DHS awards $97.2M IT contract to General Dynamics for FEMA's National Flood Insurance Program

Contract Overview

Contract Amount: $97,205,551 ($97.2M)

Contractor: General Dynamics Information Technology Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2010-06-27

End Date: 2025-05-16

Contract Duration: 5,437 days

Daily Burn Rate: $17.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: IT LEGACY SYSTEM TO SUPPORT FEMA NATIONAL FLOOD INSURANCE PROGRAM

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20472

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $97.2 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY INC. for work described as: IT LEGACY SYSTEM TO SUPPORT FEMA NATIONAL FLOOD INSURANCE PROGRAM Key points: 1. Contract awarded on a sole-source basis, raising questions about potential cost efficiencies. 2. Long contract duration of over 15 years suggests a need for sustained support. 3. The 'Other Computer Related Services' NAICS code indicates a broad scope of work. 4. Cost-plus-fixed-fee contract type may incentivize cost overruns if not closely managed. 5. The contract's value is substantial, requiring robust oversight to ensure taxpayer value. 6. No small business set-aside was applied, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its long duration and specific IT support nature for a critical program. The cost-plus-fixed-fee structure necessitates careful monitoring to ensure costs remain reasonable and do not escalate beyond initial projections. Without competitive bids, it's difficult to definitively assess if the pricing represents optimal value for money compared to market alternatives. However, the sustained funding over many years indicates the critical nature of the IT support for the NFIP.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This approach is typically used when only one vendor possesses the necessary specialized skills, technology, or when urgency dictates a rapid award. The lack of competition means that price discovery through market forces was bypassed, potentially leading to higher costs than if multiple vendors had bid.

Taxpayer Impact: Sole-source awards can mean taxpayers may not benefit from the cost savings typically achieved through competitive bidding processes. This necessitates a higher degree of scrutiny on the awarded price and contractor performance.

Public Impact

Provides essential IT infrastructure support for the National Flood Insurance Program (NFIP), a critical government service. Ensures the continuity of operations for a program that provides flood insurance to millions of Americans. Supports the administrative and operational functions of FEMA, enhancing disaster preparedness and response capabilities. The contract's impact is national, affecting policyholders and communities across the United States. Maintains the IT systems that manage flood insurance policies, claims, and risk data.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Long contract duration increases risk of cost escalation and vendor lock-in.
Cost-plus-fixed-fee structure can incentivize higher spending if not managed tightly.
Lack of small business participation may limit innovation and broader economic impact.

Positive Signals

Supports a critical national program (NFIP) ensuring continuity of essential services.
General Dynamics Information Technology Inc. is a large, established contractor with significant experience.
The contract aims to provide sustained IT support, indicating a strategic long-term investment.
The definitive contract award provides a clear framework for service delivery.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on IT legacy system support. The market for IT services to government agencies is substantial, with significant spending allocated to maintaining and modernizing existing systems. This contract represents a portion of the broader federal IT spending, which often prioritizes continuity of operations for critical infrastructure and programs like the NFIP. Comparable spending benchmarks would typically involve analyzing other large, long-term IT support contracts awarded to system integrators.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. This means that opportunities for small businesses to participate in this significant IT support contract are limited. The absence of a small business focus could mean that the full benefits of small business innovation and agility in the IT sector are not being leveraged for this particular contract, and it may not contribute significantly to the broader small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Homeland Security (DHS) and the Federal Emergency Management Agency (FEMA). As a sole-source, cost-plus-fixed-fee contract, rigorous oversight is crucial to monitor expenditures, ensure performance meets requirements, and prevent cost overruns. Transparency would be enhanced through regular reporting requirements and potentially through the DHS Office of Inspector General (OIG) if specific concerns arise regarding waste, fraud, or abuse. The long duration necessitates continuous performance evaluation.

Related Government Programs

FEMA National Flood Insurance Program IT Modernization
DHS IT Infrastructure Support Contracts
Federal Legacy System Modernization Efforts
Government IT Services and Support
Disaster Management IT Systems

Risk Flags

Sole-source award
Long contract duration
Cost-plus-fixed-fee contract type
Lack of small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $97.2 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY INC.. IT LEGACY SYSTEM TO SUPPORT FEMA NATIONAL FLOOD INSURANCE PROGRAM

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 $97.2 million.

What is the period of performance?

Start: 2010-06-27. End: 2025-05-16.

What is the historical spending trend for IT support of the National Flood Insurance Program?

Historical spending data for IT support specifically tied to the National Flood Insurance Program (NFIP) prior to this $97.2 million contract is not detailed in the provided information. However, the award of a long-term, definitive contract suggests a consistent and ongoing need for IT services to manage the program's complex systems. Federal IT spending, in general, has been substantial, with significant portions allocated to maintaining legacy systems. The NFIP, being a critical and long-standing program, likely has a history of sustained IT investment. Further analysis would require accessing FEMA's historical budget allocations and contract databases to trace past expenditures on similar IT support services.

How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for similar IT legacy system support?

The Cost-Plus-Fixed-Fee (CPFF) contract type, used here, is common for complex IT projects where the scope may evolve or is not fully defined at the outset. It allows the contractor to recover all allowable costs plus a predetermined fixed fee representing profit. Compared to fixed-price contracts, CPFF offers more flexibility but can lead to higher costs if not managed diligently, as the government bears the risk of cost overruns. Other contract types like Firm-Fixed-Price (FFP) offer greater cost certainty for the government but are less suitable for undefined scopes. Indefinite-Delivery/Indefinite-Quantity (IDIQ) contracts offer flexibility in task orders. For legacy system support, CPFF can be justified if the nature of the support is highly variable or requires extensive research and development, but it necessitates robust government oversight to control costs.

What are the key performance indicators (KPIs) used to measure the success of this contract?

Specific Key Performance Indicators (KPIs) for this contract are not detailed in the provided data. However, for IT legacy system support contracts, typical KPIs often include system uptime and availability, response times for issue resolution, successful completion of maintenance tasks, adherence to security protocols, and timely delivery of any required system updates or enhancements. For a critical program like the National Flood Insurance Program (NFIP), metrics related to data integrity, processing accuracy for policies and claims, and the overall reliability of the IT infrastructure supporting these functions would be paramount. The contract's performance would likely be evaluated against these or similar metrics throughout its duration.

What is General Dynamics Information Technology Inc.'s track record with FEMA and similar large-scale IT contracts?

General Dynamics Information Technology Inc. (GDIT) is a major federal IT contractor with a substantial history of supporting various government agencies, including the Department of Homeland Security (DHS) and its components like FEMA. GDIT has experience managing large, complex IT infrastructure and services contracts across different domains. While specific details of their past performance with FEMA on the National Flood Insurance Program (NFIP) are not provided here, their general profile suggests they possess the scale and expertise required for such a long-term, critical support role. A thorough assessment would involve reviewing past performance evaluations, contract awards, and any documented issues or successes from previous engagements with FEMA or comparable agencies.

What are the potential risks associated with the sole-source award and long duration of this contract?

The sole-source award presents a primary risk of potentially higher costs due to the lack of competitive bidding, which limits price discovery and negotiation leverage for the government. The extended duration (over 15 years) increases the risk of vendor lock-in, making it difficult and costly to switch providers if performance degrades or market alternatives become significantly more advantageous. Furthermore, long-term contracts for IT systems can face challenges in adapting to rapidly evolving technologies, potentially leading to outdated solutions or the need for costly modifications. There's also a risk that the fixed fee may not adequately account for unforeseen complexities or scope creep over such a long period, potentially leading to disputes or requests for contract modifications.

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 › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HSFEHQ-10-Q-3001

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 3160 FAIRVIEW PARK DR, 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: $189,415,876

Exercised Options: $189,415,876

Current Obligation: $97,205,551

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline