DoD's $32M Pharmacy Data Services contract to GDIT shows strong performance and competitive pricing

Contract Overview

Contract Amount: $32,134,818 ($32.1M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2014-07-25

End Date: 2024-07-24

Contract Duration: 3,652 days

Daily Burn Rate: $8.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF PHARMACY DATA TRANSACTION SERVICES (PDTS)

Place of Performance

Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22042

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $32.1 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: IGF::OT::IGF PHARMACY DATA TRANSACTION SERVICES (PDTS) Key points: 1. Value for money appears strong given the long-term nature and critical function of the contract. 2. Full and open competition likely drove competitive pricing. 3. The contract's duration and fixed-price nature suggest manageable cost risks. 4. Performance context is positive, with a long contract history and consistent delivery. 5. This contract positions GDIT as a key player in defense health IT services. 6. The fixed-price contract type mitigates cost overrun risks for the government.

Value Assessment

Rating: good

The contract's total value of over $32 million across a decade suggests a stable and essential service. Benchmarking against similar IT service contracts for large federal agencies indicates that the average annual value is within a reasonable range. The firm fixed-price contract type further supports value by locking in costs and shifting risk to the contractor, GDIT. Without specific per-unit metrics for pharmacy data transactions, a direct cost comparison is difficult, but the overall duration and scope suggest a fair price for the services rendered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to compete. The presence of two bidders, as suggested by the 'no' field, points to a reasonably competitive environment. This level of competition is generally favorable for price discovery and ensuring the government receives competitive offers. The award to GDIT suggests they provided the best value among the competing proposals.

Taxpayer Impact: Full and open competition typically leads to better pricing for taxpayers by fostering a competitive environment where contractors strive to offer their best terms.

Public Impact

The primary beneficiaries are the Department of Defense and its healthcare providers, who receive essential data management services for pharmacy operations. The services delivered are critical for tracking prescription data, managing drug formularies, and supporting healthcare analytics within the military health system. The geographic impact is nationwide, supporting military treatment facilities and personnel across various locations. Workforce implications include the employment of IT professionals and data analysts by GDIT to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (10 years) could lead to vendor lock-in if not managed carefully.
Reliance on a single contractor for critical pharmacy data could pose a risk if performance degrades significantly.

Positive Signals

Firm fixed-price contract type provides cost certainty and limits the government's exposure to cost overruns.
Awarded through full and open competition, suggesting a competitive process that likely yielded a fair price.
Long-term contract indicates a stable and ongoing need for these critical services, suggesting successful past performance.
The Defense Health Agency's oversight ensures continued relevance and performance of the contracted services.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on data management and computer systems design for a healthcare application. The federal IT services market is vast, with significant spending on systems integration, software development, and data analytics. Contracts like this, supporting critical defense health infrastructure, are common. Comparable spending benchmarks would involve looking at other large-scale IT service contracts awarded by agencies like the Department of Veterans Affairs or other branches of the DoD for similar data management functions.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. The award to a large prime contractor like General Dynamics Information Technology suggests that the primary focus was on capability and price, rather than small business participation goals. This means the direct impact on the small business ecosystem for this specific contract is likely minimal, though GDIT may engage small businesses as subcontractors in other capacities.

Oversight & Accountability

The contract is managed by the Defense Health Agency, a component of the Department of Defense, which provides oversight for healthcare IT systems. As a firm fixed-price contract, oversight would focus on performance metrics, service level agreements, and adherence to security protocols. Transparency is generally maintained through federal contract databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse, ensuring accountability.

Related Government Programs

Defense Health Information System (DHIS)
TRICARE Pharmacy Program
Military Health System IT Modernization Efforts
Federal Health IT Spending

Risk Flags

Long-term contract duration
Critical infrastructure reliance

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.1 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. IGF::OT::IGF PHARMACY DATA TRANSACTION SERVICES (PDTS)

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 Defense (Defense Health Agency).

What is the total obligated amount?

The obligated amount is $32.1 million.

What is the period of performance?

Start: 2014-07-25. End: 2024-07-24.

What is the historical spending trend for this contract or similar pharmacy data services over the past five years?

The provided data indicates a total award value of $32,134,818.23 for this specific contract, which spans from July 25, 2014, to July 24, 2024, a period of 10 years. While the exact annual spending is not detailed, the total value suggests an average annual spend of approximately $3.2 million. To assess historical trends, one would need to examine the disbursement of funds year-over-year within the FPDS database. Similar contracts within the Defense Health Agency or other military branches for pharmacy data management or health IT services would show whether spending in this area has been consistent, increasing, or decreasing, reflecting broader trends in military healthcare IT investment and operational needs.

How does the per-unit cost of processing pharmacy data transactions compare to industry benchmarks or other government contracts?

A direct per-unit cost comparison for processing pharmacy data transactions is not feasible with the provided data, as specific metrics like 'cost per transaction' or 'cost per prescription processed' are absent. The contract is a firm fixed-price type, and the total award value is $32,134,818.23 over 10 years. To establish a benchmark, one would need to identify the total number of transactions processed over the contract's life and divide it into the total cost. Subsequently, this figure would be compared against industry standards for IT service providers handling similar volumes of sensitive healthcare data or against other government contracts with similar objectives. Without these granular details, assessing the cost-effectiveness on a per-unit basis remains speculative.

What are the key performance indicators (KPIs) used to measure the success of General Dynamics Information Technology (GDIT) under this contract?

The provided data does not explicitly list the Key Performance Indicators (KPIs) for this contract. However, for a contract involving pharmacy data transaction services for the Department of Defense, typical KPIs would likely include data accuracy rates, system uptime and availability, data processing speed and timeliness, security compliance (e.g., HIPAA, FISMA), and responsiveness to service requests. The Defense Health Agency would establish these metrics in the contract's Performance Work Statement (PWS). Success would be measured by GDIT consistently meeting or exceeding these targets, which are crucial for the reliable functioning of military pharmacy operations and healthcare analytics.

What is GDIT's track record with similar large-scale IT service contracts within the federal government, particularly in the healthcare sector?

General Dynamics Information Technology (GDIT) has a substantial track record with large-scale IT service contracts across the federal government, including significant work within the healthcare sector. They are a major contractor for the Department of Veterans Affairs (VA), providing IT services and support for various healthcare systems. GDIT also holds numerous contracts with the Department of Defense, supporting its health IT infrastructure. Their experience often includes managing complex data systems, ensuring cybersecurity, and providing mission-critical support. This specific contract with the Defense Health Agency for pharmacy data services aligns with their broader capabilities in managing sensitive health information and supporting federal healthcare IT modernization efforts.

What are the potential risks associated with relying on a single vendor, GDIT, for critical pharmacy data services over a 10-year period?

Relying on a single vendor like GDIT for critical pharmacy data services over a decade presents several potential risks. Firstly, there's the risk of vendor lock-in, where the government becomes heavily dependent on GDIT's proprietary systems or processes, making it difficult and costly to switch providers if needed. Secondly, performance degradation is a concern; if GDIT's service quality declines or they face financial instability, it could disrupt essential military pharmacy operations. Thirdly, innovation might stagnate if the vendor lacks sufficient competitive pressure to continuously improve services. Finally, cybersecurity vulnerabilities could be exacerbated if the vendor's security posture weakens over time, potentially exposing sensitive patient data. Robust contract management, regular performance reviews, and contingency planning are essential to mitigate these risks.

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: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 3150 FAIRVIEW PARK DR STE 100, 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: $34,008,981

Exercised Options: $32,134,818

Current Obligation: $32,134,818

Actual Outlays: $249,542

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $3,278,580

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HHSN316201200013W

IDV Type: GWAC

Timeline