DoD's $883.8M IT services contract awarded to Computer Sciences Corporation shows significant cost overruns

Contract Overview

Contract Amount: $22,797,885 ($22.8M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2004-11-01

End Date: 2007-10-31

Contract Duration: 1,094 days

Daily Burn Rate: $20.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: 200502!000157!1700!N65538!NAVAL SEA LOGISTICS CENTER !GS35F4381G !C!N! !Y!N6553805F0031! !20041101!20051031!883778896!883778896!009581091!N!COMPUTER SCIENCES CORPORATION !7700 HUBBLE DR !LANHAM SEABROO !MD!20706!45550!033!24!LANHAM !PRINCE GEORGE S !MARYLAND !+000002265524!N!N!000000000000!D306!ADP SYSTEMS ANALYSIS SERVICES !S1 !SERVICES !000 !* !541519!E! !6! ! ! ! ! !20200930!B!E!Y! ! !A! ! ! !000! ! ! ! ! ! ! !Y!C!N!N! ! ! ! ! ! !000! ! ! ! ! ! ! !1700!N65538!0001! !

Place of Performance

Location: LANHAM, PRINCE GEORGE'S County, MARYLAND, 20706

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $22.8 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: 200502!000157!1700!N65538!NAVAL SEA LOGISTICS CENTER !GS35F4381G !C!N! !Y!N6553805F0031! !20041101!20051031!883778896!883778896!009581091!N!COMPUTER SCIENCES CORPORATION !7700 HUBBLE DR !LANHAM SEABROO !MD!20706!45550!033!24!LANHAM !PRIN… Key points: 1. Contract value escalated by over $22.7M from initial award, indicating potential underestimation or scope creep. 2. Sole-source award to Computer Sciences Corporation raises questions about competition and potential for better pricing. 3. Significant cost growth suggests potential risks in project management, oversight, or initial pricing. 4. Contract performance period of nearly three years (1094 days) provided ample time for cost escalation. 5. The 'ADP Systems Analysis Services' category suggests a focus on critical IT infrastructure support. 6. Awarded by the Naval Sea Logistics Center, highlighting a specific defense logistics need.

Value Assessment

Rating: concerning

The final contract value of $883.8M represents a substantial increase from the initial award amount, suggesting significant cost growth over the contract's lifecycle. Without detailed breakdowns of the cost increases, it's difficult to ascertain the precise reasons, but this level of escalation warrants scrutiny. Benchmarking against similar IT services contracts for the Department of Defense is challenging without more granular data on the specific services rendered and the complexity involved. However, such a large percentage increase typically signals potential issues with initial cost estimation, scope management, or unforeseen technical challenges.

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 were likely considered. However, the data provided does not specify the number of bids received or the nature of the competition. A full and open competition is generally expected to yield competitive pricing. The significant cost growth despite this competition suggests that either the initial bids were not sufficiently competitive, or that factors beyond the initial competition led to the cost escalation.

Taxpayer Impact: While a full and open competition is ideal for taxpayer value, the substantial cost increase post-award suggests that the competitive process may not have fully captured the long-term cost implications or that subsequent changes drove up expenses.

Public Impact

Naval Sea Logistics Center personnel likely benefited from enhanced ADP systems analysis and support. The contract supported critical IT infrastructure and services for naval logistics operations. The geographic impact is primarily within the Department of the Navy's operational and administrative centers. The contract supported the workforce of Computer Sciences Corporation, contributing to employment in IT services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Significant cost escalation from initial award to final value.
Lack of transparency regarding the specific drivers of cost overruns.
Potential for initial underestimation of project scope or complexity.
The contract's duration allowed for extended periods of potential cost growth.

Positive Signals

Awarded through full and open competition, suggesting an attempt at market-based pricing.
Contract provided essential IT services to a key defense logistics entity.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on IT services and ADP systems analysis. The IT services market for the federal government is substantial, with significant spending allocated to software development, system integration, and IT support. Contracts like this are crucial for maintaining the operational capabilities of defense agencies. Comparable spending benchmarks would typically involve analyzing IT services contracts awarded by other branches of the military or defense agencies for similar scope and complexity.

Small Business Impact

The provided data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a set-aside provision. The prime contractor, Computer Sciences Corporation, is a large entity, and any subcontracting would likely be with other large or mid-tier firms, or potentially specialized small businesses if required for specific technical needs not detailed here.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the Naval Sea Logistics Center's contracting officers and program managers. Accountability measures would be tied to performance metrics and delivery schedules outlined in the contract. Transparency is assessed through the availability of contract data, such as award amounts and contract types, which is partially available here. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's performance or close-out.

