General Dynamics IT awarded $124.5M for Naval Installations IT Support, facing potential value concerns

Contract Overview

Contract Amount: $124,532,545 ($124.5M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2020-01-31

End Date: 2025-04-30

Contract Duration: 1,916 days

Daily Burn Rate: $65.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: INFORMATION TECHNOLOGY (IT) SUPPORT TO COMMANDER, NAVAL INSTALLATIONS COMMAND (CNIC).

Place of Performance

Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22042

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $124.5 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: INFORMATION TECHNOLOGY (IT) SUPPORT TO COMMANDER, NAVAL INSTALLATIONS COMMAND (CNIC). Key points: 1. Contract value appears high relative to duration, warranting scrutiny of unit costs and service scope. 2. Full and open competition suggests a competitive environment, but pricing effectiveness needs validation. 3. Risk indicators include potential for cost overruns given the Cost Plus Fixed Fee structure. 4. Performance context is critical; IT support for a major command requires robust service delivery. 5. Positioned within the IT services sector, this contract supports essential defense infrastructure.

Value Assessment

Rating: fair

The contract's total value of $124.5 million over approximately 5 years (1916 days) suggests a significant annual spend. Benchmarking against similar IT support contracts for large federal commands is necessary to assess if the pricing is competitive. The Cost Plus Fixed Fee (CPFF) contract type introduces inherent risk for cost control, as the contractor is reimbursed for allowable costs plus a fixed fee. Without detailed service level agreements and performance metrics, it's difficult to definitively assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. This competitive process is generally favorable for price discovery and achieving market-based pricing. However, the number of actual bidders and the specific evaluation criteria are not detailed here, which could influence the degree of effective competition achieved.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that should theoretically drive down costs and ensure fair pricing for essential IT services.

Public Impact

Naval Installations Command (CNIC) personnel benefit from reliable IT infrastructure and support services. Services delivered include IT support, likely encompassing network management, help desk, and system maintenance. Geographic impact is broad, covering all installations managed by CNIC. Workforce implications may include the retention of skilled IT professionals within General Dynamics IT and potentially subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can incentivize higher spending if not tightly managed.
Long contract duration (over 5 years) increases exposure to potential scope creep and cost escalation.
Lack of specific performance metrics in the provided data makes it hard to gauge service quality and efficiency.
Potential for vendor lock-in if transition to a new contractor is complex or costly.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process.
General Dynamics Information Technology is a large, established contractor with significant experience in federal IT services.
The contract supports a critical function for the Department of the Navy, indicating strategic importance.

Sector Analysis

This contract falls within the broader IT services sector, a significant area of federal spending. The market for large-scale IT support contracts is dominated by major defense contractors and specialized IT firms. Benchmarks for similar contracts often vary widely based on scope, duration, and specific services required, but contracts of this magnitude typically involve complex infrastructure and extensive support requirements.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses mandated by a set-aside. However, the prime contractor, General Dynamics IT, may engage small businesses as subcontractors for specialized services, contributing to the broader small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy and the Naval Installations Command. The Cost Plus Fixed Fee structure necessitates rigorous financial oversight to ensure allowable costs are properly documented and justified. Transparency is dependent on the agency's reporting practices and the availability of contract performance data. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Information Warfare Systems Command (NAVWAR) contracts
Department of Defense IT Modernization Programs
Federal Civilian IT Support Services
Command and Control Systems Support

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type requires diligent oversight to manage costs.
Long contract duration increases potential for scope creep and cost escalation.
Lack of detailed performance metrics in summary data hinders value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $124.5 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. INFORMATION TECHNOLOGY (IT) SUPPORT TO COMMANDER, NAVAL INSTALLATIONS COMMAND (CNIC).

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 $124.5 million.

What is the period of performance?

Start: 2020-01-31. End: 2025-04-30.

What is the historical spending pattern for IT support services at the Naval Installations Command?

Historical spending data for IT support at CNIC would provide crucial context for the current $124.5 million award. Analyzing past contract values, durations, and the types of services procured can reveal trends in IT investment and identify any significant increases or decreases in spending. For instance, if previous contracts were significantly smaller or shorter, this current award might represent an expansion of services or a shift in strategy. Conversely, if spending has been consistently high, it suggests a stable, ongoing need for these services. Understanding historical spending also helps in identifying potential cost efficiencies or areas where spending has escalated over time, informing future budget allocations and contract negotiations.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for similar IT support services in the federal government?

The Cost Plus Fixed Fee (CPFF) contract type reimburses the contractor for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is often used when the scope of work is not precisely defined or when there is uncertainty about the costs involved, such as in research and development or complex IT projects. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers less cost certainty for the government, as costs can exceed initial estimates. However, it can be advantageous when innovation or flexibility is paramount. For IT support, FFP might be preferred for well-defined services, while CPFF could be suitable for evolving requirements or system integration projects. The key risk with CPFF is ensuring robust government oversight to control costs and prevent contractor inefficiencies from inflating the final price.

What are the specific performance metrics and Service Level Agreements (SLAs) associated with this contract?

Specific performance metrics and Service Level Agreements (SLAs) are critical for evaluating the effectiveness and value of this IT support contract. While not detailed in the provided data, these metrics typically define the expected quality, availability, and responsiveness of the IT services. Examples include network uptime percentages, help desk response times, incident resolution rates, and system performance benchmarks. Robust SLAs allow the government to hold the contractor accountable for service delivery and provide a basis for performance evaluations, potential award fees, or penalties. Without clear SLAs, assessing whether General Dynamics IT is meeting the needs of the Naval Installations Command and delivering value for the $124.5 million investment becomes significantly more challenging.

What is General Dynamics Information Technology's track record with similar large-scale IT support contracts for the Department of Defense?

General Dynamics Information Technology (GDIT) has a substantial track record with large-scale IT support contracts across the federal government, including significant work with the Department of Defense (DoD). They have historically managed complex IT infrastructure, cybersecurity, and enterprise IT services for various military branches and agencies. Evaluating their past performance on similar contracts would involve reviewing past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), any past disputes or contract terminations, and their demonstrated ability to meet cost, schedule, and performance requirements. A strong history suggests a lower risk profile for this contract, while past issues might indicate areas requiring closer monitoring.

How does the $124.5 million contract value compare to the total IT spending of the Naval Installations Command?

To assess the significance of the $124.5 million contract, it needs to be compared against the Naval Installations Command's (CNIC) overall IT budget or total spending. If CNIC's total IT budget is several hundred million or billions of dollars, this contract represents a substantial but potentially manageable portion. Conversely, if the total IT budget is closer to this figure, it indicates a highly concentrated investment in this specific IT support function. Understanding this ratio helps determine the contract's strategic importance within CNIC's IT portfolio and highlights the potential impact of any performance issues or cost overruns. This context is vital for resource allocation decisions and risk management.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering 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: N6523619R3510

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, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $126,675,547

Exercised Options: $126,528,696

Current Obligation: $124,532,545

Actual Outlays: $5,479,097

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D7693

IDV Type: IDC

Timeline