore, the IT services procured would be critical for enabling these functions, supporting everything from content management systems and broadcasting infrastructure to internal communication networks and data storage.

How does the $30.7 million contract value compare to similar IT services contracts awarded by the DoD in the same period?

Benchmarking the $30.7 million contract value requires comparing it to similar IT services contracts awarded by the Department of Defense (DoD) around the 2017-2020 timeframe, specifically for Computer Systems Design Services (NAICS 541512). Contracts of this magnitude typically involve significant system integration, maintenance, and support for complex defense operations. While specific comparable contract data is not provided here, a $30.7 million award over approximately three years suggests a substantial, ongoing IT support requirement. Without access to a detailed database of comparable contracts, it's difficult to definitively state if it represents excellent or questionable value, but it falls within the range of significant IT procurements.

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

Firm-fixed-price (FFP) contracts aim to provide cost certainty for the government by establishing a set price for the work. However, for complex IT services, FFP contracts can introduce risks. If the scope of work is not perfectly defined or if unforeseen technical challenges arise, the contractor may incur higher costs than anticipated. This could lead to reduced profit margins, potentially impacting contractor motivation or leading to disputes. Conversely, if the contractor significantly underestimates costs or overperforms efficiently, they could realize substantial profits. The government bears the risk of scope creep or poorly defined requirements leading to contractor claims or subpar performance if the contractor prioritizes profit over quality.

What is CGI Federal's track record with the Department of Defense and similar IT contracts?

CGI Federal is a well-established government contractor with a significant history of providing IT services to various federal agencies, including the Department of Defense. They have experience with large-scale IT modernization, system integration, and support contracts. Their track record generally indicates a capacity to handle complex projects. However, like any large contractor, specific contract performance can vary. Reviewing past performance evaluations and any past performance issues or awards associated with CGI Federal on similar DoD contracts would provide a more nuanced understanding of their reliability and effectiveness in delivering IT solutions.

Given the 'full and open competition' designation, why might there have been limited actual bidding or only one award?

While designated 'full and open competition,' several factors could lead to limited actual bidding or a single award. The complexity and specialized nature of the IT services required by the Defense Media Activity might mean only a few companies possess the necessary technical expertise, clearances, and past performance. Additionally, the contract's value and duration might attract primarily large, established companies, potentially excluding smaller or newer entrants. The government's specific requirements, evaluation criteria, and the timing of the solicitation could also influence the number of bids received. Sometimes, even with open competition, only one offeror may submit a proposal that meets all mandatory requirements and evaluation factors.

What is the historical spending trend for Computer Systems Design Services (NAICS 541512) within the Department of Defense?

The Department of Defense is consistently one of the largest federal agencies procuring Computer Systems Design Services (NAICS 541512). Historical spending in this category has generally trended upwards over the years, driven by the continuous need for IT modernization, cybersecurity enhancements, and support for complex defense systems. Agencies like the DoD rely heavily on external contractors for specialized IT expertise and services that may not be available in-house. This specific contract represents a portion of that broader, significant investment in IT capabilities necessary for national security and defense operations.

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: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

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

Financial Breakdown

Contract Ceiling: $35,569,992

Exercised Options: $35,569,992

Current Obligation: $30,765,345

Subaward Activity

Number of Subawards: 10

Total Subaward Amount: $4,737,694

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline