DoD's $142.5M engineering services contract awarded to General Dynamics IT shows fair value with limited competition

Contract Overview

Contract Amount: $14,250,215 ($14.3M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2009-06-09

End Date: 2011-03-31

Contract Duration: 660 days

Daily Burn Rate: $21.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SUPPORT SERVICES - TASK 2.0

Place of Performance

Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $14.3 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: SUPPORT SERVICES - TASK 2.0 Key points: 1. Contract value represents a moderate investment in specialized engineering support. 2. Competition was limited, potentially impacting price discovery and taxpayer value. 3. Performance period of 660 days suggests a focused, short-to-medium term engagement. 4. The contract falls within the broader engineering services sector, a critical area for defense operations. 5. Fixed-price contract type aims to control costs, but requires careful scope management. 6. Awarded to a large, established contractor, indicating a focus on proven capability.

Value Assessment

Rating: fair

The contract's value of $142.5 million over approximately two years for engineering services appears within a reasonable range for specialized support. Benchmarking against similar large-scale engineering contracts within the Department of Defense suggests that the pricing structure, while not explicitly detailed here, is likely competitive given the contractor's established presence. However, the lack of detailed cost breakdowns or comparisons to industry benchmarks makes a definitive value assessment challenging. The fixed-price nature of the award suggests an attempt to manage costs, but the ultimate value depends heavily on the efficiency of service delivery and the accuracy of the initial cost estimations.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under a 'full and open competition' framework, but the data indicates only one bid was received. This suggests that while the opportunity was broadly advertised, only one qualified bidder, General Dynamics Information Technology, Inc., submitted a proposal. A single bid scenario raises concerns about the extent of actual competition. It could imply that the requirements were highly specialized, the market for such services is limited, or potential competitors chose not to bid due to various factors. This limited competitive landscape may have influenced the final negotiated price.

Taxpayer Impact: A single bid limits the government's ability to leverage competitive pressures to secure the lowest possible price for taxpayers. While the government still negotiates, the absence of alternative offers reduces the certainty that the price reflects optimal market value.

Public Impact

The Department of the Navy benefits from specialized engineering support crucial for its operations. Services delivered likely include design, analysis, and technical consultation for defense systems. Geographic impact is primarily within areas served by the Department of the Navy, potentially global. Workforce implications include employment opportunities for engineers and technical specialists at General Dynamics IT.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have resulted in a higher price than if multiple bids were received.
Lack of detailed cost breakdowns makes it difficult to assess the true value for money.
The fixed-price contract requires careful oversight to ensure scope creep does not inflate costs.
Reliance on a single bidder could pose a risk if performance issues arise.

Positive Signals

Award to a large, established contractor like General Dynamics IT suggests a focus on reliability and proven expertise.
The fixed-price contract type provides cost certainty for the government, assuming effective management.
The contract falls under the broad category of engineering services, which is essential for defense modernization.

Sector Analysis

This contract operates within the Engineering Services sector (NAICS code 541330), a critical component of the broader professional, scientific, and technical services industry. This sector is characterized by high technical expertise, often involving complex problem-solving and design for specialized applications. Federal spending in engineering services is substantial, particularly within the Department of Defense, supporting everything from infrastructure development to advanced weapons systems. General Dynamics Information Technology, Inc. is a major player in this space, competing with other large defense contractors and specialized engineering firms. The market size for defense-related engineering services is in the tens of billions annually.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The award was made to General Dynamics Information Technology, Inc., a large prime contractor. While there is no direct set-aside, large prime contractors are often required to meet subcontracting goals with small businesses. The extent to which General Dynamics IT will utilize small businesses for subcontracting on this specific task order is not detailed here, but it represents a potential avenue for small business participation within the broader defense contracting ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officers and program managers within the Department of the Navy. As a fixed-price contract, oversight would focus on ensuring that the contractor meets the defined scope of work and performance standards. Transparency is facilitated through contract award databases, but detailed performance metrics and cost-tracking are typically internal to the agency. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise during the contract's performance.

Related Government Programs

Defense Engineering Services
Department of Defense IT Support Contracts
Naval Systems Engineering
Professional and Technical Services

Risk Flags

Limited competition (single bid)
Potential for cost overruns if scope is not well-defined
Reliance on a single contractor for critical services

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.3 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. SUPPORT SERVICES - TASK 2.0

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 (Department of the Navy).

What is the total obligated amount?

The obligated amount is $14.3 million.

What is the period of performance?

Start: 2009-06-09. End: 2011-03-31.

What is the track record of General Dynamics Information Technology, Inc. with similar Department of Defense contracts?

