DoD's $36.8M CACI contract for CORE PDSS services shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $36,882,710 ($36.9M)

Contractor: CACI, Inc. - Federal

Awarding Agency: Department of Defense

Start Date: 2021-01-01

End Date: 2022-12-28

Contract Duration: 726 days

Daily Burn Rate: $50.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIXED PRICE INCENTIVE

Sector: IT

Official Description: CORE PDSS SERVICES YEAR 2

Place of Performance

Location: STAFFORD, STAFFORD County, VIRGINIA, 22556

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $36.9 million to CACI, INC. - FEDERAL for work described as: CORE PDSS SERVICES YEAR 2 Key points: 1. Contract value appears reasonable given the scope of custom programming services. 2. Full and open competition was utilized, but only one bid was received, potentially limiting price discovery. 3. The fixed-price incentive contract type aims to control costs while incentivizing performance. 4. This contract supports critical IT services for the Department of the Navy. 5. The contractor, CACI, Inc. - Federal, has a significant presence in the federal IT sector. 6. The contract duration of approximately two years is standard for this type of service. 7. The contract was awarded as a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle.

Value Assessment

Rating: good

The contract's total value of approximately $36.8 million over two years for custom computer programming services appears to be within a reasonable range for the scope of work. Benchmarking against similar IT service contracts for the Department of Defense suggests that the pricing is competitive, especially considering the specialized nature of the services. The fixed-price incentive (FPI) contract type is designed to provide cost control while motivating the contractor to achieve performance targets, which can lead to better value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, which is a positive indicator for taxpayer value. However, only one bid was received from CACI, Inc. - Federal. While the competition was open, the lack of multiple bidders may suggest potential challenges in the market or the specific requirements of the solicitation. This limited bidding environment could impact the government's ability to secure the most competitive pricing.

Taxpayer Impact: While the competition was open, the single bid received means taxpayers may not have benefited from the full potential of a more robust bidding process, potentially leading to higher costs than if multiple firms had competed.

Public Impact

The Department of the Navy benefits from enhanced IT capabilities through these custom programming services. Core Program Development and Support Services (PDSS) are delivered, likely improving operational efficiency. The contract is geographically focused on Virginia, supporting the local IT workforce. This contract supports specialized IT professionals within CACI, Inc. - Federal.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (one bid) despite full and open solicitation could indicate market issues or overly restrictive requirements.
Fixed-price incentive contracts can sometimes lead to cost overruns if incentive targets are not carefully managed.
Reliance on a single contractor for critical IT services could pose a risk if performance issues arise.

Positive Signals

Awarded under full and open competition, adhering to best practices.
Fixed-price incentive contract type aims to align contractor and government interests for cost efficiency.
Contractor CACI, Inc. - Federal is a well-established entity in the federal IT services market.

Sector Analysis

This contract falls within the broader IT services sector, specifically custom computer programming. The federal IT services market is substantial, with significant spending allocated to software development, system integration, and IT support. Contracts like this are crucial for maintaining and upgrading the technological infrastructure of government agencies. Comparable spending benchmarks for similar custom programming services for defense agencies often range in the tens of millions of dollars annually, depending on complexity and duration.

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 federal contractor like CACI, Inc. - Federal suggests that the primary focus was on capability and performance rather than small business participation. This may limit opportunities for small businesses to engage in this specific contract's work.

Oversight & Accountability

The contract is subject to standard federal procurement oversight mechanisms. As a delivery order under an IDIQ, the underlying contract vehicle likely has established oversight. The fixed-price incentive structure includes performance metrics that are monitored. The Department of Defense's Inspector General would have jurisdiction for audits and investigations if any issues of fraud, waste, or abuse arise. Transparency is generally maintained through contract award databases like FPDS.

Related Government Programs

Department of Defense IT Services
Custom Computer Programming Services
Navy IT Modernization Programs
Federal IT Support Contracts
Indefinite Delivery/Indefinite Quantity (IDIQ) Contracts

Risk Flags

Limited competition despite full and open solicitation.
Potential for cost overruns in FPI contracts.
Reliance on a single vendor for critical services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.9 million to CACI, INC. - FEDERAL. CORE PDSS SERVICES YEAR 2

Who is the contractor on this award?

The obligated recipient is CACI, INC. - FEDERAL.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $36.9 million.

What is the period of performance?

Start: 2021-01-01. End: 2022-12-28.

What is the track record of CACI, Inc. - Federal with the Department of Defense for similar IT services?

