General Dynamics IT awarded $24.16M for information processing support, raising questions on competition and value

Contract Overview

Contract Amount: $24,159,869 ($24.2M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2006-05-17

End Date: 2010-09-30

Contract Duration: 1,597 days

Daily Burn Rate: $15.1K/day

Competition Type: NON-COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: TOTAL INFORMATION PROCESSING SUPPORT SER

Place of Performance

Location: MC LEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $24.2 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: TOTAL INFORMATION PROCESSING SUPPORT SER Key points: 1. Contract awarded via non-competitive delivery order, limiting price discovery and potentially increasing costs. 2. Cost-plus-fixed-fee structure may incentivize higher spending without strict cost controls. 3. Long contract duration of 1597 days suggests a need for ongoing, critical services. 4. Services provided by a large, established contractor, indicating potential for reliable delivery but also less market pressure. 5. Focus on computer systems design services aligns with core IT infrastructure needs. 6. Awarded to General Dynamics Information Technology, Inc., a significant player in the federal IT landscape.

Value Assessment

Rating: fair

The total award of $24.16 million for computer systems design services appears substantial. Without specific benchmarks for similar 'TOTAL INFORMATION PROCESSING SUPPORT' contracts or detailed cost breakdowns, it is difficult to definitively assess value for money. The cost-plus-fixed-fee (CPFF) contract type, while allowing flexibility, can sometimes lead to higher overall costs compared to fixed-price contracts if not managed rigorously. The lack of competition further complicates a direct value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a non-competitive delivery order. This means that the agency did not solicit bids from multiple offerors. While sole-source awards can be justified under specific circumstances (e.g., urgent need, unique capabilities), they inherently limit competition. The absence of multiple bidders means there was no direct price comparison or negotiation leverage that could have potentially driven down costs for the taxpayer.

Taxpayer Impact: The lack of competition means taxpayers may have paid a premium, as there was no market pressure to ensure the lowest possible price for the services rendered.

Public Impact

Federal employees within the Department of the Treasury, specifically the Internal Revenue Service, are the primary beneficiaries, receiving enhanced information processing capabilities. The contract supports critical IT infrastructure and operational functions essential for tax administration and revenue collection. The geographic impact is primarily within Virginia, where the contractor's operations are based. The contract likely supports a workforce skilled in computer systems design and IT support services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Non-competitive award limits price discovery and potentially inflates costs.
Cost-plus-fixed-fee structure may not incentivize cost efficiency.
Long contract duration could indicate a lack of agile procurement or evolving needs.
Limited transparency due to sole-source nature makes independent value assessment challenging.

Positive Signals

Award to a large, established contractor like General Dynamics suggests a focus on reliability and proven capability.
The contract addresses essential IT support, crucial for agency operations.
The fixed fee component of the CPFF contract provides some level of cost certainty for the contractor's effort.

Sector Analysis

This contract falls within the IT services sector, specifically computer systems design. The federal IT services market is vast, with agencies consistently investing in maintaining and upgrading their technological infrastructure. Comparable spending benchmarks are difficult to establish without more specific service details, but the overall federal IT spending is in the hundreds of billions annually. This contract represents a small fraction of that, but its non-competitive nature warrants scrutiny within the broader context of IT procurement.

Small Business Impact

The contract indicates that small business participation was not a primary consideration, as it was awarded to a large prime contractor and does not appear to have small business set-aside provisions (ss: false, sb: false). There is no information provided on subcontracting plans, so the extent to which small businesses might benefit indirectly through subcontracts is unknown. This award does not appear to actively promote the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Treasury's contracting officers and program managers. The Inspector General for the Treasury could potentially audit or investigate aspects of the contract if concerns regarding waste, fraud, or abuse arise. Transparency is limited due to the non-competitive nature of the award, making public oversight more challenging.

Related Government Programs

IT Services
Computer Systems Design
Department of the Treasury Contracts
Internal Revenue Service IT Support
Cost-Plus-Fixed-Fee Contracts

Risk Flags

Non-competitive award
Cost-plus-fixed-fee contract type
Lack of transparency in pricing
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $24.2 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. TOTAL INFORMATION PROCESSING SUPPORT SER

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 the Treasury (Internal Revenue Service).

What is the total obligated amount?

The obligated amount is $24.2 million.

What is the period of performance?

Start: 2006-05-17. End: 2010-09-30.

What is the track record of General Dynamics Information Technology, Inc. with the federal government, particularly in similar IT support contracts?

General Dynamics Information Technology, Inc. (GDIT) is a major federal contractor with a long history of providing IT services across various government agencies. They have consistently secured large contracts for areas such as cloud computing, cybersecurity, data center operations, and enterprise IT modernization. Their track record includes numerous successful awards and contract vehicles, often competing against other large system integrators. However, like many large contractors, they have also faced scrutiny over contract performance, pricing, and specific project outcomes in the past. For this specific contract, their experience in computer systems design and support is extensive, aligning with the stated service area.

How does the $24.16 million total value compare to similar 'TOTAL INFORMATION PROCESSING SUPPORT' contracts awarded by the IRS or Treasury?

Direct comparison of the $24.16 million award for 'TOTAL INFORMATION PROCESSING SUPPORT' is challenging without more granular data on the specific services rendered and the contract's duration relative to its total value. Federal IT contracts vary widely in scope, complexity, and duration. However, for a non-competitive delivery order spanning approximately 1597 days (over 4 years), this amount suggests a significant, ongoing need for IT support. Larger, competitively bid contracts for enterprise-wide IT modernization or comprehensive managed services can reach hundreds of millions or even billions. This specific award appears to be for a focused set of support services rather than a broad overhaul.

What are the primary risks associated with a non-competitive, cost-plus-fixed-fee contract for IT services?

The primary risks associated with a non-competitive, cost-plus-fixed-fee (CPFF) contract are twofold. Firstly, the non-competitive nature means the government did not leverage market forces to achieve the best possible price, potentially leading to higher costs than if multiple bids were solicited. Secondly, the CPFF structure, while providing flexibility, shifts some of the financial risk to the government. The contractor is reimbursed for allowable costs plus a fixed fee representing profit. This can reduce the contractor's incentive to control costs rigorously, as their profit margin is fixed regardless of the final cost incurred, unless specific cost-saving clauses are included. This necessitates strong government oversight to manage costs effectively.

How effective are Inspector General offices in overseeing non-competitive IT contracts like this one?

Inspector General (IG) offices play a crucial role in overseeing federal contracts, including non-competitive ones. They conduct audits, investigations, and reviews to identify potential waste, fraud, abuse, and mismanagement. For non-competitive contracts, IGs may focus on ensuring the justification for the sole-source award was valid, assessing whether the pricing is reasonable, and evaluating the contractor's performance and cost controls. While IGs provide an essential layer of accountability, their effectiveness depends on resources, access to information, and the specific mandate given for a particular review. Their oversight acts as a deterrent and a mechanism for identifying issues that might be missed by day-to-day contracting officers.

What are the historical spending patterns for 'Computer Systems Design Services' (NAICS 541512) at the IRS and Treasury?

Historical spending patterns for NAICS 541512 ('Computer Systems Design Services') at the IRS and Treasury are substantial, reflecting the critical role of IT in tax administration. Both agencies consistently award significant sums for these services annually, often through a mix of competitive and non-competitive vehicles. The IRS, in particular, requires extensive IT support for managing taxpayer data, processing returns, and maintaining legacy systems while modernizing. Spending can fluctuate based on specific modernization initiatives, cybersecurity needs, and system upgrades. Analyzing past awards within this category would reveal trends in contract types, average award values, and key contractors utilized by these agencies.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NON-COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Computer Sciences Corporation (UEI: 009581091)

Address: 15000 CONFERENCE CENTER DRIVE, CHANTILLY, VA, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $29,567,435

Exercised Options: $24,545,291

Current Obligation: $24,159,869

Parent Contract

Parent Award PIID: TIRNO06D00025

IDV Type: IDC

Timeline