Treasury's IRS awarded $29.7M to General Dynamics for SRA support, a non-competitive delivery order

Contract Overview

Contract Amount: $29,761,327 ($29.8M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2003-12-15

End Date: 2006-09-29

Contract Duration: 1,019 days

Daily Burn Rate: $29.2K/day

Competition Type: NON-COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: SRA SUPPORT CONTRACT

Place of Performance

Location: NEW CARROLLTON, PRINCE GEORGE'S County, MARYLAND, 20784

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $29.8 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: SRA SUPPORT CONTRACT Key points: 1. The contract's value of $29.7 million over approximately three years suggests a significant investment in SRA support services. 2. As a non-competitive delivery order, the lack of a competitive bidding process raises questions about potential price efficiencies and market responsiveness. 3. The Cost Plus Fixed Fee (CPFF) contract type indicates that contractor costs are reimbursed, plus a fixed fee, which can incentivize cost control but also carries inherent risk. 4. The contract duration of 1019 days (approx. 2.8 years) is substantial, implying a long-term need for the services provided. 5. The award to General Dynamics Information Technology, Inc. places a large, established IT services provider in a key support role for the IRS. 6. The absence of small business set-aside flags suggests this contract was not specifically targeted to boost small business participation. 7. The contract was issued as a delivery order, implying it was likely part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract vehicle.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without knowing the specific SRA support services rendered and comparing them to similar contracts. However, a $29.7 million award over nearly three years for IT support services is a considerable sum. The CPFF structure, while common, requires careful oversight to ensure costs remain reasonable and the fixed fee provides adequate profit without being excessive. Without more detailed service descriptions and market data, it's difficult to definitively assess value for money, but the non-competitive nature warrants scrutiny.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a non-competitive delivery order, indicating that a competitive process was not utilized for this specific award. This could be due to various reasons, such as the order being placed against an existing IDIQ contract that was previously competed, or a specific justification for sole-source procurement. The lack of open competition means that the IRS did not solicit bids from multiple vendors for this particular requirement, potentially limiting price discovery and the range of innovative solutions.

Taxpayer Impact: Taxpayers may not have received the benefit of competitive pricing, which could have led to a lower overall cost for these SRA support services. The absence of competition also means fewer opportunities for a broader range of vendors to compete for government work.

Public Impact

The primary beneficiaries are the Internal Revenue Service (IRS) and its operational efficiency, which relies on effective SRA support. The services delivered likely encompass a range of IT support functions crucial for the IRS's mission, potentially including system maintenance, development, or operational assistance. The geographic impact is primarily within the IRS's operational footprint, likely concentrated where General Dynamics Information Technology, Inc. has a presence to support the agency. Workforce implications could include the employment of IT professionals by General Dynamics to fulfill the contract requirements, contributing to the IT services sector workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Non-competitive award limits price discovery and potentially leads to higher costs for taxpayers.
Cost Plus Fixed Fee (CPFF) contract type requires robust oversight to prevent cost overruns and ensure fair profit margins.
Lack of transparency in the procurement process for this specific delivery order.
Potential for vendor lock-in if this support is critical and not easily transferable.
Limited opportunities for small businesses to participate in this specific award.

Positive Signals

Award to a large, established contractor like General Dynamics suggests potential for reliable service delivery.
The contract duration indicates a sustained need and commitment to the services provided.
CPFF structure, when managed effectively, can ensure necessary resources are available to complete complex tasks.
The IRS likely has established processes for managing contracts with this vendor, potentially leading to smoother execution.

Sector Analysis

The IT services sector is a vast and competitive market, with government contracts forming a significant portion of revenue for many firms. This contract falls within the IT support and services sub-sector, which includes a wide array of offerings from system integration and maintenance to software development and cybersecurity. The market size for federal IT services is in the tens of billions of dollars annually. This specific contract, valued at approximately $29.7 million, represents a moderate-sized award within this sector, contributing to the overall spending on essential IT infrastructure and support for government agencies.

Small Business Impact

The data indicates that this contract was not awarded as a small business set-aside (ss=false, sb=false). This means that there was no specific provision to reserve this contract for small businesses. Consequently, the primary contractor, General Dynamics Information Technology, Inc., is a large business. While large businesses may engage in subcontracting with small businesses, the absence of a set-aside suggests that opportunities for small business participation were not a primary consideration in the initial award decision for this specific delivery order. The impact on the small business ecosystem is neutral to negative in terms of direct award opportunities for this particular contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program/technical points of contact within the IRS. As a Cost Plus Fixed Fee (CPFF) contract, rigorous financial oversight is crucial to monitor incurred costs and ensure the fixed fee is justified. Transparency is limited by the non-competitive nature of the award. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise related to the contract's performance or administration.

