State Department's $16.2M IT support contract to CGI Federal raises questions on competition and value

Contract Overview

Contract Amount: $16,243,798 ($16.2M)

Contractor: CGI Federal Inc.

Awarding Agency: Department of State

Start Date: 2010-03-11

End Date: 2013-11-11

Contract Duration: 1,341 days

Daily Burn Rate: $12.1K/day

Competition Type: NOT COMPETED

Pricing Type: LABOR HOURS

Sector: IT

Official Description: JFMS FUNCTIONAL AND PROGRAM SUPPORT SERVICES

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22219

State: Virginia Government Spending

Plain-Language Summary

Department of State obligated $16.2 million to CGI FEDERAL INC. for work described as: JFMS FUNCTIONAL AND PROGRAM SUPPORT SERVICES Key points: 1. Contract awarded via a non-competitive process, limiting price discovery and potentially increasing costs. 2. Significant duration of the contract (over 3 years) suggests a long-term need for these services. 3. The 'Other Computer Related Services' NAICS code indicates a broad scope, potentially encompassing various IT functions. 4. Awarded as a BPA Call, suggesting it was part of a pre-existing agreement, but the specific BPA's competition level is unknown. 5. The contract's value, while substantial, needs benchmarking against similar IT support services to assess value for money. 6. Lack of competition is a key risk indicator for potential overpricing and reduced service quality.

Value Assessment

Rating: questionable

Benchmarking the value of this $16.2 million contract is challenging without comparable data for similar IT functional and program support services. The 'Other Computer Related Services' NAICS code is broad. Given the contract was not competed, it is difficult to assess if the pricing reflects fair market value or if taxpayers received optimal value for money. Further analysis would require comparing the labor hours and rates to industry benchmarks for comparable IT support roles within the federal government or private sector.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning CGI Federal Inc. was the only vendor considered. This lack of competition prevents other qualified vendors from bidding, which typically drives down prices and encourages innovation. The decision to not compete suggests potential reasons such as urgency, unique capabilities, or prior relationship, but these are not detailed in the provided data.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to ensure the lowest possible price. It also limits opportunities for other businesses to secure federal contracts.

Public Impact

The Department of State benefits from continuous IT functional and program support, ensuring the smooth operation of its technological infrastructure. Services likely include a range of IT support functions, such as help desk, system maintenance, and potentially program management assistance. The geographic impact is primarily within the Department of State's operational locations, likely concentrated in Washington D.C. and other federal facilities. The contract supports IT professionals and potentially program managers, contributing to the federal IT workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source award limits opportunities for other vendors.
Broad NAICS code makes specific service scope unclear.
Long contract duration without competition raises value concerns.

Positive Signals

Contract provides essential IT support to a critical government agency.
Award to an established vendor like CGI Federal may indicate reliability.
BPA Call award mechanism suggests potential for streamlined ordering if part of a larger, well-managed agreement.

Sector Analysis

The IT services sector is a significant area of federal spending. Contracts for functional and program support services are common across many agencies. The 'Other Computer Related Services' category (NAICS 541519) is broad and can encompass a wide array of IT consulting, integration, and support activities. Federal spending in this area often focuses on maintaining legacy systems, developing new technologies, and providing ongoing operational support. Benchmarking this contract's value would ideally involve comparing its total value and labor rates to similar IT support contracts awarded by the Department of State or other agencies within the same fiscal year.

Small Business Impact

This contract was not awarded to a small business, nor does it indicate any specific small business set-aside provisions. The data does not provide information on subcontracting plans. Therefore, the direct impact on the small business ecosystem appears minimal for this specific award, though the prime contractor may engage small businesses as subcontractors, which is not detailed here.

Oversight & Accountability

Oversight for this contract would fall under the Department of State's contracting and program management offices. As a sole-source award, it may receive heightened scrutiny. Transparency is limited by the lack of competitive bidding information. Inspector General jurisdiction would apply if any issues of fraud, waste, or abuse arise during the contract's performance.

Related Government Programs

IT Professional Services
IT Operations and Support
Program Management Support
Department of State IT Contracts
Sole Source IT Awards

Risk Flags

Sole-source award
Lack of competition
Broad NAICS code
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $16.2 million to CGI FEDERAL INC.. JFMS FUNCTIONAL AND PROGRAM SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is CGI FEDERAL INC..

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $16.2 million.

What is the period of performance?

Start: 2010-03-11. End: 2013-11-11.

What specific IT services were provided under this contract?

The provided data indicates the contract falls under NAICS code 541519, 'Other Computer Related Services.' This is a broad category that can include a wide range of IT support, such as IT management consulting, computer systems design, integration services, and ongoing IT support and maintenance. Without more detailed documentation, the precise scope of 'functional and program support services' remains general. It likely encompasses activities necessary for the day-to-day operation and strategic management of the Department of State's IT infrastructure and related programs.

Why was this contract awarded on a sole-source basis?

The provided data states the contract was 'NOT COMPETED,' indicating a sole-source award. Common justifications for sole-source contracts include situations where only one responsible source can satisfy the agency's needs, such as when a specific technology or expertise is proprietary, or in cases of urgent and compelling need. However, the specific rationale for this sole-source award to CGI Federal Inc. by the Department of State is not detailed in the provided data. Further investigation into the contract file or agency justifications would be required to understand the precise reasons.

How does the $16.2 million value compare to similar IT support contracts?

Directly comparing the $16.2 million value of this contract is difficult without more specific details on the services rendered and the contract duration relative to the scope. However, for a contract spanning over three years (March 2010 to November 2013), $16.2 million represents an average annual value of approximately $5.4 million. This figure needs to be benchmarked against similar IT functional and program support contracts awarded by the Department of State or other federal agencies during the same period, considering factors like the number of personnel, skill levels, and specific services provided. The lack of competition makes a precise value-for-money assessment challenging.

What is CGI Federal Inc.'s track record with the Department of State?

CGI Federal Inc. has a history of contracting with the Department of State, as evidenced by this $16.2 million award. While this specific contract was sole-source, CGI Federal is a large, established IT services provider that frequently secures federal contracts across various agencies. A comprehensive assessment of their track record would involve reviewing other contracts awarded to them by the Department of State, examining past performance evaluations, and looking into any significant issues or successes reported in publicly available contract databases or agency oversight reports.

What are the potential risks associated with a non-competed IT support contract of this magnitude?

The primary risk associated with a non-competed IT support contract of this magnitude is the potential for reduced value for money. Without competition, there is less incentive for the contractor to offer the lowest possible price or the most innovative solutions. This can lead to higher costs for taxpayers and potentially less optimal service delivery. Other risks include a lack of transparency in the procurement process, potential vendor lock-in, and a missed opportunity to foster competition and support a broader range of IT service providers in the federal marketplace.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Parent Company: CGI Inc

Address: 12601 FAIR LAKES CIRCLE, FAIRFAX, VA, 22033

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $16,253,879

Exercised Options: $16,253,879

Current Obligation: $16,243,798

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: SAQMMA10A0058

IDV Type: BPA

Timeline