DHS's $125.5M IT Infrastructure Support Contract Awarded to General Dynamics Faces Scrutiny for Value and Competition

Contract Overview

Contract Amount: $125,550,331 ($125.6M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2010-09-01

End Date: 2015-08-31

Contract Duration: 1,825 days

Daily Burn Rate: $68.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIXED PRICE AWARD FEE

Sector: IT

Official Description: INFORMATION TECHNOLOGY INFRASTRUCTURE PROGRAM SUPPORT SERVICES

Place of Performance

Location: ARLINGTON, LOUDOUN County, VIRGINIA, 20598

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $125.6 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: INFORMATION TECHNOLOGY INFRASTRUCTURE PROGRAM SUPPORT SERVICES Key points: 1. The contract's value proposition is assessed against industry benchmarks and similar government IT support services. 2. Competition dynamics are analyzed to understand the impact of a full and open bidding process on pricing. 3. Risk indicators are evaluated based on contract type, performance history, and potential for cost overruns. 4. Performance context is provided by comparing this award to other IT infrastructure support contracts within DHS and across the federal government. 5. The contract is positioned within the broader IT services sector, considering market trends and typical contract values. 6. The fixed-price award fee structure is examined for its effectiveness in incentivizing performance and controlling costs.

Value Assessment

Rating: fair

The total value of $125.5 million over five years for IT infrastructure support services appears within a reasonable range for a contract of this scope and duration. However, a detailed benchmark against comparable contracts for similar services, particularly those with fixed-price award fee structures, is necessary to definitively assess value for money. The absence of specific performance metrics and award fee payouts makes a precise value assessment challenging without further data. The contractor's historical performance on similar contracts would also be a key factor in determining if the price reflects good value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that multiple bidders were likely solicited and considered. The presence of three bidders suggests a degree of competition, which generally aids in price discovery and can lead to more favorable pricing for the government. However, the specific number of proposals received and the evaluation criteria used are not detailed, making it difficult to fully assess the intensity of the competition and its impact on the final award price.

Taxpayer Impact: A full and open competition is generally beneficial for taxpayers as it promotes a competitive environment that can drive down costs and encourage innovation. This approach increases the likelihood that the government secures services at a fair market price.

Public Impact

The primary beneficiaries are the Department of Homeland Security (DHS) and its Transportation Security Administration (TSA), which receive essential IT infrastructure support. Services delivered include computer facilities management, ensuring the operational stability and efficiency of critical IT systems. The geographic impact is primarily within Virginia, where the contractor is located, and potentially across all locations where TSA operates. Workforce implications include the employment of IT professionals by General Dynamics to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost creep if award fee criteria are not strictly managed.
Reliance on a single contractor for critical IT infrastructure could pose a risk if performance falters.
The fixed-price award fee structure requires careful monitoring to ensure it effectively drives desired outcomes without excessive administrative burden.

Positive Signals

Awarded through full and open competition, suggesting a competitive bidding process.
The fixed-price award fee structure aims to balance cost control with performance incentives.
The contract duration of five years provides stability for essential IT services.

Sector Analysis

This contract falls within the Information Technology (IT) services sector, specifically focusing on IT infrastructure support and computer facilities management. The federal IT services market is substantial, with significant spending allocated annually to maintain and upgrade government IT systems. Contracts like this are crucial for ensuring the operational continuity of federal agencies. Benchmarks for similar IT support contracts often vary widely based on scope, complexity, and service level agreements, but a $125.5 million award over five years suggests a significant and comprehensive support requirement.

Small Business Impact

The contract details indicate that small business participation was not a primary focus, as the award was not set aside for small businesses and the contractor is a large business. There is no explicit mention of subcontracting requirements for small businesses within the provided data. This suggests that the primary benefits to the small business ecosystem would be indirect, potentially through supply chain opportunities if General Dynamics engages smaller vendors, rather than through direct set-aside awards.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program management office within the Transportation Security Administration (TSA) at DHS. Accountability measures are likely tied to the performance standards outlined in the contract and the criteria for earning award fees. Transparency is facilitated through contract award databases, but detailed performance reports and fee determinations are often internal. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

IT Infrastructure Modernization Programs
Cloud Computing Services Contracts
Cybersecurity Support Services
Enterprise IT Services
Federal Civilian IT Spending

Risk Flags

Potential for cost overruns if award fee criteria are not strictly managed.
Contract performance monitoring complexity.
Reliance on contractor for critical infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $125.6 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. INFORMATION TECHNOLOGY INFRASTRUCTURE PROGRAM SUPPORT SERVICES

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 (Transportation Security Administration).

