Treasury's IRS Spends $16.17M on Systems Integration, Awarded to General Dynamics IT
Contract Overview
Contract Amount: $16,171,460 ($16.2M)
Contractor: General Dynamics Information Technology, Inc.
Awarding Agency: Department of the Treasury
Start Date: 2004-03-01
End Date: 2009-08-19
Contract Duration: 1,997 days
Daily Burn Rate: $8.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: FY04/05 SYSTEMS INTEGRATION SERVICES
Place of Performance
Location: LANHAM, PRINCE GEORGE'S County, MARYLAND, 20706
State: Maryland Government Spending
Plain-Language Summary
Department of the Treasury obligated $16.2 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: FY04/05 SYSTEMS INTEGRATION SERVICES Key points: 1. Significant contract value of over $16 million for systems integration. 2. Sole-source award to General Dynamics Information Technology raises competition concerns. 3. Contract duration spans over five years, indicating long-term reliance. 4. The 'Computer Systems Design Services' NAICS code suggests a focus on IT infrastructure and support.
Value Assessment
Rating: questionable
The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed tightly. Without competitive bidding, it's difficult to assess if the $16.17 million price represents fair market value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded sole-source, meaning there was no competition. This limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The lack of competition for a contract of this size means taxpayers may not have received the best possible price for these services.
Public Impact
Taxpayers may be paying more than necessary due to the sole-source award. The IRS's reliance on a single vendor for critical systems integration could pose a risk if the vendor fails to perform. Long-term contracts without competition can stifle innovation and prevent the government from accessing potentially better solutions from other companies.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Long contract duration without competition
Positive Signals
- Awarded to a known entity (General Dynamics IT)
- Specific NAICS code indicates relevant service area
Sector Analysis
The IT services sector is highly competitive, making a sole-source award for systems integration services notable. Benchmarks for similar contracts would typically involve competitive bidding to ensure optimal pricing.
Small Business Impact
The data indicates this contract was not set aside for small businesses and was awarded to a large corporation, General Dynamics Information Technology, Inc. There is no indication of small business participation in this specific award.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny. Oversight should focus on ensuring the fixed fee is justified and that performance metrics are rigorously monitored to protect taxpayer interests.
Related Government Programs
- Computer Systems Design Services
- Department of the Treasury Contracting
- Internal Revenue Service Programs
Risk Flags
- Sole-source award bypasses competition.
- Cost-plus contract type carries inherent cost risk for the government.
- Long contract duration without competition may limit future flexibility.
- Lack of small business participation noted.
Tags
computer-systems-design-services, department-of-the-treasury, md, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $16.2 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. FY04/05 SYSTEMS INTEGRATION SERVICES
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 $16.2 million.
What is the period of performance?
Start: 2004-03-01. End: 2009-08-19.
What was the justification for awarding this significant systems integration contract sole-source to General Dynamics IT?
The justification for a sole-source award typically involves a determination that only one responsible source can provide the required services. This could be due to unique capabilities, urgent needs, or specific compatibility requirements. Without further documentation, it's difficult to ascertain the precise rationale, but it bypasses the standard competitive process, potentially impacting cost-effectiveness.
How does the Cost Plus Fixed Fee structure impact the risk and value for the IRS in this contract?
A Cost Plus Fixed Fee (CPFF) contract allows the contractor to recover all allowable costs plus a predetermined fixed fee. While it provides the contractor with a guaranteed profit, it shifts much of the cost risk to the government. For the IRS, this means they bear the risk of cost overruns, making effective oversight crucial to ensure the fixed fee remains reasonable and the overall value is achieved.
What is the potential long-term impact of this sole-source, multi-year contract on the IRS's IT capabilities and vendor landscape?
A long-term sole-source contract can lead to vendor lock-in, potentially hindering the IRS's ability to adopt newer technologies or benefit from competitive pricing in the future. It may also reduce opportunities for other vendors, including small businesses, to demonstrate their capabilities and compete for critical IT services, potentially impacting overall IT modernization and cost efficiency.
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: NOT COMPETED
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Contractor Details
Parent Company: Computer Sciences Corporation (UEI: 009581091)
Address: MARYLAND TECHNOLOGY CENTER, LANHAM, MD, 04
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $16,342,345
Exercised Options: $16,342,345
Current Obligation: $16,171,460
Parent Contract
Parent Award PIID: TIRNO99D00001
IDV Type: IDC
Timeline
Start Date: 2004-03-01
Current End Date: 2009-08-19
Potential End Date: 2009-08-19 00:00:00
Last Modified: 2015-02-16
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