DHS's $64M IT contract to General Dynamics Information Technology shows fair value with moderate competition

Contract Overview

Contract Amount: $63,985,490 ($64.0M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2014-07-11

End Date: 2019-01-10

Contract Duration: 1,644 days

Daily Burn Rate: $38.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: IGF::OT::IGF IIT ENABLING CAPABILITIES

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20223

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $64.0 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: IGF::OT::IGF IIT ENABLING CAPABILITIES Key points: 1. The contract's value appears reasonable given the duration and scope of IT systems design services. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract was awarded as a delivery order, indicating it was part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle. 4. The duration of the contract (over 4 years) suggests a need for sustained IT support. 5. The services provided fall under computer systems design, a common and essential IT function for federal agencies. 6. The contract was not set aside for small businesses, implying larger prime contractors were involved.

Value Assessment

Rating: fair

The contract's total value of approximately $64 million over nearly five years for IT systems design services appears within a reasonable range for federal contracts of this nature. Benchmarking against similar large-scale IT support contracts for agencies like DHS suggests that the pricing, while not explicitly detailed here, likely reflects market rates for complex system design and integration. The cost-plus-fixed-fee (CPFF) contract type allows for flexibility but requires careful oversight to ensure costs remain controlled and the fixed fee provides incentive for efficiency. Without specific performance metrics or detailed cost breakdowns, a definitive value-for-money assessment is challenging, but the overall expenditure seems aligned with the expected scope of work.

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. The presence of two bidders suggests a moderate level of competition for this significant IT services contract. While two bidders are better than one, a higher number of competitors could potentially drive prices down further and foster greater innovation. The agency's decision to use full and open competition is generally a positive sign for achieving competitive pricing and selecting the best-value solution.

Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it aims to secure the best possible pricing and service quality through a broad bidding process, preventing potential price inflation associated with limited competition.

Public Impact

The U.S. Secret Service benefits from enhanced IT systems design and support, crucial for its protective and investigative missions. Services delivered include computer systems design, contributing to the modernization and efficiency of critical government IT infrastructure. The contract's impact is primarily within the District of Columbia, where the agency's headquarters and key operations are located. The contract supports a workforce skilled in IT systems design and implementation, likely including engineers, developers, and project managers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can sometimes lead to cost overruns if not managed diligently.
The duration of the contract (over 4 years) necessitates ongoing monitoring to ensure continued relevance and value.
Limited competition (2 bidders) might have constrained the potential for achieving the absolute lowest price.
Specific performance metrics and outcomes are not detailed, making it harder to gauge the full impact of the services.

Positive Signals

Awarded under full and open competition, maximizing the pool of potential bidders.
The contract addresses essential IT systems design needs for a critical federal agency.
The fixed fee component of the contract type provides some cost certainty for the agency.
The contract was a delivery order, suggesting it was part of a pre-competed IDIQ vehicle, potentially streamlining the acquisition process.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on computer systems design. The federal IT market is substantial, with agencies consistently investing in upgrading and maintaining their technological infrastructure. Contracts like this are crucial for ensuring that agencies like the U.S. Secret Service have the advanced IT capabilities needed to perform their missions effectively. Comparable spending benchmarks in this area often show significant investments in system integration, software development, and IT consulting services, reflecting the complexity and criticality of federal IT operations.

Small Business Impact

This contract was not specifically set aside for small businesses, nor does the data indicate any explicit subcontracting requirements for small businesses. This suggests that the prime contractor, General Dynamics Information Technology, likely handled the majority of the work. The absence of small business set-asides means that opportunities for small businesses to directly participate in this specific contract may have been limited, though they could potentially be involved as subcontractors if GDIT chose to engage them.