Related Government Programs

IRS IT Modernization Programs
Federal IT Services Procurement
General Dynamics IT Contracts
Cost-Plus-Fixed-Fee Contracts
Non-Competitive Contract Awards

Risk Flags

Non-competitive award
Cost-Plus contract type requires close monitoring
Lack of detailed service description
Potential for cost overruns
Limited transparency in procurement

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $29.8 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. SRA SUPPORT 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 the Treasury (Internal Revenue Service).

What is the total obligated amount?

The obligated amount is $29.8 million.

What is the period of performance?

Start: 2003-12-15. End: 2006-09-29.

What specific SRA support services were provided under this contract?

The provided data abbreviates the contract description as 'SRA SUPPORT CONTRACT,' indicating services related to 'Support, Readiness, and Acquisition' or similar functions. Without further details, it's difficult to pinpoint the exact nature of the SRA support. These services could range from IT infrastructure management, system development and maintenance, cybersecurity operations, data analytics, to program management support for IRS initiatives. The 'Support, Readiness, and Acquisition' acronym often implies a broad scope encompassing the lifecycle of systems and programs, ensuring they are operational, maintained, and acquired effectively. The specific tasks would be detailed in the contract's Statement of Work (SOW).

How does the $29.7 million value compare to similar IRS IT support contracts?

Comparing the $29.7 million value requires context on the typical scale of IRS IT support contracts. The IRS, as a large federal agency with complex IT needs, often awards multi-million dollar contracts for IT services. Contracts for system development, maintenance, and operational support can easily reach tens or hundreds of millions of dollars over their lifecycle. This $29.7 million award, spanning approximately 2.8 years, appears to be a significant but not exceptionally large contract within the IRS's IT spending portfolio. Benchmarking would ideally involve comparing it to contracts for similar SRA functions, duration, and complexity, ideally awarded competitively to assess value.

What are the risks associated with a non-competitive delivery order for IT support?

The primary risk of a non-competitive delivery order is the potential for reduced value for money. Without competition, there is less pressure on the contractor to offer the lowest possible price, and the government may not benefit from the full range of innovative solutions available in the market. This can lead to higher costs for taxpayers. Additionally, a lack of competition can sometimes indicate a lack of market research or a failure to plan adequately for procurement needs. For IT support, risks also include potential vendor lock-in, where the agency becomes overly reliant on a single provider, making future transitions difficult and costly.

What is the significance of the Cost Plus Fixed Fee (CPFF) contract type for this SRA support?

The Cost Plus Fixed Fee (CPFF) contract type means the contractor is reimbursed 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 at the outset or involves a high degree of uncertainty, common in complex IT projects. For SRA support, it allows flexibility to adapt to evolving requirements. However, it places a significant burden on the government to meticulously audit costs to ensure they are reasonable and allocable. The fixed fee incentivizes the contractor to control costs to maximize profit, but the government must ensure the fee itself is fair and not excessive, and that the total cost remains within budget.

What is General Dynamics Information Technology, Inc.'s track record with federal IT contracts?

General Dynamics Information Technology, Inc. (GDIT) is a major federal IT contractor with a long history of performance across numerous civilian and defense agencies. They have a substantial portfolio of contracts covering a wide range of IT services, including cloud computing, cybersecurity, data analytics, enterprise IT, and mission-critical systems support. GDIT has consistently secured large, complex contracts, indicating a strong capability to meet government requirements. Their track record generally reflects experience in delivering large-scale IT solutions, though like any large contractor, specific contract performance can vary. Reviewing individual contract performance histories and past performance evaluations would provide a more granular assessment.

How has IRS spending on SRA support evolved over time?

The provided data is for a single contract awarded in December 2003. To assess historical spending patterns for IRS SRA support, a broader analysis of multiple contracts over several fiscal years would be necessary. This would involve examining annual spending trends, identifying key contractors, and understanding shifts in technology or service requirements. Without access to historical IRS procurement data beyond this single award, it's impossible to determine the evolution of spending on SRA support. Such an analysis would likely reveal changes driven by modernization efforts, evolving tax laws, and shifts in IT strategy.

Competition & Pricing

Extent Competed: NON-COMPETITIVE DELIVERY ORDER

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Parent Company: Sterling Parent Inc. (UEI: 968838909)

Address: 4300 FAIR LAKES CT, FAIRFAX, VA, 11

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $33,978,568

Exercised Options: $33,669,795

Current Obligation: $29,761,327

Parent Contract

Parent Award PIID: TIRNO00D00020

IDV Type: IDC

Timeline