CACI, Inc. - Federal is a major contractor for the Department of Defense (DoD), consistently securing a significant portion of its revenue from defense contracts. They have a long history of providing a wide array of IT services, including custom software development, systems integration, cybersecurity, and enterprise IT support. Their track record with the DoD is extensive, encompassing numerous contracts across various branches and agencies. While specific performance details for individual contracts are often proprietary or found in internal government performance reviews, CACI's continued success in winning competitive bids and receiving follow-on work suggests a generally satisfactory performance history. However, like any large contractor, they may have faced past performance issues or disputes on specific projects, which would be detailed in government past performance databases.

How does the $36.8 million contract value compare to other custom programming services procured by the Navy?

The $36.8 million contract value for two years of CORE PDSS services appears to be within the typical range for custom computer programming procured by the Department of the Navy for specialized support. The Navy, like other branches of the DoD, invests heavily in IT modernization and custom software solutions to meet evolving mission requirements. Contracts for similar services, such as software development, system integration, and IT support, often fall within the multi-million dollar range annually. Factors influencing this value include the complexity of the programming, the level of expertise required, the duration of the contract, and the specific performance incentives. Without access to a comprehensive database of all Navy IT contracts and their specific scopes, a precise benchmark is difficult, but this award is consistent with significant IT service procurements.

What are the primary risks associated with a fixed-price incentive (FPI) contract type for this service?

The primary risks associated with a Fixed-Price Incentive (FPI) contract type for custom programming services revolve around the potential for cost overruns and the complexity of managing performance incentives. While FPI contracts aim to share cost savings and overruns between the government and contractor, poorly defined target costs, performance metrics, or incentive levels can lead to disputes or unintended consequences. For custom programming, estimating final costs and defining achievable performance targets can be challenging due to the inherent uncertainties in software development. If the contractor underestimates costs or faces unforeseen technical hurdles, they might struggle to meet targets, potentially leading to increased costs for the government if the final price exceeds the target cost plus the ceiling price. Conversely, overly aggressive incentives could lead the contractor to cut corners on quality.

What is the significance of receiving only one bid under a full and open competition for this contract?

Receiving only one bid under a full and open competition is a significant indicator that warrants further investigation. It suggests that despite the solicitation being open to all qualified bidders, only one entity, CACI, Inc. - Federal, chose to submit a proposal. This could stem from several factors: the market may have limited capacity for this specific type of service, the requirements might have been overly restrictive or complex, the solicitation may have been released at an inopportune time for potential competitors, or the perceived profitability might not have been attractive enough for others. From a taxpayer perspective, this lack of robust competition limits the government's ability to leverage market forces to drive down prices and ensure the best possible value. It raises questions about whether the government received the most competitive offer available.

How does this contract contribute to the Department of the Navy's overall IT modernization efforts?

This contract for CORE PDSS services directly contributes to the Department of the Navy's IT modernization efforts by providing essential custom programming and development support. Modernizing the Navy's IT infrastructure is critical for maintaining operational readiness, enhancing cybersecurity, improving data management, and enabling advanced capabilities like artificial intelligence and cloud computing. Custom programming services are often required when off-the-shelf software solutions do not meet unique military requirements. By procuring these services, the Navy ensures that its critical systems are up-to-date, secure, and capable of supporting current and future missions. This contract likely supports the development or enhancement of specific software applications or systems that are integral to the Navy's operational or administrative functions.

What are the potential implications of this contract's duration (726 days) on service continuity and contractor performance?

The contract duration of approximately 726 days (roughly two years) is a standard timeframe for many IT service contracts, offering a balance between ensuring service continuity and allowing for flexibility. For the Department of the Navy, this duration provides a stable period for CACI, Inc. - Federal to deliver the CORE PDSS services without the constant need for short-term renewals, which can disrupt workflow and knowledge transfer. From a contractor performance perspective, a two-year period allows CACI sufficient time to fully understand the requirements, implement solutions, and demonstrate performance against the contract's objectives. It also provides a reasonable window for the government to assess the contractor's effectiveness and make informed decisions about potential follow-on contracts or modifications, while mitigating the risk of long-term vendor lock-in.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: M6785418R7600

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Parent Company: CACI International Inc

Address: 14370 NEWBROOK DRIVE, 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: $36,882,710

Exercised Options: $36,882,710

Current Obligation: $36,882,710

Actual Outlays: $27,283,664

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $4,748,947

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: M6785419D7614

IDV Type: IDC

Timeline