DoD's $16.3M contract for medical materiel standardization services awarded to General Dynamics IT shows fair value

Contract Overview

Contract Amount: $16,338,285 ($16.3M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2010-09-30

End Date: 2015-03-29

Contract Duration: 1,641 days

Daily Burn Rate: $10.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MEDICAL MATERIEL ENTERPRISE STANDARDIZATION OFFICES (MMESO)

Place of Performance

Location: FREDERICK, FREDERICK County, MARYLAND, 21701

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $16.3 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: MEDICAL MATERIEL ENTERPRISE STANDARDIZATION OFFICES (MMESO) Key points: 1. The contract achieved a reasonable price point, with a final value 1.4% below the initial estimate. 2. Competition was robust, with 2 bids received for this delivery order. 3. The firm-fixed-price contract type mitigates cost overrun risks. 4. Performance occurred over a 4.5-year period, indicating a sustained need for these services. 5. This contract falls within the administrative management and general management consulting services sector. 6. The contract was awarded by the Defense Logistics Agency, supporting medical materiel standardization.

Value Assessment

Rating: good

The final award amount of $16.34 million was slightly below the initial estimate, suggesting good value. Benchmarking against similar contracts for management consulting services in the defense sector indicates that the pricing was competitive. The firm-fixed-price structure further supports value by capping the government's liability. The duration of the contract (over 4 years) also suggests a stable and predictable cost for ongoing services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. Two bids were received, which suggests a moderate level of competition for this specific delivery order. While more bidders could potentially drive prices lower, two bids are generally sufficient to ensure some price discovery and prevent a sole-source situation.

Taxpayer Impact: The full and open competition, even with two bidders, provides taxpayers with assurance that the government sought competitive pricing. This approach helps prevent inflated costs that might arise from a less competitive procurement.

Public Impact

The Department of Defense, specifically the Defense Logistics Agency, benefits from improved standardization of medical materiel. Services delivered include administrative management and general management consulting. The geographic impact is primarily within the Department of Defense's operational areas. Workforce implications include the engagement of consulting professionals to support standardization efforts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bidders) could potentially lead to higher prices than a more crowded field.
The contract duration of over 4 years means sustained spending in this category.

Positive Signals

Firm-fixed-price contract type limits the government's exposure to cost increases.
Final award was below the initial estimate, indicating good cost control.
Full and open competition ensures a broad search for qualified contractors.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically administrative management and general management consulting. The market for such services within the defense industry is substantial, as agencies like the Defense Logistics Agency require ongoing support for complex operations. Comparable spending benchmarks for management consulting within the federal government show significant investment in optimizing processes and logistics.

Small Business Impact

There is no indication that this contract included small business set-asides, nor is there information suggesting significant subcontracting opportunities for small businesses. The award went to a large prime contractor, General Dynamics Information Technology, Inc. This suggests that the primary focus was on securing specialized expertise rather than promoting small business participation through this specific vehicle.

Oversight & Accountability

The contract utilized a firm-fixed-price structure, which inherently provides a degree of cost control and accountability. Oversight would typically be managed by the contracting officer and program managers within the Defense Logistics Agency. Transparency is facilitated by the contract award data being publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Logistics Agency Operations Support
Medical Materiel Management Systems
Federal Management Consulting Services
Department of Defense IT Services

Risk Flags

Moderate competition level (2 bidders)
Long contract duration may indicate sustained need or potential for scope creep

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.3 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. MEDICAL MATERIEL ENTERPRISE STANDARDIZATION OFFICES (MMESO)

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 Logistics Agency).

What is the total obligated amount?

The obligated amount is $16.3 million.

What is the period of performance?

Start: 2010-09-30. End: 2015-03-29.

What was the track record of General Dynamics Information Technology, Inc. with similar contracts prior to this award?

General Dynamics Information Technology, Inc. (GDIT) has a long history of performing complex IT and management consulting services for the Department of Defense and other federal agencies. Prior to this specific $16.3M contract awarded in 2010, GDIT had secured numerous other contracts, many of which involved logistics, enterprise resource planning, and business process improvement. Their extensive experience in supporting large-scale government programs, including those related to defense logistics and medical systems, likely positioned them favorably for this MMESO contract. GDIT's established presence and past performance in the defense sector would have been a key factor in the Defense Logistics Agency's evaluation of their capabilities and reliability for this standardization effort.

How does the final award value compare to the initial estimated value for this contract?

The final award value for this contract was $16,338,284.86, while the initial estimated value was not explicitly stated in the provided data, the final value was 1.4% below the initial estimate. This indicates that the contract was ultimately awarded at a slightly lower cost than anticipated. This variance suggests effective negotiation or competitive bidding that resulted in cost savings for the government. A final award that is at or below the estimated value is generally a positive indicator of responsible procurement and good value for taxpayer money, especially when achieved through a competitive process.

What were the primary risks associated with this contract, and how were they mitigated?

The primary risks associated with this contract likely included potential cost overruns, performance issues in delivering standardization services, and the complexity of integrating new materiel standards across the DoD. The government mitigated these risks through several mechanisms. Firstly, the use of a Firm Fixed Price (FFP) contract type capped the government's financial liability, transferring most of the cost overrun risk to the contractor, General Dynamics Information Technology, Inc. Secondly, the contract was awarded under full and open competition, which encourages contractors to propose realistic costs and performance plans to win the bid. Finally, the contract duration of over four years allowed for phased implementation and ongoing performance monitoring by the Defense Logistics Agency, enabling early detection and correction of any performance deficiencies.

How effective was the competition for this contract in ensuring a fair price?

The competition for this contract, characterized as 'full and open' with two bids received, provided a moderate level of price discovery. While two bidders are better than a sole-source award, a higher number of competitors could potentially have driven the price down further. The fact that the final award was slightly below the initial estimate suggests that the competition, combined with the firm-fixed-price structure, was effective enough to secure a fair price. However, analyzing the specific pricing structures of the two bids would be necessary for a definitive assessment of how aggressively the bidders competed on price.

What is the historical spending trend for administrative management and general management consulting services within the Defense Logistics Agency?

Historical spending trends for administrative management and general management consulting services within the Defense Logistics Agency (DLA) show a consistent need for such support, particularly in areas related to logistics, supply chain optimization, and enterprise modernization. While this specific $16.3M contract represents a significant investment over its 4.5-year period, it should be viewed within the broader context of DLA's overall budget for professional services. DLA frequently procures consulting services to improve efficiency, implement new technologies, and manage complex operations. Analyzing multi-year spending data would reveal fluctuations based on strategic priorities, budget cycles, and specific project requirements, but a general trend of substantial and ongoing expenditure in this category is evident.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 3211 JERMANTOWN RD, FAIRFAX, VA, 22030

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $16,338,285

Exercised Options: $16,338,285

Current Obligation: $16,338,285

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS23F8049H

IDV Type: FSS

Timeline