Oversight & Accountability

Oversight for this contract would typically be managed by the U.S. Secret Service contracting officers and program managers. As a cost-plus-fixed-fee contract, rigorous financial oversight is essential to monitor expenditures and ensure compliance with the fixed fee. Transparency is generally facilitated through contract award databases and reporting requirements. While specific Inspector General (IG) involvement isn't detailed, the DHS Office of Inspector General would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

IT Systems Modernization Programs
Computer Systems Design Services
Federal Civilian Agency IT Support Contracts
Department of Homeland Security IT Procurement

Risk Flags

Cost-plus-fixed-fee contract type requires diligent oversight to manage costs.
Contract duration necessitates ongoing performance monitoring.
Limited number of bidders may impact price competitiveness.
Lack of specific performance metrics in summary data hinders detailed value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $64.0 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. IGF::OT::IGF IIT ENABLING CAPABILITIES

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 (U.S. Secret Service).

What is the total obligated amount?

The obligated amount is $64.0 million.

What is the period of performance?

Start: 2014-07-11. End: 2019-01-10.

What was the specific nature of the IT systems designed or improved under this contract?

The contract, NAICS code 541512 (Computer Systems Design Services), indicates that the work involved the design, development, and integration of computer systems. This could encompass a wide range of activities, such as designing new software architectures, integrating disparate IT systems, upgrading network infrastructure, or developing custom applications to meet the U.S. Secret Service's specific operational needs. Without more granular details on the statement of work, it's difficult to pinpoint the exact systems, but it likely supported the agency's core functions related to protection, investigations, and administrative operations.

How does the $64 million contract value compare to similar IT services contracts awarded by DHS or other agencies of similar size?

The $64 million contract value over approximately 4.5 years represents a significant but not extraordinary investment for IT systems design services within a major federal agency like DHS. Large federal IT contracts often range from tens to hundreds of millions of dollars, depending on scope, duration, and complexity. For instance, similar contracts for IT modernization, cybersecurity, or enterprise resource planning systems can easily exceed this amount. Given the critical nature of the U.S. Secret Service's mission, this level of spending for sustained IT support and design appears commensurate with industry standards for comparable federal agencies.

What were the key performance indicators (KPIs) or metrics used to evaluate the success of General Dynamics Information Technology under this contract?

The provided data does not include specific Key Performance Indicators (KPIs) or metrics used to evaluate the contractor's performance. For Cost Plus Fixed Fee (CPFF) contracts, performance is typically assessed against the defined scope of work, adherence to timelines, quality of deliverables, and effective cost management. Agencies usually establish specific metrics related to system uptime, bug resolution rates, project milestones achieved, and user satisfaction. The success of GDIT would have been measured against these unstated but presumably defined performance standards within the contract's statement of work.

What is the historical spending pattern for computer systems design services by the U.S. Secret Service or DHS overall?

Historical spending data for computer systems design services by the U.S. Secret Service or DHS would reveal trends in IT investment. Agencies like DHS consistently allocate substantial portions of their budgets to IT, driven by the need for modernization, cybersecurity, and operational efficiency. Over the years, spending on IT services, including system design, has generally increased across the federal government. Analyzing past contracts would show whether this $64 million award represents a typical investment level, an increase, or a decrease compared to previous periods, reflecting evolving technological requirements and budget priorities.

Were there any identified risks or challenges associated with this contract, and how were they mitigated?

While specific risks are not detailed in the provided data, common challenges with large IT contracts include scope creep, cost overruns (especially with CPFF contracts), technical difficulties, and schedule delays. Mitigation strategies typically involve robust contract management, clear definition of requirements, regular performance reviews, and proactive risk identification and management processes. The agency's oversight would have been crucial in monitoring GDIT's adherence to the contract terms and addressing any emerging issues to ensure successful project completion and value for taxpayer money.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 15036 CONFERENCE CENTER DR, CHANTILLY, VA, 20151

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

Financial Breakdown

Contract Ceiling: $67,394,251

Exercised Options: $63,985,490

Current Obligation: $63,985,490

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $37,195

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS00Q09BGD0055

IDV Type: GWAC

Timeline