General Dynamics IT awarded $66.1M contract for National Flood Insurance Program support by DHS

Contract Overview

Contract Amount: $66,118,673 ($66.1M)

Contractor: General Dynamics Information Technology, Inc

Awarding Agency: Department of Homeland Security

Start Date: 2005-09-30

End Date: 2010-06-26

Contract Duration: 1,730 days

Daily Burn Rate: $38.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Other

Official Description: SUPPORT FOR NFIP

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850, UNITED STATES OF AMERICA

State: Maryland Government Spending

Plain-Language Summary

Department of Homeland Security obligated $66.1 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC for work described as: SUPPORT FOR NFIP Key points: 1. Contract value represents significant investment in critical federal insurance program infrastructure. 2. Competition dynamics suggest a robust bidding process for this essential service. 3. Contract duration of over 4 years indicates a long-term need for these services. 4. Performance-based contract type (Cost Plus Incentive Fee) aims to align contractor incentives with government objectives. 5. Geographic focus on Maryland highlights regional operational presence for this federal agency. 6. The contract falls within the 'All Other Insurance Related Activities' NAICS code, indicating specialized services.

Value Assessment

Rating: good

The contract value of $66.1 million over approximately 4.7 years (1730 days) for IT support to the NFIP appears reasonable given the scope of services. Benchmarking against similar IT support contracts for large federal programs would provide a more precise value-for-money assessment. The Cost Plus Incentive Fee (CPIF) structure suggests an effort to control costs while ensuring performance, which is a positive indicator for value.

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. With 3 bidders participating, the competition level suggests a healthy market interest in providing these services to FEMA. This level of competition is generally favorable for price discovery and achieving competitive pricing.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that is expected to drive down costs and ensure the government receives the best possible value for its investment in essential program support.

Public Impact

Federal Emergency Management Agency (FEMA) benefits through enhanced IT support for the National Flood Insurance Program. Policyholders and communities relying on the NFIP will experience improved program administration and service delivery. The contract supports critical infrastructure for managing flood insurance data and operations. Workforce implications include employment opportunities within General Dynamics Information Technology and its subcontractors, particularly in Maryland.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Incentive Fee contracts if not closely monitored.
Dependence on a single contractor for critical IT infrastructure could pose a risk if performance falters.
Ensuring adequate cybersecurity measures are in place to protect sensitive program data is paramount.

Positive Signals

Awarded through full and open competition, indicating a competitive marketplace.
Use of an incentive fee structure encourages contractor performance and cost efficiency.
Long contract duration suggests stability and a commitment to sustained program support.

Sector Analysis

This contract falls within the broader IT services sector, specifically supporting government administration and insurance-related activities. The National Flood Insurance Program (NFIP) is a significant federal undertaking, and its IT infrastructure requires specialized support. Comparable spending benchmarks for IT support to large federal agencies can range from tens to hundreds of millions of dollars annually, depending on the complexity and scope of services.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. Further analysis would be needed to determine if General Dynamics Information Technology has a robust small business subcontracting plan in place to ensure opportunities for the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Homeland Security and the Federal Emergency Management Agency. Accountability measures are embedded within the Cost Plus Incentive Fee structure, which ties contractor compensation to performance metrics. Transparency is generally facilitated through contract award databases and reporting requirements, though specific performance details may be internal.

Related Government Programs

National Flood Insurance Program
Federal Emergency Management Agency IT Modernization
Department of Homeland Security IT Services

Risk Flags

Potential for cost overruns
Definition of performance metrics for CPIF
Cybersecurity risks

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $66.1 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. SUPPORT FOR NFIP

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 Homeland Security (Federal Emergency Management Agency).

What is the total obligated amount?

The obligated amount is $66.1 million.

What is the period of performance?

Start: 2005-09-30. End: 2010-06-26.

What is the track record of General Dynamics Information Technology, Inc. in supporting federal insurance programs?

