CACI awarded $32.9M for Defense Logistics Agency IT support, raising value-for-money questions

Contract Overview

Contract Amount: $32,913,406 ($32.9M)

Contractor: CACI, Inc. - Federal

Awarding Agency: Department of Defense

Start Date: 2019-06-04

End Date: 2022-06-03

Contract Duration: 1,095 days

Daily Burn Rate: $30.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS INCENTIVE FEE

Sector: IT

Official Description: IGF::OT::IGF DAI COMPLIANCE SUPPORT SERVICES - CONTRACT AWARD

Place of Performance

Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22041

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $32.9 million to CACI, INC. - FEDERAL for work described as: IGF::OT::IGF DAI COMPLIANCE SUPPORT SERVICES - CONTRACT AWARD Key points: 1. Contract value appears high relative to duration, suggesting potential for cost overruns. 2. Limited competition data available, making it difficult to assess true market value. 3. Performance risk is moderate given the IT support nature and contract type. 4. This contract supports critical logistics functions within the Department of Defense. 5. The IT services sector is highly competitive, but this award's specifics are unclear. 6. Cost-plus contracts can incentivize spending, requiring close oversight.

Value Assessment

Rating: fair

The contract's total value of $32.9 million over three years averages to approximately $10.97 million annually. While specific service details are limited, this annual spend for IT compliance support services seems substantial. Benchmarking against similar contracts for custom computer programming services (NAICS 541511) would be necessary to determine if this represents a fair market price. The cost-plus incentive fee structure also introduces potential for costs to exceed initial estimates, warranting careful monitoring.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. However, the data provided only specifies two bidders, which is a relatively low number for a full and open competition of this value. This limited number of bidders could suggest that the market for these specific compliance support services is concentrated, or that the solicitation requirements were highly specialized. Further analysis of the bidding process would be needed to understand the extent of competition.

Taxpayer Impact: A full and open competition is generally favorable for taxpayers as it aims to secure the best value through market forces. However, with only two bidders, the potential for robust price discovery might be limited, potentially leading to a higher-than-optimal price for the government.

Public Impact

The primary beneficiaries are the Department of Defense and the Defense Logistics Agency, receiving essential IT compliance support. Services delivered include custom computer programming and compliance support, crucial for maintaining operational readiness. The geographic impact is primarily within the United States, supporting federal IT infrastructure. Workforce implications include employment for IT professionals and compliance specialists within CACI, Inc. - Federal.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus contracts can lead to increased costs if not managed tightly.
Limited number of bidders in a 'full and open' competition raises concerns about true market competitiveness.
The specific nature of 'DAI Compliance Support Services' is not detailed, making it hard to assess performance metrics.
Contract duration of three years without clear performance milestones could reduce contractor incentive for efficiency.

Positive Signals

Awarded through full and open competition, suggesting an attempt to leverage market forces.
CACI, Inc. - Federal is an established government contractor with a significant presence.
The contract supports critical defense logistics functions, indicating strategic importance.
The cost-plus incentive fee structure, if managed well, can align contractor and government interests towards specific goals.

Sector Analysis

This contract falls within the Information Technology (IT) services sector, specifically custom computer programming and compliance support. The IT services market is vast and highly competitive, with numerous companies offering a wide range of solutions. Federal spending in this area is substantial, driven by the need for modernizing systems, cybersecurity, and ensuring regulatory compliance. Comparable spending benchmarks would typically look at the average cost of similar IT support contracts awarded by agencies like the DLA or other DoD components, considering factors like contract type, duration, and service complexity.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large contract awarded to a major federal contractor, CACI, Inc. - Federal, the primary impact on small businesses would be through potential subcontracting opportunities. However, without specific subcontracting plans detailed in the award, it's difficult to assess the extent to which small businesses will benefit from this particular contract. Large prime contractors often utilize small businesses for specialized services, but this is not guaranteed.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Logistics Agency (DLA) and potentially the Department of Defense's Inspector General. As a cost-plus incentive fee contract, rigorous financial oversight and performance monitoring are crucial to ensure that costs are reasonable and that performance objectives are met. Transparency would be enhanced through regular reporting requirements from the contractor and audits by the DLA. The effectiveness of oversight depends on the resources allocated and the diligence of the contracting officer and their team.

