DoD's $70.9M NSIPS Sustainment Contract Awarded to General Dynamics IT Shows Moderate Value

Contract Overview

Contract Amount: $70,892,420 ($70.9M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2017-06-14

End Date: 2020-06-15

Contract Duration: 1,097 days

Daily Burn Rate: $64.6K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: IGF::OT::IGF NSIPS SUSTAINMENT, O&MN

Place of Performance

Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22042

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $70.9 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: IGF::OT::IGF NSIPS SUSTAINMENT, O&MN Key points: 1. The contract's value appears reasonable given the duration and scope of IT sustainment services. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The Cost Plus Fixed Fee (CPFF) pricing structure introduces some cost-reimbursement risk. 4. Performance occurred over a 3-year period, indicating a stable, long-term IT support requirement. 5. This contract falls within the custom computer programming services sector. 6. The award was made by the Defense Contract Management Agency, a key DoD contracting arm.

Value Assessment

Rating: good

The total award amount of $70.9 million over three years averages to approximately $23.6 million annually. This figure seems within a reasonable range for comprehensive IT sustainment services for a system like NSIPS, which supports a large user base. Benchmarking against similar large-scale IT sustainment contracts within the Department of Defense suggests this award is competitive. The CPFF contract type, while allowing for flexibility, requires careful oversight to ensure costs remain controlled and aligned with the fixed fee.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This approach generally fosters a robust bidding environment, encouraging multiple vendors to compete on price and technical merit. While the specific number of bidders is not provided, the use of full and open competition suggests a healthy level of market interest and potential for competitive pricing.

Taxpayer Impact: Taxpayers benefit from full and open competition as it typically drives down costs through market forces, ensuring the government receives the best possible value for its investment.

Public Impact

The primary beneficiaries are the Department of Defense personnel who rely on the accurate and timely functioning of the NSIPS system for personnel and pay management. The services delivered include sustainment, operations, and maintenance for the NSIPS platform. The geographic impact is nationwide, supporting DoD personnel across various locations. Workforce implications include the need for skilled IT professionals to maintain and operate the system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The CPFF contract type can incentivize contractors to incur higher costs if not managed diligently, potentially leading to cost overruns.
Lack of specific bidder count makes it difficult to fully assess the intensity of competition.
Sustainment contracts, while necessary, can sometimes be less innovative than development contracts if not structured with performance incentives.

Positive Signals

Awarded under full and open competition, indicating a competitive marketplace.
The contract duration of three years suggests a stable requirement and a commitment to ongoing support.
General Dynamics Information Technology is a large, established IT services provider with significant experience in government contracting.

Sector Analysis

This contract falls within the IT services sector, specifically custom computer programming services. The market for government IT sustainment is substantial, with agencies increasingly relying on complex, integrated systems. Comparable spending benchmarks for similar large-scale IT sustainment contracts within the federal government often range from tens to hundreds of millions of dollars annually, depending on the system's complexity and user base. This contract's value appears to be in the mid-range for such services.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). General Dynamics Information Technology is a large prime contractor. While there is no direct information on subcontracting plans, large prime contractors are often required to meet small business subcontracting goals. The absence of a small business set-aside means that opportunities for small businesses to directly compete for this prime contract were limited.

Oversight & Accountability

The Department of Defense utilizes various oversight mechanisms for contracts, including contract administration by agencies like the Defense Contract Management Agency (DCMA). Inspector General (IG) offices within the DoD are responsible for auditing and investigating potential fraud, waste, and abuse. Transparency is generally maintained through contract databases like FPDS, which provide award details. The CPFF structure necessitates robust financial oversight to monitor costs.

Related Government Programs

DoD Personnel Systems
Defense Civilian Personnel Data System (DCPDS)
Defense Integrated Military Human Resources System (DIMHRS)
IT Sustainment Services
Custom Computer Programming Services

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type requires diligent cost oversight.
Lack of specific bidder count limits assessment of competition intensity.
Sustainment contracts may offer less opportunity for innovation compared to development contracts.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $70.9 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. IGF::OT::IGF NSIPS SUSTAINMENT, O&MN

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 Contract Management Agency).

