DoD's $165M CACI contract for integrated business systems shows fair value with 4 bidders

Contract Overview

Contract Amount: $164,956,054 ($165.0M)

Contractor: CACI Enterprise Solutions, LLC

Awarding Agency: Department of Defense

Start Date: 2019-01-01

End Date: 2023-12-31

Contract Duration: 1,825 days

Daily Burn Rate: $90.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: N102A STALEY - MSC INTEGRATED BUSINESS SYSTEM

Place of Performance

Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23511

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $165.0 million to CACI ENTERPRISE SOLUTIONS, LLC for work described as: N102A STALEY - MSC INTEGRATED BUSINESS SYSTEM Key points: 1. Contract value appears reasonable given the scope of integrated business systems. 2. Competition was robust with 4 bidders, suggesting a healthy market. 3. Risk indicators are moderate, with performance history needing closer review. 4. This contract supports critical Navy IT infrastructure and business operations. 5. The IT services sector is highly competitive, with many firms capable of this work. 6. Fixed-price contract type helps mitigate cost overrun risks.

Value Assessment

Rating: good

The contract's total value of approximately $165 million over five years suggests a fair annual spend of around $33 million. Benchmarking against similar large-scale IT system integration contracts within the Department of Defense indicates this pricing is within expected ranges. The firm-fixed-price structure further supports value by shifting cost risk to the contractor. While specific performance metrics are not detailed here, the duration and scope imply a significant undertaking where consistent delivery would be key to realizing full value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with four distinct bidders vying for the opportunity. The presence of multiple bidders indicates a competitive marketplace for integrated business system solutions within the defense sector. This level of competition generally leads to more favorable pricing and innovative solutions as contractors strive to differentiate themselves. The agency likely benefited from a range of technical approaches and cost proposals.

Taxpayer Impact: A competitive bidding process ensures that taxpayer dollars are used efficiently, as contractors are incentivized to offer their best pricing and capabilities to win the contract. This reduces the likelihood of overpayment and promotes a more responsible use of public funds.

Public Impact

The Department of the Navy benefits from enhanced integrated business systems, improving operational efficiency. Naval personnel gain access to more streamlined and effective business management tools. The contract supports IT jobs within CACI and potentially its subcontractors. Geographic impact is primarily within the Navy's operational and administrative centers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if requirements are not tightly managed.
Dependence on a single contractor for critical business systems.
Ensuring seamless integration with existing legacy systems can be challenging.

Positive Signals

Firm-fixed-price contract type limits cost uncertainty for the government.
Full and open competition suggests a robust market and competitive pricing.
Long-term contract provides stability for system development and support.

Sector Analysis

The market for IT services, particularly system design and integration, is vast and highly dynamic. This contract falls within the Computer Systems Design Services category (NAICS 541512), a segment characterized by significant government spending. The Department of Defense is a major consumer of these services, seeking to modernize and integrate complex business and operational systems. Comparable spending benchmarks in this sector often involve multi-year, multi-million dollar contracts for large-scale enterprise resource planning (ERP) or similar integrated solutions.

Small Business Impact

This contract was not set aside for small businesses, and there is no explicit indication of subcontracting requirements for small businesses in the provided data. The award to a large prime contractor like CACI suggests that the primary focus was on capability and capacity rather than small business participation. Further analysis would be needed to determine if CACI has a subcontracting plan in place to engage small businesses for specific components of the integrated business system.

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 firm-fixed-price contract terms, requiring the contractor to deliver specified services within agreed-upon costs. Transparency is generally facilitated through contract award databases and reporting requirements, though detailed performance data may be less publicly accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Enterprise Systems
Navy Information Technology Modernization Programs
Enterprise Resource Planning (ERP) Systems
Business Process Re-engineering Services

Risk Flags

Potential for cost overruns if scope is not tightly managed.
Risk of contractor performance degradation over a long contract duration.
Ensuring integration with legacy systems may present technical challenges.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $165.0 million to CACI ENTERPRISE SOLUTIONS, LLC. N102A STALEY - MSC INTEGRATED BUSINESS SYSTEM

Who is the contractor on this award?

The obligated recipient is CACI ENTERPRISE SOLUTIONS, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $165.0 million.

What is the period of performance?

Start: 2019-01-01. End: 2023-12-31.

What is CACI's track record with similar large-scale IT integration contracts for the Department of Defense?

CACI Enterprise Solutions, LLC has a substantial history of performing IT services for the Department of Defense, including system integration, software development, and IT support. They have been involved in numerous large-scale contracts, often focusing on modernizing and integrating complex systems for various branches of the military. While specific details of past performance on contracts of identical scope and value to this one require deeper database searches, CACI's overall profile suggests they are a capable provider for such requirements. Their experience often includes managing firm-fixed-price contracts and delivering solutions within demanding timelines and complex environments, which is relevant to the N102A STALEY contract.

How does the $165 million total contract value compare to other integrated business system contracts awarded by the Navy or DoD in the last five years?

The $165 million total contract value for the N102A STALEY contract, spanning five years, averages approximately $33 million annually. This figure is within the typical range for large-scale IT system integration and modernization efforts within the Department of Defense. Major ERP implementations or significant upgrades to enterprise resource planning systems for large agencies can often reach hundreds of millions, and sometimes billions, of dollars over their lifecycle. When compared to similar contracts for business system modernization within the Navy or other DoD components, this contract appears to be of moderate to large size, reflecting a significant but not exceptionally outlier investment for such critical infrastructure.

What are the primary risks associated with a five-year firm-fixed-price contract for integrated business systems?

A primary risk with a five-year firm-fixed-price contract for integrated business systems is the potential for the contractor to underbid or underestimate the complexity, leading to quality compromises or a struggle to maintain profitability. Conversely, if the government's requirements evolve significantly beyond the initial scope, the fixed-price nature can make it difficult and costly to incorporate necessary changes. Scope creep, where additional features or functionalities are requested without a corresponding adjustment in price or schedule, is a significant concern. Furthermore, the long duration increases the risk of technological obsolescence if the system is not designed with future adaptability in mind. Contractor performance degradation over time is also a possibility that requires diligent oversight.

How effective are firm-fixed-price contracts in ensuring value for money in complex IT projects like this one?

Firm-fixed-price (FFP) contracts are generally considered effective in ensuring value for money when the scope of work is well-defined and unlikely to change significantly. For complex IT projects, FFP shifts the risk of cost overruns to the contractor, incentivizing them to manage resources efficiently and control costs. This can lead to better price certainty for the government. However, if the project scope is inherently uncertain or prone to change, FFP can lead to contractors inflating their bids to cover potential risks, or conversely, cutting corners on quality to maintain profitability. In such cases, other contract types like Cost-Plus-Fixed-Fee (CPFF) or Time-and-Materials (T&M) with strong oversight might be more appropriate, though they transfer more risk to the government.

What are the historical spending patterns for Computer Systems Design Services (NAICS 541512) within the Department of the Navy?

The Department of the Navy consistently represents a significant portion of the federal government's spending on Computer Systems Design Services (NAICS 541512). Historical data indicates a steady demand for these services, driven by the need to maintain, upgrade, and integrate complex IT systems supporting naval operations, logistics, personnel management, and administrative functions. Spending in this category often fluctuates based on major modernization initiatives, cybersecurity upgrades, and the lifecycle of existing systems. The Navy, like other large defense agencies, relies heavily on contractors for specialized IT expertise that may not be available in-house, making NAICS 541512 a critical spending category for their operational readiness and efficiency.

What does the presence of 4 bidders signify for the competitiveness of the integrated business system market for the Navy?

The presence of four bidders for this integrated business system contract signifies a healthy level of competition within this specific market segment for the Navy. It suggests that multiple companies possess the necessary technical capabilities, resources, and experience to undertake such a complex project. A competitive landscape generally leads to more innovative solutions, better pricing, and a wider array of technical approaches from which the agency can choose. It also reduces the risk of vendor lock-in and provides the government with more leverage during negotiations. The fact that four firms were willing and able to bid indicates that the opportunity was perceived as viable and potentially profitable by the market.

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 › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N3220518R1003

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: CACI International Inc

Address: 14370 NEWBROOK DRIVE STE 100, 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: $182,896,111

Exercised Options: $164,956,054

Current Obligation: $164,956,054

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $34,227,640

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HHSN316201200009W

IDV Type: GWAC

Timeline