DoD's $12M IT contract with General Dynamics saw 5 bidders, raising questions about value and competition

Contract Overview

Contract Amount: $11,957,568 ($12.0M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2007-09-15

End Date: 2010-09-14

Contract Duration: 1,095 days

Daily Burn Rate: $10.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: BROOKS CITY-BASE INFORMATION TEHNOLOGY CONTRACT

Place of Performance

Location: NEEDHAM HEIGHTS, NORFOLK County, MASSACHUSETTS, 02494

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $12.0 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: BROOKS CITY-BASE INFORMATION TEHNOLOGY CONTRACT Key points: 1. The contract's value appears moderate for IT services, but detailed performance metrics are needed for a full assessment. 2. With five bidders, the competition level suggests a reasonably open market, potentially leading to better pricing. 3. The Time and Materials pricing structure carries inherent risk of cost overruns if not closely managed. 4. This contract falls within the broader category of telecommunications services, a critical area for military operations. 5. The duration of the contract (nearly 3 years) indicates a need for sustained IT support. 6. The absence of small business set-aside flags suggests larger prime contractors were expected to perform the work.

Value Assessment

Rating: fair

The total award amount of approximately $12 million for nearly three years of IT services is within a typical range for such contracts. However, without specific details on the services rendered and performance outcomes, a definitive value-for-money assessment is challenging. Comparing this to similar wired telecommunications carrier contracts awarded by the Air Force or other DoD branches would provide better context. The Time and Materials (T&M) pricing model, while flexible, can sometimes lead to higher costs if not meticulously managed and monitored for efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with five bids received. This level of competition is generally positive, indicating that multiple vendors were interested and capable of performing the required services. A higher number of bidders typically allows for greater price discovery and can incentivize contractors to offer more competitive terms. The specific details of the bidding process and the evaluation criteria would further illuminate the effectiveness of the competition.

Taxpayer Impact: The full and open competition suggests that taxpayers benefited from a competitive bidding process, likely resulting in a more favorable price than a sole-source award. The presence of five bidders indicates a healthy market for these services, preventing a single vendor from dictating terms.

Public Impact

The Department of the Air Force is the primary beneficiary, receiving essential wired telecommunications support. This contract ensures the continuity of critical IT infrastructure and communication services for military operations. The geographic impact is likely concentrated around the Air Force bases or facilities where the services were deployed. The contract supports a workforce of IT professionals employed by General Dynamics Information Technology, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Time and Materials (T&M) contract type can lead to cost overruns if not closely monitored, as it pays for labor hours and materials directly.
Lack of specific performance metrics makes it difficult to assess if the full value of the $12M was realized.
The contract's duration of nearly three years could indicate a long-term reliance on this specific vendor, potentially limiting future competitive opportunities.

Positive Signals

Awarded under full and open competition, suggesting a robust market and potentially competitive pricing.
Five bidders participated, indicating significant interest and capability in the market for these services.
The contract supports essential IT infrastructure for the Department of the Air Force, a critical government function.

Sector Analysis

This contract falls under the Information Technology sector, specifically within the Wired Telecommunications Carriers industry (NAICS 517110). This industry is characterized by the provision of telecommunications services over wired networks, including voice and data transmission. The market size for government IT services is substantial, with agencies increasingly relying on robust telecommunications infrastructure for operations. Comparable spending benchmarks for similar IT support contracts within the Department of Defense can vary widely based on scope, duration, and technology requirements.

Small Business Impact

The contract was not set aside for small businesses, and the 'sb' field is false. This suggests that the requirement was likely geared towards larger prime contractors with the capacity and expertise to handle the scope of work. While there's no direct indication of subcontracting plans for small businesses within the provided data, it's common for large prime contractors to engage small businesses for specialized IT services, though this contract's structure doesn't mandate it.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Accountability measures would be tied to the contract's performance clauses and delivery requirements. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

DoD IT Services Contracts
Air Force Telecommunications Procurement
General Dynamics IT Contracts
Wired Network Infrastructure Services
Time and Materials IT Contracts

Risk Flags

Time and Materials Pricing Risk
Potential for Cost Overruns
Lack of Specific Performance Metrics
Limited Small Business Prime Participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.0 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. BROOKS CITY-BASE INFORMATION TEHNOLOGY CONTRACT

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 Air Force).