Related Government Programs

Defense Logistics Agency IT Modernization Programs
Department of Defense Compliance and Audit Support
Custom Computer Programming Services Contracts
Federal IT Support Services
Cost-Plus Incentive Fee Contracts

Risk Flags

Potential for cost overruns due to CPIF contract type.
Limited number of bidders in a full and open competition.
Lack of detailed performance metrics in award data.
Contract duration without clear break clauses or performance reviews.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.9 million to CACI, INC. - FEDERAL. IGF::OT::IGF DAI COMPLIANCE SUPPORT SERVICES - CONTRACT AWARD

Who is the contractor on this award?

The obligated recipient is CACI, INC. - FEDERAL.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $32.9 million.

What is the period of performance?

Start: 2019-06-04. End: 2022-06-03.

What is CACI, Inc. - Federal's track record with similar IT compliance support contracts for the Department of Defense?

CACI, Inc. - Federal has a substantial history of performing IT and professional services for the Department of Defense and other federal agencies. They are a large, established contractor with numerous awards across various IT domains, including software development, systems integration, and cybersecurity. Their track record with compliance support services specifically would need to be examined by reviewing past performance evaluations and contract histories. While generally considered a capable contractor, the success of any specific contract depends on the project's scope, management, and the specific team assigned. A deeper dive into their performance on prior DLA or similar DoD contracts would provide more granular insights into their reliability for this type of work.

How does the average annual cost of this contract compare to similar IT compliance support contracts awarded by the DLA or other DoD agencies?

The average annual cost of this contract is approximately $10.97 million ($32.9M / 3 years). To benchmark this effectively, one would need to compare it against contracts for similar services (e.g., custom computer programming, IT support, compliance services) awarded by the DLA or other DoD entities over the past 3-5 years. Key comparison factors include the contract type (Cost Plus Incentive Fee vs. Fixed Price), the duration, the specific services rendered, and the complexity of the requirements. Without access to a comprehensive database of comparable contract awards and their specific details, it is difficult to definitively state whether $10.97 million annually is high, low, or fair. However, for specialized IT compliance support, this figure is within a plausible range for a large agency like the DLA.

What are the primary performance risks associated with this Cost Plus Incentive Fee (CPIF) contract for IT compliance support?

The primary performance risks with a CPIF contract for IT compliance support revolve around cost control and scope definition. CPIF contracts incentivize the contractor to control costs by sharing in any savings below a target cost, but they also share in any cost overruns above a ceiling. This structure can sometimes lead to less aggressive cost management than a fixed-price contract if the incentive structure is not perfectly aligned or if the target cost is set too high. For IT compliance support, risks include the evolving nature of compliance requirements, potential for scope creep if requirements are not clearly defined, and the technical challenges in implementing or maintaining compliant systems. Ensuring clear performance metrics and robust oversight are critical to mitigating these risks.

What is the historical spending trend for IT compliance support services by the Defense Logistics Agency?

Analyzing the historical spending trend for IT compliance support services by the Defense Logistics Agency (DLA) would require accessing DLA's procurement data over several fiscal years. Generally, federal agencies, especially within the Department of Defense, have seen a consistent and often increasing trend in spending on IT services, including compliance, cybersecurity, and system modernization. This is driven by the need to maintain aging infrastructure, adopt new technologies, and meet increasingly stringent regulatory and security mandates. A detailed analysis would involve identifying specific NAICS codes related to IT compliance and tracking the total obligated amounts awarded by the DLA year over year. This contract represents a portion of that broader trend.

How does the 'Custom Computer Programming Services' (NAICS 541511) market typically perform under full and open competition with a limited number of bidders?

The market for 'Custom Computer Programming Services' (NAICS 541511) is generally robust and competitive. When a 'full and open' competition results in only two bidders for a contract of this size and scope, it can indicate several possibilities. It might suggest a highly specialized niche where only a few firms possess the required expertise or security clearances. Alternatively, it could imply that the solicitation process or requirements were structured in a way that deterred broader participation, or that the market has consolidated. In such scenarios, price discovery might be less effective than with a larger pool of bidders, potentially leading to higher prices for the government. It also increases the risk associated with contractor performance, as there are fewer alternatives if the selected contractor underperforms.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: SP470119R0003

Offers Received: 2

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: CACI International Inc

Address: 14370 NEWBROOK DRIVE, CHANTILLY, VA, 20151

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

Financial Breakdown

Contract Ceiling: $54,757,899

Exercised Options: $54,757,899

Current Obligation: $32,913,406

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $2,291,503

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline