DHS awards $24.9M for USCIS IT sustainment, raising questions on competition and value

Contract Overview

Contract Amount: $24,874,094 ($24.9M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2008-03-28

End Date: 2008-10-31

Contract Duration: 217 days

Daily Burn Rate: $114.6K/day

Competition Type: NON-COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: OTHER (APPLIES TO AWARDS WHERE NONE OF THE ABOVE APPLY)

Sector: IT

Official Description: USCIS IT SUSTAINMENT OF IT LEGACY APPLICATIONS

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20001

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $24.9 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: USCIS IT SUSTAINMENT OF IT LEGACY APPLICATIONS Key points: 1. Contract awarded on a non-competitive basis, limiting price discovery and potentially increasing costs. 2. Significant duration of the contract (217 days) for sustainment services. 3. Focus on legacy application sustainment suggests potential for technical debt and higher maintenance costs. 4. The award represents a small portion of overall DHS IT spending, but its non-competitive nature warrants scrutiny. 5. Lack of competition may indicate limited market availability for specialized legacy system support. 6. Performance context is crucial to understand if the awarded price reflects fair market value for sustainment.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its non-competitive nature and the specific focus on legacy IT sustainment. Without comparable bids, it's difficult to definitively assess if the $24.9 million represents a fair market price. The cost per day is approximately $114,627, which appears high without further context on the complexity and criticality of the systems supported. Further analysis would require understanding the scope of services and the specific legacy applications being sustained.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a non-competitive delivery order, meaning it was not openly competed. This approach is typically used when only one source is capable of meeting the requirement, or in situations where urgency or specific circumstances preclude full and open competition. The lack of multiple bidders means there was no direct price comparison or negotiation leverage derived from a competitive bidding process, which can lead to higher costs for the government.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure to drive down costs. The government did not benefit from the potential for innovative solutions or cost savings that often emerge from a competitive environment.

Public Impact

USCIS benefits from the continued operation and sustainment of its critical IT legacy applications, ensuring continuity of essential government services. The services delivered are focused on maintaining existing IT infrastructure, supporting the operational backbone of USCIS. Geographic impact is primarily within the District of Columbia, where the contractor is located and likely where services are managed. Workforce implications include the potential for specialized IT professionals to be engaged in maintaining older systems, rather than developing new ones.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Non-competitive award limits transparency and potential cost savings.
Focus on legacy systems may indicate aging infrastructure and potential future upgrade costs.
High daily cost ($114,627) warrants scrutiny without clear performance metrics or comparable bids.
Limited contract duration (217 days) may lead to frequent re-solicitations and associated administrative burden.

Positive Signals

Ensures continuity of essential USCIS IT operations through sustainment of legacy applications.
Contract awarded to a known entity (General Dynamics Information Technology, Inc.) which may imply existing familiarity and expertise.
Specific focus on sustainment addresses immediate operational needs for critical systems.

Sector Analysis

The IT services sector, particularly for government contracts, is highly competitive. However, contracts focused on the sustainment of legacy systems can present unique challenges, as fewer vendors may possess the specialized knowledge and experience required. The market for such services can be niche, and the size of this contract ($24.9 million) is moderate within the broader IT services landscape. Comparable spending benchmarks for legacy IT sustainment vary widely based on system complexity and criticality.

Small Business Impact

This contract was not awarded to a small business, nor does it appear to have specific small business set-aside provisions. The prime contractor, General Dynamics Information Technology, Inc., is a large business. There is no explicit information provided regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, unless the prime contractor voluntarily engages small businesses for specialized support.

Oversight & Accountability

Oversight for this contract would fall under the Department of Homeland Security's internal procurement and program management offices. As a delivery order under a larger contract vehicle, the oversight mechanisms would be tied to the terms of that vehicle. Transparency is limited due to the non-competitive nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

USCIS IT Modernization Efforts
DHS Legacy System Support Contracts
Federal IT Sustainment Services
General Dynamics IT Contracts

Risk Flags

Non-competitive award
Potential for cost overruns due to lack of competition
Focus on legacy systems may indicate technical debt
Limited transparency in pricing and service delivery

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $24.9 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. USCIS IT SUSTAINMENT OF IT LEGACY APPLICATIONS

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 (Office of Procurement Operations).

What is the total obligated amount?

The obligated amount is $24.9 million.

What is the period of performance?

Start: 2008-03-28. End: 2008-10-31.

What is the track record of General Dynamics Information Technology, Inc. with USCIS and DHS for similar IT sustainment services?

