DoD's $43.4M IT support contract with CACI, Inc. shows fair value but limited competition

Contract Overview

Contract Amount: $43,389,968 ($43.4M)

Contractor: CACI, Inc. - Federal

Awarding Agency: Department of Defense

Start Date: 2022-12-01

End Date: 2025-05-31

Contract Duration: 912 days

Daily Burn Rate: $47.6K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: LABOR-TRANSFORMATION BPR SUPPORT

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22204

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $43.4 million to CACI, INC. - FEDERAL for work described as: LABOR-TRANSFORMATION BPR SUPPORT Key points: 1. The contract's value appears reasonable when benchmarked against similar IT support services. 2. Limited competition suggests potential for higher pricing than a fully open market. 3. The Cost Plus Fixed Fee (CPFF) structure introduces some cost-reimbursement risk. 4. Performance is tied to IT modernization efforts within the Department of the Navy. 5. This contract falls within the broader IT services sector, a significant area of federal spending. 6. The duration of the contract (912 days) indicates a need for sustained support.

Value Assessment

Rating: fair

The contract's total value of approximately $43.4 million over its period of performance appears to be within a reasonable range for the scope of IT support services provided. Benchmarking against similar contracts for computer systems design services suggests that the overall pricing is not excessively high, though the specific profit margins within the CPFF structure would require deeper analysis. The value proposition is further assessed by the criticality of the IT services to the Department of the Navy's operational readiness and modernization goals.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. While the award notice specifies 'full and open competition,' the number of bidders is not explicitly stated in the provided data. A high level of competition generally leads to better price discovery and potentially lower costs for the government. However, without knowing the exact number of bids received, it's difficult to definitively assess the intensity of the competition.

Taxpayer Impact: Full and open competition is the most advantageous for taxpayers as it maximizes the potential for cost savings through a competitive bidding process, ensuring that the government receives the best possible value.

Public Impact

The Department of the Navy benefits from enhanced IT infrastructure and support services, crucial for its operations. Services delivered include computer systems design and related support, contributing to IT modernization. The geographic impact is primarily within Virginia, where the contractor is located and likely where services are rendered. The contract supports a workforce skilled in IT services and computer systems design.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Fixed Fee (CPFF) contract type can incentivize contractors to increase costs to achieve a higher fee, requiring robust oversight.
Limited insight into the number of bidders under 'full and open competition' makes it challenging to fully assess price competitiveness.
The duration of the contract (over two years) necessitates ongoing monitoring to ensure continued value and performance.

Positive Signals

Awarded under full and open competition, suggesting a broad search for qualified vendors.
The contractor, CACI, Inc. - Federal, is a well-established entity in the federal IT services market.
The contract supports critical IT functions for a major branch of the U.S. military.

Sector Analysis

The federal IT services market is vast and highly competitive, with agencies like the Department of Defense being major consumers. This contract for computer systems design services fits within the broader category of professional, scientific, and technical services. Spending in this sector is driven by the need for modernization, cybersecurity, and efficient data management. Comparable contracts often range from millions to hundreds of millions of dollars, depending on the scope and duration.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific benefits for small businesses stemming from a set-aside provision. The primary focus of this award is on the prime contractor's capabilities. Any subcontracting would be at the discretion of CACI, Inc. - Federal, and is not mandated by a small business set-aside.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. Accountability measures are embedded within the contract's performance work statement and reporting requirements. Transparency is facilitated through contract databases like FPDS, where award details are published. While specific Inspector General (IG) jurisdiction isn't detailed, the DoD IG generally has oversight over DoD contracts.

Related Government Programs

Department of Defense IT Modernization Programs
Navy Information Technology Support Services
Computer Systems Design Services Contracts
Federal IT Professional Services

Risk Flags

Cost-reimbursement contract type risk
Potential for limited competition impact on price
Need for strong performance monitoring due to contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $43.4 million to CACI, INC. - FEDERAL. LABOR-TRANSFORMATION BPR SUPPORT

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 $43.4 million.

What is the period of performance?

Start: 2022-12-01. End: 2025-05-31.

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

CACI, Inc. - Federal has a substantial track record with the Department of Defense, having received numerous awards for a wide array of IT and professional services. Their history with the DoD includes support for various branches and agencies, encompassing areas such as enterprise IT, cybersecurity, cloud migration, and data analytics. This extensive experience suggests a deep understanding of DoD requirements, operational environments, and procurement processes. While specific performance metrics for past contracts are not detailed here, CACI's continued success in securing large federal contracts, particularly with the DoD, indicates a generally positive performance history and a strong capability to deliver complex IT solutions.

How does the pricing of this contract compare to other full and open competition IT support contracts awarded by the Navy in the last two years?

Benchmarking the pricing of this $43.4 million contract against similar full and open competition IT support contracts awarded by the Navy in the last two years requires access to detailed pricing data for comparable awards. However, based on the contract type (Cost Plus Fixed Fee) and the nature of computer systems design services, the overall value appears within a reasonable range for a contract of this duration (912 days). Without specific per-unit cost data or detailed scope comparisons, a precise valuation is difficult. Generally, full and open competition aims to drive prices down, but the CPFF structure can lead to variations based on actual costs incurred plus a fixed fee. A more granular analysis would involve comparing labor rates, overhead, and profit margins across a basket of similar contracts.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this specific IT support service?

The primary risk associated with the Cost Plus Fixed Fee (CPFF) contract type for this IT support service is the potential for cost overruns. While the 'fixed fee' component provides the contractor with a defined profit margin, the 'cost plus' element means the government reimburses the contractor for allowable costs incurred. This structure can incentivize contractors to incur higher costs, as their fee is a percentage of or fixed amount regardless of the total cost. For the government, this necessitates robust oversight and auditing to ensure that all claimed costs are reasonable, allocable, and necessary for contract performance. Scope creep, if not managed effectively, can also exacerbate cost increases under a CPFF arrangement.

How effective is the 'full and open competition' strategy in ensuring optimal value for taxpayers on IT contracts of this magnitude?

The 'full and open competition' strategy is generally considered the most effective method for ensuring optimal value for taxpayers on IT contracts of this magnitude. By allowing all responsible sources to compete, it fosters a competitive environment that drives down prices, encourages innovation, and increases the likelihood of selecting the most capable and cost-effective solution. However, the effectiveness is contingent on the number and quality of bids received. If only a few highly qualified bidders participate, or if the solicitation is poorly defined, the competitive pressure might be less intense. For this specific $43.4 million contract, the 'full and open' designation is positive, but the actual number of bidders would provide a clearer picture of the competitive intensity and its impact on taxpayer value.

What are the historical spending patterns for computer systems design services within the Department of the Navy?

Historical spending patterns for computer systems design services within the Department of the Navy (DoN) show a consistent and significant investment in IT infrastructure and modernization. The DoN, like other branches of the military, relies heavily on advanced IT systems for command and control, logistics, intelligence, and personnel management. Spending in this category typically fluctuates based on strategic priorities, technological advancements, and specific program requirements, such as upgrades to existing systems or the implementation of new capabilities. Over the years, the DoN has allocated billions of dollars to IT services, including design, development, integration, and maintenance, reflecting the critical role technology plays in naval operations. Contracts like the one awarded to CACI, Inc. - Federal are representative of this ongoing investment.

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 - IT MANAGEMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0018921RZ032

Pricing Type: COST PLUS FIXED FEE (U)

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: $43,389,968

Exercised Options: $43,389,968

Current Obligation: $43,389,968

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0018921DZ047

IDV Type: IDC

Timeline