Related Government Programs

Naval Sea Logistics Center IT Support Services
Department of Defense IT Services Contracts
Computer Sciences Corporation Federal Contracts
ADP Systems Analysis Services
Defense Logistics IT Modernization

Risk Flags

Significant Cost Growth
Potential for Scope Creep
Lack of Detailed Performance Data
Extended Contract Duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.8 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. 200502!000157!1700!N65538!NAVAL SEA LOGISTICS CENTER !GS35F4381G !C!N! !Y!N6553805F0031! !20041101!20051031!883778896!883778896!009581091!N!COMPUTER SCIENCES CORPORATION !7700 HUBBLE DR !LANHAM SEABROO !MD!20706!45550!033!24!LANHAM !PRINCE GEORGE S !MARYLAND !+000002265524!N!N!000000000000!D306!ADP SYSTEMS ANALYSIS SERVICES !S1 !SERVICES !000 !* !541519!E! !6! ! ! ! ! !202

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 $22.8 million.

What is the period of performance?

Start: 2004-11-01. End: 2007-10-31.

What were the primary drivers for the significant cost increase from the initial award to the final value of this contract?

The provided data indicates a substantial increase from an initial award value (implied by the data structure, though not explicitly stated as 'initial award') to a final value of $883.8M. Without access to contract modification details, the specific drivers remain unclear. Potential reasons for such escalation in IT services contracts include scope creep (expansion of services beyond the original agreement), unforeseen technical challenges requiring additional resources or time, changes in government requirements, inflation impacting labor and material costs over the contract's duration, or initial underestimation of the project's complexity and resource needs. Detailed contract modification histories and performance reports would be necessary to pinpoint the exact causes.

How does the final contract value of $883.8M compare to similar IT services contracts awarded by the Department of Defense during the same period?

Comparing the final value of $883.8M requires context regarding the specific services rendered (ADP Systems Analysis Services) and the contract type (Time and Materials). During the mid-2000s, large IT services contracts for the DoD often ran into hundreds of millions of dollars, especially for complex system analysis and support. However, the significant escalation from an implied initial award to $883.8M is a key point of comparison. Contracts with similar scope and duration, especially those awarded via full and open competition, would ideally show more contained cost growth. A benchmark analysis would involve identifying comparable contracts, examining their total values, duration, and cost growth patterns to assess if this contract's escalation was an outlier or within an expected range for its time.

What were the specific performance metrics and outcomes achieved under this contract, and how do they justify the final expenditure?

The provided data does not include specific performance metrics or outcomes achieved under this contract. Performance evaluation typically relies on contractually defined deliverables, service level agreements (SLAs), and key performance indicators (KPIs). Justifying the final expenditure of $883.8M would necessitate a review of whether Computer Sciences Corporation met or exceeded these performance standards. Without this information, it is impossible to assess the value for money or the effectiveness of the IT services provided in supporting the Naval Sea Logistics Center's mission. Reports from the contracting officer and end-users would be crucial for this assessment.

What is the track record of Computer Sciences Corporation (CSC) in managing large federal IT services contracts, particularly concerning cost control and project delivery?

Computer Sciences Corporation (now part of DXC Technology) has historically been a major federal IT contractor. Their track record with large contracts is extensive, encompassing a wide range of services and agencies. While CSC has successfully delivered numerous complex projects, like any large contractor, they have also faced scrutiny over cost overruns and project challenges on certain contracts. Assessing their specific track record for this particular contract requires examining performance reviews, contract modifications, and any disputes or audits related to their work. Generally, CSC's history suggests a capacity for large-scale delivery but also highlights the inherent risks associated with managing complex, long-term government IT projects, where cost control can be a significant challenge.

Given the 'full and open competition' award type, why did the contract experience such significant cost growth, and were there any issues with the initial bidding process?

The fact that a 'full and open competition' contract experienced significant cost growth suggests several possibilities. Firstly, the initial bids might have been based on incomplete information or optimistic projections, leading to a lower initial award value that did not fully account for the project's eventual scope or complexities. Secondly, post-award changes, such as scope creep or evolving requirements from the Naval Sea Logistics Center, could have necessitated contract modifications that increased the total cost. Thirdly, unforeseen technical hurdles or market changes (e.g., labor rate increases) could have contributed. Without detailed records of the bidding process and subsequent contract modifications, it's difficult to definitively state whether the issue lies with the initial bidding, post-award management, or a combination of factors. However, substantial growth often indicates a disconnect between initial estimates and final execution.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related 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

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Contractor Details

Parent Company: Computer Sciences Corporation (UEI: 009581091)

Address: 15000 CONFERENCE CENTER DR, CHANTILLY, VA, 90

Business Categories: Category Business, Not Designated a Small Business

Parent Contract

Parent Award PIID: GS35F4381G

IDV Type: FSS

Timeline