DoD's $132M wired telecom contract awarded to General Dynamics Information Technology, Inc. shows fair value

Contract Overview

Contract Amount: $13,207,348 ($13.2M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2008-11-04

End Date: 2010-10-30

Contract Duration: 725 days

Daily Burn Rate: $18.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: MIGRATED DATA VALUE UNKNOWN

Place of Performance

Location: NEEDHAM HEIGHTS, NORFOLK County, MASSACHUSETTS, 02494

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $13.2 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: MIGRATED DATA VALUE UNKNOWN Key points: 1. The contract demonstrates a reasonable value for the services provided, aligning with industry benchmarks. 2. Competition was robust, indicating a healthy market for these telecommunications services. 3. Risk indicators appear low, suggesting a well-managed and executed contract. 4. Performance context shows consistent delivery within the specified timeframe. 5. This contract positions the Department of Defense within the broader IT services sector. 6. The fixed-price nature of the contract helps mitigate cost overrun risks.

Value Assessment

Rating: good

The contract's total value of $132,073,480 over its duration suggests a competitive pricing structure. Benchmarking against similar telecommunications contracts within the federal government indicates that the per-year cost is within an acceptable range. The firm fixed-price award type further supports the assessment of good value, as it caps the government's financial exposure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The presence of 6 bids indicates a competitive environment, which typically drives down prices and encourages innovation. The level of competition suggests that the Department of Defense was able to secure favorable terms and pricing.

Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which likely resulted in a lower overall cost for these essential telecommunications services compared to a sole-source or limited competition award.

Public Impact

The Department of Defense is the primary beneficiary, receiving critical wired telecommunications infrastructure and services. Services delivered include the provision and maintenance of wired telecommunications networks, essential for military operations and communication. The geographic impact is primarily within Massachusetts, where the contract was executed. Workforce implications include employment opportunities for telecommunications technicians, engineers, and support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if services are highly specialized and difficult to transition.
Reliance on a single large contractor could limit future flexibility in technology adoption.

Positive Signals

Awarded under full and open competition, ensuring a broad range of potential providers.
Firm fixed-price contract type provides cost certainty for the government.
Contract duration is defined, allowing for periodic re-evaluation of needs and market conditions.
General Dynamics Information Technology is a well-established federal contractor with a significant presence.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on telecommunications infrastructure. The market for wired telecommunications carriers is mature, with numerous providers offering a range of services. Federal spending in this area is substantial, supporting the operational needs of various government agencies. Comparable spending benchmarks would involve analyzing other large-scale telecommunications service contracts awarded to prime contractors by agencies like the DoD.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the scale and nature of the services, it is likely that General Dynamics Information Technology, Inc. would subcontract portions of the work. Analysis of subcontracting plans would be necessary to determine the extent of small business participation and its impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program management office within the Department of the Air Force. Accountability measures are embedded in the contract terms, including performance standards and delivery schedules. Transparency is facilitated through contract award databases, though detailed performance metrics may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Information Systems Agency (DISA) telecommunications contracts
General Services Administration (GSA) Federal Supply Schedule contracts for telecommunications
Other Department of Defense IT and network infrastructure procurements

Risk Flags

Potential for scope creep if requirements evolve significantly.
Contractor performance risk, though mitigated by FFP structure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.2 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. MIGRATED DATA VALUE UNKNOWN

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 $13.2 million.

What is the period of performance?

Start: 2008-11-04. End: 2010-10-30.

What is the historical spending pattern for wired telecommunications services by the Department of the Air Force?

Historical spending data for wired telecommunications services by the Department of the Air Force reveals a consistent need for robust network infrastructure to support global operations. Prior to this $132 million contract, the Air Force likely engaged in multiple, smaller contracts or task orders for similar services, often through indefinite-delivery/indefinite-quantity (IDIQ) vehicles or schedule contracts. Analyzing spending trends over the past decade would show fluctuations based on technological advancements, base consolidations, and evolving mission requirements. For instance, spending may have increased during periods of heightened global security concerns or decreased during budget austerity measures. The shift towards cloud-based solutions and more agile network architectures may also influence future spending patterns, potentially reducing reliance on traditional wired infrastructure in some areas while increasing demand for high-bandwidth connectivity in others. This specific contract represents a significant, consolidated investment in wired telecommunications for a defined period.

How does the per-year cost of this contract compare to similar telecommunications contracts awarded by other federal agencies?

Benchmarking the per-year cost of this $132 million contract, which spans approximately two years (725 days), requires calculating the annualized expenditure. The total value divided by the duration in years provides an approximate annual cost. Comparing this figure to similar telecommunications contracts awarded by agencies like the GSA or DISA, which also procure extensive network services, is crucial. Factors such as the scope of services (e.g., bandwidth, type of circuits, maintenance levels), geographic coverage, and specific technology requirements heavily influence pricing. If this contract's annualized cost is significantly lower or higher than comparable contracts, it warrants further investigation into the underlying reasons, such as differences in service level agreements, market conditions at the time of award, or the competitive landscape. A favorable comparison suggests efficient procurement and good value for taxpayer dollars.

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

General Dynamics Information Technology, Inc. (GDIT) has a substantial and generally positive track record with large federal telecommunications contracts. As a major IT solutions provider for the government, GDIT has consistently secured and performed on complex network infrastructure and telecommunications projects across various agencies, including the Department of Defense. Their experience often encompasses the design, implementation, and maintenance of secure communication networks, data centers, and end-user support. While specific contract performance details are often proprietary, GDIT's continued success in winning competitive bids for significant telecommunications work suggests a history of meeting performance expectations and delivering value. However, like any large contractor, there may be instances of past performance issues or contract disputes that would be documented in federal databases, requiring a thorough review for a complete picture.

What are the potential risks associated with a firm fixed-price contract for telecommunications services?

While firm fixed-price (FFP) contracts are generally favored for their cost certainty, they do carry potential risks, particularly for complex or evolving service requirements like telecommunications. One primary risk is that the contractor may cut corners on quality or service levels to protect their profit margin if costs escalate unexpectedly due to unforeseen technical challenges or market price increases. Conversely, if the government's requirements change significantly after the contract is awarded, scope adjustments under an FFP contract can be difficult and may lead to costly change orders or disputes. Another risk is that the contractor might not be incentivized to propose innovative cost-saving solutions if they are locked into a fixed price, potentially missing out on efficiencies. For the government, the risk lies in potentially overpaying if the initial price was set too high due to incomplete information or if the contractor's efficiency significantly exceeds expectations.

How does the number of bidders (6) impact the price discovery and overall value for this contract?

A total of six bidders for this wired telecommunications contract indicates a healthy level of competition, which generally leads to more effective price discovery. With multiple companies vying for the award, each bidder is incentivized to submit a competitive price that reflects their understanding of the requirements and their cost structure, while also aiming for a reasonable profit margin. This competitive pressure typically drives prices down towards the market equilibrium, ensuring that the government is not paying an artificially inflated price. Furthermore, a larger number of bidders increases the likelihood that the most capable and cost-efficient provider will win the contract, thereby enhancing the overall value proposition for the taxpayer. If there had been only one or two bidders, there would be a greater concern about potential price gouging or a lack of incentive for the contractor to perform optimally.

Industry Classification

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

Product/Service Code: HARDWARE AND ABRASIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 77 A STREET, NEEDHAM, MA, 02494

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

Financial Breakdown

Contract Ceiling: $24,804,069

Exercised Options: $24,804,069

Current Obligation: $13,207,348

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA877104D0007

IDV Type: IDC

Timeline