What is the total obligated amount?

The obligated amount is $12.0 million.

What is the period of performance?

Start: 2007-09-15. End: 2010-09-14.

What specific wired telecommunications services were provided under this contract?

The provided data indicates the contract falls under NAICS code 517110 (Wired Telecommunications Carriers), suggesting services related to the installation, maintenance, and operation of wired communication networks. This could encompass a range of activities such as providing broadband internet access, dedicated data lines, voice communication systems (like PBX or VoIP infrastructure), and associated network management. Without more detailed contract line item numbers (CLINs) or a statement of work (SOW), the precise nature of the services remains general. However, for the Department of the Air Force, these services are critical for maintaining operational command and control, data transfer, and internal communications across its facilities.

How does the $12 million award compare to similar IT contracts for wired telecommunications within the DoD?

Comparing the $12 million award for a nearly three-year contract requires context regarding the specific services and scale. For instance, a contract solely for basic internet service provision might be considered high, while one encompassing complex network design, implementation, and ongoing maintenance for multiple large bases could be seen as reasonable. General Dynamics Information Technology, Inc. is a major IT contractor, and their pricing can vary based on market conditions and the specific value proposition. Benchmarking against other DoD contracts for similar NAICS codes (517110) and contract types (Time and Materials) awarded around the 2007-2010 timeframe would be necessary for a precise comparison. However, $12 million over three years averages to $4 million annually, which is a moderate figure for comprehensive IT infrastructure support in a large organization like the Air Force.

What are the primary risks associated with the Time and Materials (T&M) contract type used here?

The primary risk with Time and Materials (T&M) contracts, like the one awarded to General Dynamics Information Technology, Inc., is the potential for cost overruns. Unlike fixed-price contracts, T&M contracts reimburse the contractor for direct labor hours at specified hourly rates and for the actual cost of materials used. This structure provides flexibility but lacks a definitive ceiling on the total cost unless a contract ceiling is explicitly stated and enforced. If the contractor's labor hours are inefficient, or if project scope creep occurs without adequate oversight, the total expenditure can significantly exceed initial estimates. Effective management requires rigorous monitoring of labor hours, detailed justification for work performed, and strong program management to control scope and ensure efficiency.

What does the fact that this contract was not a small business set-aside imply?

The absence of a small business set-aside designation for this $12 million IT contract implies that the Department of the Air Force determined that full and open competition among all capable contractors, including large businesses, was the most appropriate procurement strategy. This could be due to the specialized nature of the wired telecommunications services required, the scale of the project, or the expectation that only larger firms possessed the necessary resources, technical expertise, or security clearances. While it doesn't preclude small businesses from subcontracting, it means the primary contract was not specifically reserved to encourage their participation as prime contractors.

How effective was the competition, given five bidders responded?

Receiving five bids for this contract is generally considered a positive indicator of effective competition. It suggests that the market for these wired telecommunications services was sufficiently robust and that the solicitation was accessible to multiple capable vendors. A higher number of bidders typically leads to better price discovery and allows the procuring agency to select from a wider range of technical solutions and pricing structures. While five bidders represent healthy competition, the ultimate effectiveness also depends on the quality of the bids received, the evaluation process, and whether the chosen offer truly represented the best value considering both technical merit and cost. Without knowing the specific details of the bids and the evaluation criteria, it's difficult to definitively state the *degree* of effectiveness, but the number itself is a good starting point.

Industry Classification

NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers

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: 5

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 77 A STREET, NEEDHAM, MA, 04

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $36,669,270

Exercised Options: $31,483,088

Current Obligation: $11,957,568

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA877104D0007

IDV Type: IDC

Timeline