General Dynamics Information Technology, Inc. (GDIT) has a long and extensive history of performing complex IT and engineering support services for the Department of Defense (DoD) and other federal agencies. They are a major defense contractor with a broad portfolio that includes systems engineering, software development, cybersecurity, and enterprise IT infrastructure management. GDIT has been awarded numerous large-scale contracts across various military branches, including the Navy, Army, and Air Force. Their track record generally indicates a capacity to handle large, technically demanding projects. However, like any large contractor, they have also faced scrutiny and performance reviews on specific contracts. Analyzing their past performance on contracts with similar scope, duration, and value would provide a more granular understanding of their reliability and effectiveness in delivering engineering services for the DoD.

How does the $142.5 million contract value compare to other engineering services contracts awarded by the Department of the Navy?

The $142.5 million contract value for engineering services awarded to General Dynamics Information Technology, Inc. is a significant but not unprecedented figure for the Department of the Navy (DoN). The DoN procures a wide array of engineering and technical support services, with contract values ranging from small task orders to multi-billion dollar programs. Contracts in the $100-200 million range for specialized engineering support over a 1-2 year period are common, especially for complex systems or modernization efforts. For instance, the Navy frequently awards contracts for naval architecture, systems integration, cybersecurity engineering, and platform modernization that fall within or exceed this value bracket. The specific nature of 'Task 2.0' support services would determine its relative size; if it pertains to a critical, large-scale platform or system, $142.5 million might be considered moderate. If it's for a more niche or limited scope, it could be considered substantial.

What are the primary risks associated with a sole-source or limited-competition contract of this magnitude?

The primary risks associated with a sole-source or limited-competition contract of this magnitude ($142.5 million) revolve around cost and performance. From a cost perspective, the lack of robust competition can lead to suboptimal pricing, meaning the government may pay more than it would in a fully competitive environment. Price discovery is diminished, and the government has less leverage to negotiate aggressive rates. On the performance side, while the awardee is often a capable contractor, the absence of alternatives reduces the incentive for exceptional performance. If issues arise, the government has limited options for switching providers without significant disruption and cost. Furthermore, limited competition can stifle innovation, as the market may not be incentivized to develop novel solutions if only one incumbent is likely to win future work.

How effective are fixed-price contracts in managing costs for complex engineering services like those provided by General Dynamics IT?

Fixed-price contracts, like the one awarded to General Dynamics IT, aim to provide cost certainty for the government by shifting the risk of cost overruns to the contractor. For complex engineering services, their effectiveness is a mixed bag. On the positive side, they incentivize the contractor to be efficient and manage resources effectively to maximize profit. This can lead to cost savings if the contractor accurately estimates the scope and resources needed. However, engineering services often involve evolving requirements, unforeseen technical challenges, and a degree of uncertainty that can be difficult to fully define upfront. If the initial scope is poorly defined or significant changes occur, fixed-price contracts can lead to costly change orders or disputes. Effective management and a well-defined SOW are crucial for fixed-price contracts to achieve their cost-control objectives in complex service environments.

What is the historical spending trend for engineering services within the Department of the Navy?

Historical spending trends for engineering services within the Department of the Navy (DoN) show a consistent and substantial investment, reflecting the complexity and scale of naval operations and modernization. The DoN relies heavily on engineering expertise for ship design, platform maintenance, weapons systems development, IT infrastructure, and cybersecurity. Annual spending in this category typically runs into the billions of dollars, fluctuating based on defense budgets, strategic priorities, and major acquisition programs. There has been a sustained trend towards outsourcing specialized engineering functions to private contractors, including large firms like General Dynamics IT, to leverage expertise and manage workforce fluctuations. Spending may increase during periods of significant fleet recapitalization or the introduction of new technologies, and decrease during budget austerity measures. Analyzing specific DoN budget documents and contract databases would reveal detailed historical patterns and key areas of investment.

What are the implications of the NAICS code 541330 (Engineering Services) for this contract's oversight and performance metrics?

The classification under NAICS code 541330, 'Engineering Services,' implies that the contract's oversight and performance metrics should align with industry standards for professional engineering work. This typically involves evaluating the technical competence of the contractor, the quality of engineering deliverables (e.g., designs, analyses, reports), adherence to relevant engineering codes and standards, and the successful integration of systems or solutions. Oversight mechanisms would likely include technical reviews, milestone inspections, and performance assessments based on defined engineering criteria. Metrics might focus on design accuracy, project schedule adherence, cost control within the fixed-price framework, and compliance with safety and regulatory requirements. The government's technical representatives play a crucial role in monitoring these aspects to ensure the engineering services meet the intended operational needs and performance specifications.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Computer Sciences Corporation (UEI: 009581091)

Address: 15000 CONFERENCE CENTER DR, CHANTILLY, VA, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $19,044,992

Exercised Options: $14,261,455

Current Obligation: $14,250,215

Parent Contract

Parent Award PIID: GS23F0092K

IDV Type: FSS

Timeline