DoD's $21.5M IT support contract awarded to General Dynamics Information Technology shows potential value concerns

Contract Overview

Contract Amount: $21,457,251 ($21.5M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2008-04-01

End Date: 2013-06-30

Contract Duration: 1,916 days

Daily Burn Rate: $11.2K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: PROGRAM & FINANCIAL MANAGEMENT SUPPORT

Place of Performance

Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22042

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $21.5 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: PROGRAM & FINANCIAL MANAGEMENT SUPPORT Key points: 1. Contract awarded on a non-competitive basis, limiting price discovery and potentially increasing costs. 2. Long contract duration of 1916 days suggests a need for sustained support, but also raises questions about flexibility and adaptation. 3. The cost-plus-fixed-fee structure can incentivize contractor spending, requiring robust oversight to manage expenses. 4. Engineering services (NAICS 541330) indicate a focus on technical and analytical support, rather than simple IT maintenance. 5. Awarded by the Defense Contract Management Agency, suggesting a critical support function within the DoD. 6. The absence of small business participation raises questions about broader economic impact and set-aside utilization.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to the lack of competitive bids and the specific nature of the services. The total value of $21.5 million over approximately five years averages to roughly $4.3 million annually. Without comparable contracts for similar IT program and financial management support within the DoD, it's difficult to definitively assess if this represents a good or fair price. The cost-plus-fixed-fee (CPFF) contract type, while allowing for flexibility, can lead to higher costs if not managed tightly, as contractor expenses are reimbursed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'NOT AVAILABLE FOR COMPETITION' (sole-source) designation. This means that the agency determined that only one source was capable of satisfying the requirement. Consequently, there was no opportunity for other vendors to bid, and the level of competition was effectively zero. This lack of competition limits the agency's ability to negotiate the best possible price and may result in higher costs for the government.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from competitive pricing, potentially leading to higher overall expenditure for the same services.

Public Impact

The primary beneficiaries are the Department of Defense (DoD) and its various programs requiring IT and financial management support. Services delivered likely include program analysis, financial tracking, IT system support, and potentially strategic planning for defense initiatives. The geographic impact is likely concentrated within the operational areas of the Defense Contract Management Agency and its supported entities, primarily in Virginia. Workforce implications include the employment of skilled IT professionals, analysts, and program managers by General Dynamics Information Technology.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Non-competitive award limits price discovery and potentially inflates costs.
Cost-plus-fixed-fee structure requires diligent oversight to prevent cost overruns.
Long contract duration may indicate a lack of agile procurement or evolving requirements.
No indication of small business participation or subcontracting opportunities.

Positive Signals

Award to a large, established contractor like General Dynamics suggests a focus on reliability and proven capability.
The contract addresses critical IT and financial management support for the DoD.
The fixed fee component provides some cost predictability compared to pure cost-plus contracts.

Sector Analysis

The IT services sector supporting the federal government is vast and highly competitive, with significant spending allocated to defense and intelligence agencies. This contract falls within the broader category of professional, scientific, and technical services, specifically engineering services (NAICS 541330). Federal IT spending often focuses on modernization, cybersecurity, and program management support. Comparable spending benchmarks are difficult to establish without more specific service details, but the DoD is consistently one of the largest federal IT spenders.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the absence of information regarding subcontracting plans suggests that small businesses may not be significantly involved in fulfilling this contract. This could limit opportunities for small businesses to participate in large federal contracts and contribute to the defense IT ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the purview of the Defense Contract Management Agency (DCMA), which awarded the contract. As a cost-plus-fixed-fee contract, DCMA would be responsible for monitoring contractor expenditures, ensuring compliance with contract terms, and verifying the necessity and reasonableness of costs incurred. Transparency is facilitated through contract reporting mechanisms, but the non-competitive nature limits public scrutiny of the initial award decision. The Inspector General for the Department of Defense would have jurisdiction for audits and investigations related to potential fraud, waste, or abuse.

Related Government Programs

DoD IT Modernization Programs
Defense Financial Management Systems
Program Management Support Services
Engineering and Technical Services Contracts

Risk Flags

Sole-source award
Cost-plus-fixed-fee structure
Lack of small business participation
Limited transparency on justification for non-competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.5 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. PROGRAM & FINANCIAL MANAGEMENT SUPPORT

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 $21.5 million.

What is the period of performance?

Start: 2008-04-01. End: 2013-06-30.

What specific IT program and financial management support services were provided under this contract?

While the contract is categorized under 'PROGRAM & FINANCIAL MANAGEMENT SUPPORT' and NAICS code 541330 (Engineering Services), the precise details of the services rendered are not fully elaborated in the provided data. Typically, such contracts involve a range of activities including IT system development, integration, maintenance, cybersecurity support, data analysis, financial reporting, budget tracking, and strategic planning for defense programs. Given the 'Engineering Services' classification, it suggests a focus on complex technical analysis, system design, and potentially the development or enhancement of specialized software or hardware solutions critical to DoD operations.

How does the $21.5 million total contract value compare to similar IT support contracts within the DoD?

Direct comparison of the $21.5 million total value is difficult without knowing the specific scope and duration of comparable contracts. However, the average annual value of approximately $4.3 million ($21.5M / 5 years) falls within a common range for large-scale IT support and engineering services awarded by major federal agencies. The key differentiator here is the sole-source award, which inherently prevents a direct value-for-money comparison against competitive bids. Contracts awarded through full and open competition often yield lower prices due to market forces, making this non-competitive award a point of potential concern for cost efficiency.

What are the primary risks associated with a sole-source, cost-plus-fixed-fee contract of this magnitude?

The primary risks associated with this contract structure are twofold. Firstly, the sole-source nature means the government did not benefit from competitive bidding, potentially leading to a higher price than could have been achieved otherwise. There's a risk of paying a premium for the services. Secondly, the Cost-Plus-Fixed-Fee (CPFF) structure, while providing a defined profit margin (the fixed fee), reimburses the contractor for allowable costs. This can create an incentive for the contractor to incur higher costs, as their profit is tied to the fee, not necessarily cost savings. Robust government oversight is crucial to mitigate risks of cost overruns and ensure that all incurred costs are reasonable, allocable, and necessary.

What was the justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was awarded as 'NOT AVAILABLE FOR COMPETITION,' which is synonymous with a sole-source justification. Specific details regarding the justification (e.g., unique capabilities, urgent need, lack of other sources) are not included. Federal Acquisition Regulation (FAR) Part 6 outlines the policies for contracting without full and open competition. Agencies must document a compelling reason, such as the existence of only one responsible source, or demonstrate that full and open competition is not feasible or not in the best interest of the government. Without this documentation, the justification remains unclear.

What is General Dynamics Information Technology's track record with similar DoD contracts?

General Dynamics Information Technology (GDIT) is a major federal contractor with extensive experience supporting the Department of Defense across a wide array of IT, C4ISR, and professional services. They have a long history of managing large, complex contracts, including those involving program management, system engineering, and IT infrastructure support. While specific performance details for this particular $21.5 million contract are not provided, GDIT's general track record suggests they possess the technical capabilities and resources to execute such requirements. However, past performance on other contracts, especially sole-source ones, would need detailed review to fully assess their reliability and cost-effectiveness.

How has DoD spending on IT program and financial management support evolved over the contract's period (2008-2013)?

The contract period spans from April 1, 2008, to June 30, 2013. During this timeframe, the DoD was undergoing significant shifts in its IT strategy, including efforts towards consolidation, modernization, and improved cybersecurity. Spending on program and financial management support would likely have remained substantial, reflecting the complexity of managing vast defense budgets and numerous acquisition programs. While this specific contract represents a portion of that spending, overall DoD IT expenditures were influenced by evolving threats, technological advancements, and budget cycles, often seeing increases related to modernization initiatives and operational demands.

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: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0042108R0018

Offers Received: 1

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

Financial Breakdown

Contract Ceiling: $25,660,126

Exercised Options: $24,647,635

Current Obligation: $21,457,251

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline