Treasury's $16.6M IT contract awarded to General Dynamics for systems integration services

Contract Overview

Contract Amount: $16,607,091 ($16.6M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2004-05-21

End Date: 2004-12-23

Contract Duration: 216 days

Daily Burn Rate: $76.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

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 $16.6 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: FY04/05 SYSTEMS INTEGRATION SERVICES Key points: 1. Contract awarded under full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 3. The duration of the contract is relatively short (216 days), indicating a focused project scope. 4. The award was made under the "Other" category for contract actions, which may warrant further investigation into its classification. 5. The North American Industry Classification System (NAICS) code 541512 points to computer systems design services. 6. The contract was awarded to a single vendor, General Dynamics Information Technology, Inc.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more detailed cost breakdowns or comparable contract data. The Cost Plus Fixed Fee structure introduces inherent risk in cost control. However, the fixed fee component provides some predictability. The award amount of $16.6 million for systems integration services over approximately seven months appears within a reasonable range for large-scale IT projects of that era, but a detailed cost-per-unit analysis is not feasible with the provided data.

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 a bid. The presence of two bids suggests a moderate level of competition for this specific requirement. While two bidders is better than a sole source, a higher number of bidders typically leads to more robust price discovery and potentially lower prices for the government.

Taxpayer Impact: The full and open competition, despite only two bidders, likely provided the government with at least some leverage to negotiate a fair price, benefiting taxpayers by avoiding a sole-source situation.

Public Impact

Federal employees within the Department of the Treasury are likely the primary beneficiaries, utilizing the integrated systems for their daily operations. The services delivered are focused on computer systems design and integration, aiming to improve the efficiency and functionality of Treasury's IT infrastructure. The geographic impact is primarily within the District of Columbia, where the Treasury Department is headquartered. The contract supports the IT workforce within General Dynamics Information Technology, Inc., and potentially subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize contractors to incur costs, as a portion of their profit is tied to the total cost.
Limited competition (two bidders) may have reduced the government's negotiating power compared to a scenario with more offers.
The contract's short duration might indicate a project with a narrowly defined scope, potentially leading to follow-on contracts or a need for ongoing support not covered here.

Positive Signals

Awarded under full and open competition, ensuring a fair process for potential bidders.
The contractor, General Dynamics Information Technology, Inc., is a large and established entity with significant experience in government IT services.
The contract has a defined end date, providing a clear timeline for service delivery and project completion.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on computer systems design and integration services. The market for such services is highly competitive, with numerous large and small businesses vying for government contracts. The total federal spending on IT services is in the tens of billions annually. This $16.6 million contract represents a small fraction of that overall spending but is significant for the specific systems integration needs of the IRS.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside requirement. Large prime contractors like General Dynamics are often encouraged or required to have small business subcontracting plans for larger contracts, but this specific contract's details do not provide information on such plans.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the IRS. The 'Award By' code 'DO' suggests it was awarded by a Departmental Office, implying a level of centralized oversight. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's performance or closeout.

Related Government Programs

IRS IT Modernization Programs
Federal Civilian IT Services
Department of the Treasury IT Contracts
Systems Integration Services

Risk Flags

Cost Plus Fixed Fee contract type carries inherent cost risk.
Limited competition (two bidders) may impact price negotiation.
Short contract duration might indicate a need for follow-on work or potential gaps in long-term support.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $16.6 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 $16.6 million.

What is the period of performance?

Start: 2004-05-21. End: 2004-12-23.

What was the specific nature of the systems integration services provided under this contract?

The contract's NAICS code (541512) indicates 'Computer Systems Design Services.' This generally encompasses designing and integrating computer hardware and software systems. For the IRS, this could have involved integrating new software with existing legacy systems, upgrading network infrastructure, or developing custom solutions to improve tax processing, data management, or internal operational efficiency. Without more specific documentation, the exact scope remains general, but it was clearly aimed at enhancing the IRS's technological capabilities.

How does the Cost Plus Fixed Fee (CPFF) contract type typically perform in terms of cost control compared to other contract types?

Cost Plus Fixed Fee contracts are often used when the scope of work is not precisely defined or when there is uncertainty about the costs involved. The contractor is reimbursed for allowable costs and receives a predetermined fixed fee, which represents profit. While the fixed fee provides some incentive for the contractor to control costs (as their profit is not directly tied to the total cost), it can also lead to cost overruns if the initial cost estimates are inaccurate or if the scope expands. Compared to Firm-Fixed-Price contracts, CPFF generally offers less cost certainty for the government. However, it provides more flexibility than FFP when requirements are evolving.

What is the track record of General Dynamics Information Technology, Inc. in performing similar federal IT contracts?

General Dynamics Information Technology, Inc. (GDIT) has a long and extensive history of performing large-scale IT services contracts for various U.S. federal agencies, including the Department of the Treasury and the IRS. They are a major federal IT contractor known for handling complex systems integration, cybersecurity, cloud migration, and IT modernization projects. Their track record generally includes successful delivery on numerous high-value contracts, though like any large contractor, they may have also faced challenges or scrutiny on specific projects. Their established presence suggests a capacity to manage contracts of this nature.

Were there any performance issues or disputes reported during the execution of this contract?

Based on the provided data, there is no direct information indicating performance issues or disputes during the execution of this specific contract. Contract award databases typically capture basic award details, not the day-to-day performance metrics or any formal disputes that may have arisen. Resolution of performance issues or disputes would usually be handled through contract administration channels and might be documented in internal agency records or through formal legal proceedings if unresolved.

How does the $16.6 million award compare to other IT systems integration contracts awarded by the Treasury or IRS around FY04/05?

In Fiscal Year 2004/2005, $16.6 million was a substantial, but not exceptionally large, award for a systems integration contract within the federal government, particularly for an agency like the IRS. Major IT modernization efforts often involved contracts ranging from tens to hundreds of millions of dollars. This award suggests a significant project but likely not a complete overhaul of the IRS's entire IT infrastructure. Comparable contracts for similar services during that period could vary widely based on scope, duration, and complexity, but this figure falls within the mid-to-upper range for specific, focused integration projects.

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: FULL AND OPEN COMPETITION

Offers Received: 2

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: $16,607,091

Exercised Options: $16,607,091

Current Obligation: $16,607,091

Parent Contract

Parent Award PIID: TIRNO99D00001

IDV Type: IDC

Timeline