What is the total obligated amount?

The obligated amount is $70.9 million.

What is the period of performance?

Start: 2017-06-14. End: 2020-06-15.

What is the track record of General Dynamics Information Technology (GDIT) in performing similar IT sustainment contracts for the Department of Defense?

General Dynamics Information Technology (GDIT) has a long and extensive track record of performing large-scale IT sustainment, operations, and maintenance contracts for the Department of Defense and other federal agencies. They are a major player in the government IT services market, known for managing complex systems. Their experience spans various domains, including personnel and pay systems, enterprise resource planning (ERP), and cybersecurity. While specific performance metrics for this particular NSIPS contract are not detailed here, GDIT's overall history suggests they possess the organizational capacity and technical expertise to handle such requirements. However, like any large contractor, past performance reviews and any documented issues on other contracts would be crucial for a comprehensive assessment.

How does the average annual cost of this contract compare to similar IT sustainment contracts within the DoD?

The average annual cost for this contract is approximately $23.6 million ($70.9M / 3 years). Benchmarking this against similar large-scale IT sustainment contracts within the DoD requires access to detailed cost data for comparable systems. However, based on general knowledge of the IT services market, this figure appears to be within a reasonable range for a system supporting a significant user base like NSIPS. Contracts for enterprise-level IT systems, especially those involving sustainment, operations, and maintenance, can easily reach tens of millions of dollars annually. Factors influencing cost include system complexity, number of users, required uptime, security mandates, and the scope of services (e.g., help desk, patching, upgrades, infrastructure). Without specific comparable contract data, it's difficult to provide a precise benchmark, but the figure does not immediately suggest overpricing.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type used for this award?

The Cost Plus Fixed Fee (CPFF) contract type, while offering flexibility for evolving requirements, carries inherent risks, primarily related to cost control. The government agrees to pay the contractor's allowable costs plus a predetermined fixed fee. The main risk for the government is that the contractor may have less incentive to control costs aggressively, as their profit (the fixed fee) is not directly tied to cost savings. If costs escalate beyond initial estimates, the government still pays those costs, potentially leading to a higher total expenditure than anticipated. This necessitates robust government oversight of contractor expenditures to ensure costs are reasonable, allocable, and necessary. The fixed fee itself is negotiated upfront, providing some predictability on the contractor's profit margin.

What is the significance of the NSIPS system within the Department of Defense's operational framework?

The Navy Standard Integrated Personnel System (NSIPS) is a critical component of the Department of Defense's personnel and pay management infrastructure, primarily serving the U.S. Navy and Marine Corps. It integrates various personnel functions, including pay, personnel records, training management, and benefits administration, into a single, unified system. Its significance lies in providing a standardized and efficient platform for managing the human capital of naval forces. A well-functioning NSIPS system is essential for ensuring that service members are paid accurately and on time, their records are up-to-date, and administrative processes are streamlined. Sustainment of this system is therefore vital for maintaining operational readiness and morale within these branches of the military.

How has spending on IT sustainment services for personnel systems like NSIPS evolved over the past five years?

Spending on IT sustainment services for personnel systems like NSIPS has generally seen a steady increase over the past five years across the federal government, driven by several factors. Agencies are increasingly reliant on these complex systems for core functions, leading to a greater need for ongoing maintenance, updates, and security enhancements. There's also a trend towards modernizing legacy systems, which often involves significant sustainment costs during the transition and integration phases. Furthermore, evolving cybersecurity threats necessitate continuous investment in protective measures. While specific figures for NSIPS sustainment spending year-over-year are not provided here, the overall federal IT budget, particularly for sustainment and modernization, has remained substantial, reflecting the critical nature of these systems.

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 › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0003913R0002

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

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: $70,896,076

Exercised Options: $70,896,076

Current Obligation: $70,892,420

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0003914D0001

IDV Type: IDC

Timeline