DoD's $95M IT contract to General Dynamics Information Technology awarded without competition

Contract Overview

Contract Amount: $95,170,866 ($95.2M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-09-16

End Date: 2025-11-15

Contract Duration: 1,521 days

Daily Burn Rate: $62.6K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: TRANSITION AND BUILD OUT & BASE ODCS

Place of Performance

Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22042

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $95.2 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: TRANSITION AND BUILD OUT & BASE ODCS Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, which can lead to higher costs if not managed closely. 2. The contract duration of over 4 years suggests a significant, long-term need for these IT services. 3. Awarded by the Department of the Navy, indicating a focus on naval IT infrastructure and support. 4. The absence of competition raises concerns about potential overpricing and lack of innovative solutions. 5. This contract falls under Computer Systems Design Services, a critical area for modern defense operations. 6. The contractor, General Dynamics Information Technology, is a major player in the federal IT space.

Value Assessment

Rating: questionable

Benchmarking the value of this Cost Plus Fixed Fee (CPFF) contract is challenging without detailed cost breakdowns. CPFF contracts inherently carry higher risk for the government due to potential cost overruns. Comparing it to similar IT services contracts awarded competitively would likely reveal a higher price point for this sole-source award. The fixed fee component provides some cost control, but the overall value proposition is weakened by the lack of competitive pressure to drive efficiency and innovation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed among multiple vendors. This approach is typically reserved for situations where only one vendor can provide the required services, often due to proprietary technology or unique capabilities. The lack of competition limits the government's ability to explore a wider range of solutions and potentially secure more favorable pricing through a bidding process.

Taxpayer Impact: The absence of competition means taxpayers may not be receiving the best possible price for these essential IT services. Without a competitive bidding process, there is less pressure on the contractor to offer cost-saving measures or innovative solutions that could reduce the overall expenditure.

Public Impact

The Department of the Navy benefits from continued IT support and system design services. Military personnel and civilian staff relying on these IT systems will experience uninterrupted operations. The contract supports IT infrastructure within the Department of Defense, crucial for national security. Workforce implications include employment opportunities within General Dynamics Information Technology and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially inflates costs for taxpayers.
Cost-plus-fixed-fee structure can incentivize higher spending if not rigorously overseen.
Lack of competition may stifle innovation and prevent the adoption of more cost-effective solutions.
Long contract duration increases exposure to potential cost increases over time.

Positive Signals

General Dynamics Information Technology is an established contractor with significant experience in federal IT.
The contract addresses a critical need for Computer Systems Design Services within the Department of the Navy.
The fixed fee component provides some level of cost predictability for the government.

Sector Analysis

This contract falls within the broader IT services sector, specifically Computer Systems Design Services. This sector is vital for government operations, encompassing everything from network management to software development and system integration. The federal government is a significant consumer of these services, with spending often concentrated among large, established defense contractors. Benchmarks for similar IT services contracts vary widely based on scope, complexity, and competition, but sole-source awards typically command a premium.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss' (small business subcontracting) is also false. This suggests that small businesses are unlikely to be directly involved as prime contractors or through mandatory subcontracting opportunities on this specific award. The primary beneficiary is likely the large prime contractor, General Dynamics Information Technology, potentially limiting the direct economic impact on the small business IT ecosystem for this particular contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a Cost Plus Fixed Fee contract, rigorous financial oversight and auditing are crucial to ensure costs are reasonable and allocable. Transparency is limited due to the sole-source nature and lack of public competition details. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Department of Defense IT Modernization Programs
Navy Enterprise IT Services
Computer Systems Design Services Federal Contracts
Sole-Source IT Acquisitions

Risk Flags

Sole-source award
Cost-plus contract type
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $95.2 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. TRANSITION AND BUILD OUT & BASE ODCS

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 $95.2 million.

What is the period of performance?

Start: 2021-09-16. End: 2025-11-15.

What is the track record of General Dynamics Information Technology with the Department of Defense, particularly on similar IT services contracts?

General Dynamics Information Technology (GDIT) is a major federal contractor with a long history of providing IT services to the Department of Defense (DoD) and other government agencies. They have secured numerous large contracts for systems integration, cloud computing, cybersecurity, and IT support. Their track record with the DoD includes managing complex IT infrastructures and delivering mission-critical solutions. However, like many large contractors, they have also faced scrutiny regarding contract performance and pricing on certain awards. Analyzing their past performance on similar sole-source or competitively awarded IT services contracts would provide further context on their reliability and cost-effectiveness in delivering these types of services.

How does the pricing structure (Cost Plus Fixed Fee) of this contract compare to industry standards for similar services, especially when awarded competitively?

Cost Plus Fixed Fee (CPFF) contracts are common for complex projects where the final cost is difficult to estimate upfront. The 'cost plus' portion covers allowable costs incurred by the contractor, while the 'fixed fee' represents the contractor's profit, negotiated as a fixed amount. While CPFF provides flexibility, it can lead to higher overall costs for the government compared to fixed-price contracts, especially if cost controls are not robust. Competitively awarded contracts, particularly those using fixed-price structures, often result in lower prices due to market pressures. Benchmarking this CPFF contract against competitively bid, fixed-price contracts for similar Computer Systems Design Services would likely show a higher effective cost for this sole-source award, assuming comparable scope and quality.

What specific risks are associated with a sole-source award for IT services, and how are they mitigated in this contract?

The primary risks associated with sole-source IT services contracts include lack of price competition, potentially leading to inflated costs, and limited innovation as the contractor may face less pressure to introduce new or more efficient solutions. There's also a risk of vendor lock-in. Mitigation strategies often involve robust government oversight, detailed performance metrics, and strong negotiation of contract terms. For this contract, the fixed fee component offers some cost predictability, and the Department of the Navy would be expected to implement stringent oversight of allowable costs and performance standards. However, the fundamental risk of not exploring alternative solutions or better pricing through competition remains.

What is the historical spending pattern for Computer Systems Design Services by the Department of the Navy, and how does this contract fit within that trend?

The Department of the Navy, like other branches of the DoD, consistently spends significant amounts on IT services, including Computer Systems Design Services, to maintain and modernize its vast technological infrastructure. Historical spending patterns show a trend towards increasing reliance on external contractors for specialized IT expertise. This $95 million contract, awarded over approximately four years, represents a substantial but not necessarily anomalous investment within the context of the Navy's overall IT budget. It aligns with the ongoing need for system design, integration, and support services essential for naval operations. Analyzing broader DoD IT spending trends would reveal if this contract's value or structure deviates significantly from typical acquisitions in this category.

What are the potential implications of this contract's duration (over 4 years) on long-term IT strategy and vendor relationships for the Department of the Navy?

A contract duration exceeding four years, as seen here (September 2021 to November 2025), signifies a long-term commitment to the selected vendor for critical IT services. This can provide stability and continuity for the Navy's IT operations, allowing for deeper integration and understanding of specific system requirements by General Dynamics Information Technology. However, such long-term sole-source agreements can also create vendor lock-in, potentially hindering the Navy's agility in adopting newer technologies or switching to more cost-effective providers in the future. It necessitates careful management to ensure the contract remains aligned with evolving strategic IT goals and that performance standards are consistently met throughout its term.

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 › IT AND TELECOM - END USER

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0003921R5000

Pricing Type: COST PLUS FIXED FEE (U)

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: $97,769,996

Exercised Options: $97,769,996

Current Obligation: $95,170,866

Subaward Activity

Number of Subawards: 45

Total Subaward Amount: $31,566,221

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0003921D5001

IDV Type: IDC

Timeline