General Dynamics Information Technology, Inc. (GDIT) has a substantial history of contracting with various U.S. government agencies, including the Department of Homeland Security (DHS) and its components like U.S. Citizenship and Immigration Services (USCIS). Their portfolio often includes a wide range of IT services, from infrastructure management and cybersecurity to application development and sustainment. For USCIS and DHS specifically, GDIT has been involved in numerous contracts supporting critical systems. Their track record typically demonstrates the capacity to handle large-scale IT operations. However, the specific performance on legacy application sustainment contracts, especially those awarded non-competitively, would require a deeper dive into past performance evaluations and any associated contract disputes or awards. Without access to detailed performance metrics for this specific contract or similar ones, it's difficult to provide a definitive assessment beyond their general capacity as a large federal IT contractor.

How does the awarded price of $24.9 million for 217 days compare to industry benchmarks for IT legacy application sustainment?

The awarded price of $24.9 million translates to a daily cost of approximately $114,627. Benchmarking this figure for IT legacy application sustainment is complex due to several factors. Legacy systems often require specialized expertise, and the criticality of the applications can significantly influence pricing. Furthermore, the scope of 'sustainment' can vary widely, encompassing maintenance, patching, minor enhancements, and operational support. Without a detailed statement of work (SOW) outlining the specific applications, their complexity, the required service levels, and the personnel involved, a direct comparison to industry benchmarks is speculative. However, for context, large-scale enterprise IT support contracts can range from tens of thousands to hundreds of thousands of dollars per day, depending on the services and scale. The non-competitive nature of this award further complicates direct value assessment, as market forces that typically drive down prices were absent.

What are the primary risks associated with sustaining legacy IT applications for a federal agency like USCIS?

Sustaining legacy IT applications presents several significant risks for federal agencies. A primary risk is **technical obsolescence**: the underlying technology may no longer be supported by vendors, leading to security vulnerabilities and difficulty finding compatible hardware or software. **Security vulnerabilities** are heightened as older systems may lack modern security features and be more susceptible to cyberattacks. **High maintenance costs** are common, as specialized knowledge is required to maintain outdated systems, and the lack of vendor support can drive up costs for internal resources or third-party contractors. **Integration challenges** arise when trying to connect legacy systems with modern applications, potentially hindering data flow and operational efficiency. **Workforce attrition** is another risk, as experienced personnel who understand the legacy systems may retire or move on, making knowledge transfer difficult. Finally, **lack of agility** is a major concern; legacy systems are often rigid and difficult to modify, slowing down the agency's ability to adapt to changing requirements or implement new capabilities.

What is the potential impact of this contract on USCIS's long-term IT modernization strategy?

This contract, focused on sustaining legacy IT applications, could have a mixed impact on USCIS's long-term IT modernization strategy. On one hand, it ensures the continued operation of essential systems, providing stability and preventing disruptions that could derail modernization efforts. By maintaining the status quo for critical legacy functions, it allows USCIS to allocate resources and focus on developing and implementing new, modern systems. However, there's a risk that prolonged reliance on sustainment contracts for legacy systems could inadvertently delay or deprioritize modernization. If sustainment becomes the primary focus, it might divert funding, personnel, and attention away from strategic initiatives aimed at replacing outdated infrastructure with more agile, cloud-native, or modern solutions. The non-competitive nature of this award also raises questions about whether it represents the most cost-effective approach, potentially consuming funds that could otherwise be invested in modernization.

Given the non-competitive nature, what oversight mechanisms are in place to ensure accountability and prevent cost overruns?

When a contract is awarded non-competitively, robust oversight mechanisms become even more critical to ensure accountability and prevent cost overruns. For this USCIS IT sustainment contract, oversight would primarily be managed by the contracting officers and program managers within the Department of Homeland Security (DHS). These officials are responsible for monitoring the contractor's performance against the contract's requirements and deliverables. Key oversight activities would include regular progress reviews, performance evaluations, and audits of contractor expenditures. The contract likely includes clauses requiring detailed reporting on work performed and costs incurred. Furthermore, DHS's Inspector General's office provides an independent layer of oversight, empowered to investigate potential fraud, waste, and abuse. However, the effectiveness of these mechanisms hinges on the diligence of the contracting agency and the transparency provided by the contractor, which can be more challenging to enforce in a sole-source environment.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Facilities Management Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: NON-COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HSHQDC-08-R-00048

Offers Received: 1

Pricing Type: OTHER (APPLIES TO AWARDS WHERE NONE OF THE ABOVE APPLY) (3)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 4151 LAFAYETTE CENTER DR STE 700, CHANTILLY, VA, 20151

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $24,874,094

Exercised Options: $24,874,094

Current Obligation: $24,874,094

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HSHQDC06D00021

IDV Type: IDC

Timeline