State Department's $189M IT support contract awarded to CGI Federal raises questions on competition and value

Contract Overview

Contract Amount: $188,942,386 ($188.9M)

Contractor: CGI Federal Inc.

Awarding Agency: Department of State

Start Date: 2013-09-30

End Date: 2018-12-29

Contract Duration: 1,916 days

Daily Burn Rate: $98.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: INCREMENTAL FUNDING - PPT SUPPORT SERVICES - TASK 3, IGF::OT::IGF

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20520

State: District of Columbia Government Spending

Plain-Language Summary

Department of State obligated $188.9 million to CGI FEDERAL INC. for work described as: INCREMENTAL FUNDING - PPT SUPPORT SERVICES - TASK 3, IGF::OT::IGF Key points: 1. Contract awarded on a sole-source basis, limiting potential cost savings from competition. 2. Long contract duration (over 5 years) may not reflect current market needs or pricing. 3. High total value suggests significant reliance on contractor for critical IT functions. 4. Lack of competition could lead to inflated pricing and reduced service innovation. 5. Performance context is limited due to sole-source award, making value assessment challenging. 6. Sector positioning is within IT services, a critical area for government operations.

Value Assessment

Rating: questionable

The total award of $188.9 million over nearly five years for IT support services presents a significant investment. Benchmarking this contract's value is difficult without competitive data. However, the absence of a competitive bidding process for such a substantial contract raises concerns about whether the government secured the best possible pricing and value. The firm-fixed-price structure provides some cost certainty, but the lack of market comparison makes a definitive value-for-money assessment challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning CGI Federal was the only bidder considered. This approach bypasses the standard competitive procurement process, which typically involves soliciting bids from multiple vendors. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities or urgent needs), they inherently limit price discovery and can reduce the incentive for contractors to offer their most competitive pricing.

Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competitive pressure to drive down costs. Without competing offers, it's harder to ensure that taxpayer funds are being used most efficiently.

Public Impact

The Department of State benefits from continuous IT support services, crucial for its global operations. Employees within the Department of State are the primary users of these IT services. The contract's impact is primarily concentrated in Washington D.C., the location of the agency's headquarters. The IT services provided likely support a wide range of government functions, from communication to data management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially increasing costs for taxpayers.
Long contract duration may not align with evolving technology and market prices.
Lack of transparency in the sole-source justification makes value assessment difficult.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
CGI Federal is an established contractor, suggesting potential for reliable service delivery.

Sector Analysis

This contract falls within the IT services sector, specifically Computer Facilities Management Services. The federal IT services market is vast and highly competitive, with numerous large and small businesses vying for government contracts. However, sole-source awards like this one represent a deviation from typical market dynamics. Comparable spending benchmarks for IT support services vary widely based on scope and duration, but a nearly $190 million award over five years indicates a significant, long-term engagement.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have significant subcontracting requirements for small businesses based on the provided data. The sole-source nature of the award further limits opportunities for small businesses to participate. This approach does not contribute to the government's small business contracting goals and may bypass potential innovation and cost efficiencies that small businesses could offer.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of State's contracting officers and program managers. Transparency is limited due to the sole-source nature of the award, making public scrutiny of the procurement process and pricing more challenging. Inspector General reviews could occur if performance issues or allegations of impropriety arise, but proactive oversight is constrained by the procurement method.

Related Government Programs

IT Professional Services
IT Management Services
Computer Systems Design Services
Cloud Computing Services
Cybersecurity Services

Risk Flags

Sole-source award raises concerns about competition and potential overpricing.
Lack of competitive bidding limits transparency and value assessment.
Long contract duration may not be optimal for rapidly evolving IT needs.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $188.9 million to CGI FEDERAL INC.. INCREMENTAL FUNDING - PPT SUPPORT SERVICES - TASK 3, IGF::OT::IGF

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 $188.9 million.

What is the period of performance?

Start: 2013-09-30. End: 2018-12-29.

What is CGI Federal's track record with the Department of State and other federal agencies?

CGI Federal has a substantial history of contracting with the U.S. government, including the Department of State. They are a large, established IT services provider. Their past performance with the State Department would be documented in internal agency performance evaluations. While specific details are often proprietary, their continued awards suggest a generally satisfactory performance history. However, a sole-source award, especially for a large sum, warrants scrutiny beyond just past performance, focusing on the justification for not seeking competitive bids and ensuring fair pricing.

How does the pricing of this contract compare to similar IT support services contracts awarded competitively?

Direct comparison of pricing is challenging for this sole-source contract. Competitive contracts allow for direct benchmarking against other bids and market rates. Without competitive bids, it's difficult to ascertain if CGI Federal's pricing is optimal. The firm-fixed-price structure offers predictability, but the absence of competition means the government cannot leverage market forces to potentially secure lower rates. A thorough review would require access to internal cost analyses or comparisons with similar sole-source awards, which are often not publicly available.

What are the key risks associated with a sole-source IT support contract of this magnitude?

The primary risks associated with a sole-source IT support contract of this magnitude include potential overpayment due to lack of competition, reduced incentive for the contractor to innovate or improve service quality, and vendor lock-in. If CGI Federal's services become deeply integrated into the State Department's infrastructure, switching providers in the future could be costly and disruptive. Furthermore, the justification for the sole-source award itself needs to be robust to ensure it was truly necessary and not a result of poor planning or relationship management.

How effective has CGI Federal been in delivering Computer Facilities Management Services to the government?

Assessing the effectiveness of CGI Federal's delivery requires examining performance metrics and user feedback specific to this contract, which are not fully detailed in the provided data. Generally, large IT service providers like CGI Federal have established processes for service delivery. However, the effectiveness is best measured against clearly defined Service Level Agreements (SLAs) and Key Performance Indicators (KPIs). The sole-source nature means the government relies heavily on its internal oversight to ensure these metrics are met and that the services provided are truly effective for the State Department's mission.

What has been the historical spending trend for IT support services at the Department of State?

Historical spending on IT support services at the Department of State has likely been substantial and potentially increasing, reflecting the growing reliance on technology for diplomatic and operational functions. This $189 million contract represents a significant portion of that spending over its duration. Analyzing prior contracts, including their award types (competitive vs. sole-source) and total values, would provide context on whether this award is an anomaly or part of a broader trend in how the department procures IT support. Understanding these trends is crucial for budget planning and identifying potential efficiencies.

What specific IT facilities management services are included under this contract?

The contract, identified under NAICS code 541513 (Computer Facilities Management Services), likely encompasses a broad range of services. These typically include the operation, maintenance, and management of computer systems and related facilities. This could involve server management, network infrastructure support, data center operations, help desk services, system administration, and potentially IT security operations. The specific deliverables would be detailed in the contract's Statement of Work (SOW), outlining the exact scope and responsibilities of CGI Federal.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Facilities Management Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: CGI Inc (UEI: 248513116)

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

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $188,942,386

Exercised Options: $188,942,386

Current Obligation: $188,942,386

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SAQMMA13D0174

IDV Type: IDC

Timeline