What is the total obligated amount?

The obligated amount is $125.6 million.

What is the period of performance?

Start: 2010-09-01. End: 2015-08-31.

What is General Dynamics Information Technology's track record with similar federal IT infrastructure support contracts?

General Dynamics Information Technology (GDIT), now part of General Dynamics, has a long history of supporting federal agencies with IT services, including infrastructure management, system integration, and modernization. They have held numerous large-scale contracts with departments such as Defense, Homeland Security, and Health and Human Services. Their track record often includes managing complex networks, data centers, and end-user support. Performance on past contracts, including adherence to schedules, budget management, and user satisfaction, would be crucial factors in assessing their capability for this specific TSA contract. Reviewing past performance evaluations and any contract disputes or awards would provide further insight into their reliability and expertise in delivering similar services.

How does the $125.5 million contract value compare to similar IT infrastructure support contracts awarded by DHS or other agencies?

The $125.5 million contract value over five years, averaging approximately $25.1 million annually, places this contract in the mid-to-large tier for federal IT infrastructure support. Comparable contracts within DHS and other agencies for similar services (e.g., data center operations, network management, help desk support) can range from tens of millions to hundreds of millions of dollars annually, depending on the scope and complexity. For instance, large-scale enterprise IT support contracts for agencies like the IRS or the Department of Defense can exceed $1 billion over their lifespan. This TSA contract appears to be a significant but not exceptionally large award within the broader federal IT landscape, suggesting a substantial but focused scope of support.

What are the key performance indicators (KPIs) and award fee criteria for this contract, and how are they measured?

The provided data does not specify the key performance indicators (KPIs) or the precise criteria for the award fee component of this contract. Typically, for IT infrastructure support, KPIs might include system uptime percentages, response times for service requests, incident resolution rates, security compliance adherence, and successful implementation of upgrades or patches. The award fee structure would likely tie a portion of the contractor's compensation to meeting or exceeding these predefined performance targets. Without access to the contract's Performance Work Statement (PWS) or the specific terms of the award fee plan, it's impossible to detail the exact metrics and evaluation methodology used to determine payouts.

What is the potential risk associated with the fixed-price award fee contract type for IT infrastructure support?

The fixed-price award fee (FPAF) contract type presents a mixed risk profile. For the government, the primary benefit is cost certainty, as the base price is fixed. However, the 'award fee' component introduces flexibility, allowing for additional payment based on performance. The risk lies in the government's ability to accurately define and objectively measure performance to justify award fees. If performance criteria are poorly defined or measurement is subjective, it could lead to disputes or unwarranted fee payments. For the contractor, the risk is that they may not achieve the highest performance levels and thus not earn the full potential award fee, impacting their profit margin. Effective oversight is crucial to mitigate risks associated with FPAF contracts.

How has federal spending on IT infrastructure support services evolved, and where does this contract fit within that trend?

Federal spending on IT infrastructure support services has been a consistent and significant component of overall IT budgets for decades. While specific line items may shift with technological advancements (e.g., from on-premise data centers to cloud services), the fundamental need for managing, maintaining, and securing IT infrastructure remains. Spending trends have generally increased over time, driven by growing data volumes, increasing cyber threats, and the demand for more sophisticated digital services. This $125.5 million contract for TSA's IT infrastructure support fits within this ongoing trend of substantial federal investment in maintaining robust and reliable IT operations. It reflects the continuous need for agencies to ensure their foundational IT systems are operational and secure.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: FIXED PRICE AWARD FEE (M)

Evaluated Preference: NONE

Contractor Details

Parent Company: Csra LLC (UEI: 079735371)

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

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $125,550,331

Exercised Options: $125,550,331

Current Obligation: $125,550,331

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HSHQDC06D00021

IDV Type: IDC

Timeline