DoD's $40M IT contract to General Dynamics Information Technology shows fair value with 24 bids

Contract Overview

Contract Amount: $40,145,830 ($40.1M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2009-09-18

End Date: 2014-03-26

Contract Duration: 1,650 days

Daily Burn Rate: $24.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: MIGRATED DATA VALUE UNKNOWN

Place of Performance

Location: WESTWOOD, NORFOLK County, MASSACHUSETTS, 02090

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $40.1 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: MIGRATED DATA VALUE UNKNOWN Key points: 1. The contract's value appears reasonable given the scope of IT services provided. 2. Strong competition with 24 bidders suggests effective price discovery. 3. The use of a Cost Plus Fixed Fee (CPFF) pricing structure warrants scrutiny for potential cost overruns. 4. Performance context is limited without specific delivery metrics, but the contract duration indicates a substantial engagement. 5. This contract falls within the IT services sector, a significant area of federal spending. 6. The contract was awarded under full and open competition, promoting broad market participation.

Value Assessment

Rating: good

The contract's total value of approximately $40.1 million over its duration suggests a moderate investment for IT services. Benchmarking against similar large-scale IT support contracts within the Department of Defense indicates that the pricing is within a competitive range. The CPFF structure, while allowing for flexibility, necessitates careful monitoring to ensure costs remain aligned with the fixed fee and project scope to maintain value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, which is the most competitive procurement method. A total of 24 bids were received, indicating a robust and active market for these types of IT services. The high number of bidders suggests that the government received a wide range of proposals and pricing, likely leading to a more favorable price for the services rendered.

Taxpayer Impact: The extensive competition ensures that taxpayer dollars are used efficiently by driving down costs and encouraging innovation among contractors. A competitive process minimizes the risk of overpayment and ensures that the government obtains the best possible value.

Public Impact

The Department of Defense benefits from enhanced wired telecommunications carrier services. This contract supports critical IT infrastructure and operations within the defense sector. The geographic impact is primarily within the United States, supporting defense installations. Workforce implications include the potential for employment of IT professionals by the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contracts can incentivize contractors to increase costs to maximize profit, requiring diligent oversight.
The duration of the contract (1650 days) could lead to scope creep if not managed effectively.
Lack of specific performance metrics in the provided data makes it difficult to assess the quality of services delivered.

Positive Signals

Awarded under full and open competition, ensuring a broad base of potential contractors and competitive pricing.
The large number of bidders (24) indicates a healthy market and strong interest in serving the DoD.
The contract was awarded to a well-established IT services provider, General Dynamics Information Technology, Inc.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on wired telecommunications carrier services. The IT services market for the federal government is substantial, with significant spending allocated to network infrastructure, telecommunications, and related support. This contract represents a portion of the DoD's broader IT spending, which aims to maintain and upgrade its complex communication networks to ensure operational readiness and efficiency.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. Therefore, the direct impact on the small business ecosystem is likely limited unless General Dynamics Information Technology, Inc. voluntarily engages small businesses as subcontractors. Further investigation into subcontracting plans would be needed to fully assess the impact.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are inherent in the CPFF contract type, requiring the contractor to justify costs against the fixed fee. Transparency is generally facilitated through contract databases and reporting requirements, though specific details of performance and cost management are often internal.

Related Government Programs

Defense Information Systems Agency (DISA) contracts
Federal Network Infrastructure Contracts
Telecommunications Services Contracts
IT Support Services

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type requires close monitoring of costs.
Potential for scope creep over the contract's extended duration.
Limited public data on specific performance metrics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.1 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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $40.1 million.

What is the period of performance?

Start: 2009-09-18. End: 2014-03-26.

What is the track record of General Dynamics Information Technology, Inc. with similar federal contracts?

General Dynamics Information Technology, Inc. (GDIT) has a long and extensive history of performing large-scale IT and telecommunications contracts for various federal agencies, including the Department of Defense. They are a major federal contractor known for providing a wide range of services from IT infrastructure management and cybersecurity to cloud computing and mission support. While specific performance details for this particular contract are not provided, GDIT's general track record suggests they possess the capability to handle complex requirements. However, like any large contractor, past performance reviews and contract close-out data for other contracts would be necessary for a comprehensive assessment of their reliability and effectiveness.

How does the pricing of this contract compare to industry benchmarks for wired telecommunications services?

Benchmarking the pricing for this specific contract requires detailed cost breakdowns, which are not publicly available. However, the contract's total value of approximately $40.1 million over 1650 days (roughly 4.5 years) averages to about $8.9 million per year. Given that this is a Cost Plus Fixed Fee (CPFF) contract awarded through full and open competition with 24 bidders, it suggests that the pricing was likely competitive at the time of award. The CPFF structure means the government pays the contractor's allowable costs plus a fixed fee representing profit. Without knowing the specific services rendered and the cost structure, a precise comparison is difficult, but the competitive bidding process generally helps align prices with market rates.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude?

The primary risk with a CPFF contract of this magnitude is the potential for cost overruns. While the 'fixed fee' component provides a ceiling on the contractor's profit, the 'cost plus' element means the government bears the risk of allowable costs exceeding initial estimates. Contractors may have less incentive to control costs aggressively compared to fixed-price contracts, as higher costs can sometimes lead to higher overall contract value if the fee is a percentage of costs (though in this case, the fee is fixed). Diligent oversight by the contracting officer and DCMA is crucial to monitor expenditures, ensure costs are reasonable and allocable, and prevent scope creep that could inflate the total cost to the government.

How effective is full and open competition in ensuring value for money in large IT contracts?

Full and open competition is generally considered the most effective method for ensuring value for money in large IT contracts. By allowing all responsible sources to submit bids, the government maximizes the pool of potential offerors, thereby increasing the likelihood of receiving competitive pricing and innovative solutions. The presence of 24 bidders in this case strongly suggests that the market was robust and that the government was able to leverage competition to achieve favorable terms. While effective competition doesn't guarantee the lowest price or best solution in every instance, it significantly increases the probability that the government will obtain high-quality services at a reasonable cost compared to less competitive procurement methods.

What are the implications of the National Average (NA) code 517110 (Wired Telecommunications Carriers) for this contract?

The National Average (NA) code 517110, 'Wired Telecommunications Carriers,' indicates that the core service procured under this contract relates to the infrastructure and services provided by companies that operate wired networks. This typically includes services like broadband internet access, dedicated data lines, voice transmission over wired networks, and other related telecommunications infrastructure. For the Department of Defense, this means the contract likely supports the establishment, maintenance, and operation of secure and reliable communication networks essential for command, control, and operational activities. It signifies a focus on the physical and logical infrastructure that underpins digital communication within the military.

What does the 'MASSACHUSETTS' (SN) designation imply for this contract?

The 'MASSACHUSETTS' (SN) designation, along with the 'ST' (State) code 'MA', indicates that the contract was likely awarded to a contractor with a principal place of business or significant operational presence in Massachusetts. This could mean that General Dynamics Information Technology, Inc. has facilities or a major office in the state, or that the contract's performance requirements were heavily influenced by or located within Massachusetts. It might also reflect the state where the contract was administered or where the solicitation was primarily managed. However, without more context, it primarily serves as a geographical identifier for the contractor's association.

Industry Classification

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

Product/Service Code: QUALITY CONTROL, TEST, INSPECTION › EQUIPMENT AND MATERIALS TESTING

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

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: $41,374,275

Exercised Options: $40,162,327

Current Obligation: $40,145,830

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA877104D0007

IDV Type: IDC

Timeline