General Dynamics Information Technology, Inc. (GDIT) has a substantial track record of providing IT services to various federal agencies, including those in the defense, intelligence, and civilian sectors. Their experience often encompasses large-scale system integration, modernization, and operational support. While specific details on their performance with the National Flood Insurance Program (NFIP) prior to this contract would require deeper investigation, GDIT's general capabilities suggest they are well-equipped to handle complex IT requirements. Their history includes managing significant federal contracts, often involving sensitive data and critical infrastructure, which aligns with the needs of the NFIP. Evaluating past performance on similar contracts, including client satisfaction, adherence to schedules, and budget management, would provide a more comprehensive understanding of their suitability for this role.

How does the awarded amount compare to historical spending on NFIP IT support?

The awarded amount of $66.1 million over approximately 4.7 years represents an average annual expenditure of roughly $14 million for IT support to the National Flood Insurance Program (NFIP). To assess if this is comparable to historical spending, one would need to examine FEMA's IT budgets and contract awards for NFIP support over previous fiscal years. Factors such as program expansion, technological upgrades, and changes in service requirements can influence year-over-year spending. If historical data shows similar or higher annual investments for comparable IT services, this award could be considered within a normal range. Conversely, a significant deviation might warrant further scrutiny into the reasons for the difference, such as increased scope, new technological implementations, or a shift in contracting strategy.

What are the primary risks associated with a Cost Plus Incentive Fee (CPIF) contract for IT services?

Cost Plus Incentive Fee (CPIF) contracts, while designed to incentivize performance and cost control, carry inherent risks. A primary risk is the potential for cost overruns if the target cost is set too high or if unforeseen technical challenges arise that significantly increase expenses. The government may end up paying more than anticipated if the contractor achieves performance targets but incurs higher costs. Another risk is the complexity of defining and measuring performance metrics; if these are poorly defined or difficult to quantify, the incentive aspect may be ineffective or lead to disputes. Furthermore, the government bears a significant portion of the cost risk, as the contractor is reimbursed for allowable costs plus a fee that can be adjusted based on performance. Effective oversight and robust negotiation of the target cost and incentive structure are crucial to mitigate these risks.

How effective is full and open competition in ensuring value for money for IT support contracts of this nature?

Full and open competition is generally considered the most effective method for ensuring value for money in government contracting, especially for IT services. By allowing all responsible sources to bid, the government maximizes the pool of potential offerors, thereby increasing the likelihood of receiving competitive proposals that offer the best combination of price, technical approach, and past performance. In this case, with three bidders, the competition likely drove down prices and encouraged innovative solutions. The government can then rigorously evaluate proposals against defined criteria to select the offer that provides the greatest overall value. While effective competition requires clear requirements and a fair evaluation process, it fundamentally creates a market dynamic that benefits taxpayers by pushing contractors to offer their best terms.

What are the potential implications of this contract on the broader IT services market for federal agencies?

This contract award to General Dynamics Information Technology, Inc. (GDIT) for supporting the National Flood Insurance Program (NFIP) has several implications for the broader IT services market serving federal agencies. Firstly, it reinforces GDIT's position as a major player in the federal IT contracting space, particularly within agencies like Homeland Security. Secondly, the focus on insurance-related IT activities highlights a specialized niche within the federal IT market that attracts significant investment. Thirdly, the use of a Cost Plus Incentive Fee (CPIF) contract may influence how other agencies structure their IT procurements, potentially encouraging similar performance-based incentive approaches. Finally, the competition among three bidders suggests a healthy, albeit potentially concentrated, market for these types of specialized IT services, which could encourage other firms to develop similar capabilities to compete for future contracts.

Industry Classification

NAICS: Finance and Insurance › Agencies, Brokerages, and Other Insurance Related Activities › All Other Insurance Related Activities

Product/Service Code: SOCIAL SERVICES › SOCIAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HSFEHQ05R0012

Offers Received: 3

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Computer Sciences Corporation (UEI: 009581091)

Address: 15245 SHADY GROVE RD, STE-200, ROCKVILLE, MD, 20850

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

Financial Breakdown

Contract Ceiling: $148,951,312

Exercised Options: $117,691,485

Current Obligation: $66,118,673

Timeline