Treasury's $21M IT contract for system integration services awarded to General Dynamics Information Technology

Contract Overview

Contract Amount: $21,023,338 ($21.0M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2005-08-01

End Date: 2007-05-31

Contract Duration: 668 days

Daily Burn Rate: $31.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: PRIME SYSTEMS INTEGRATION SERVIES

Place of Performance

Location: LANHAM, PRINCE GEORGE'S County, MARYLAND, 20706

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $21.0 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: PRIME SYSTEMS INTEGRATION SERVIES Key points: 1. Contract awarded through 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 668 days indicates a significant, long-term project. 4. The award was made to a single contractor, General Dynamics Information Technology, Inc. 5. The contract falls under the Computer Systems Design Services NAICS code. 6. The contract was awarded under the "Other" contract type, which may require further clarification.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the services rendered and comparable market rates. The Cost Plus Fixed Fee (CPFF) contract type introduces inherent risk for cost control. While the total award amount is $21 million, the actual final cost could vary based on incurred expenses. Without data on the contractor's performance on similar contracts or detailed cost breakdowns, a definitive value assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through 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 IT services contract. While competition is generally positive for price discovery, the specific number of bidders (two) might not represent the full market potential.

Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging competitive pricing and potentially leading to better value for money. However, with only two bidders, the potential for significant cost savings might be limited compared to a scenario with a larger number of competitive offers.

Public Impact

The primary beneficiary of this contract is the Department of the Treasury, specifically the Internal Revenue Service (IRS). The contract delivers computer systems design and integration services, crucial for the IRS's operational efficiency. The geographic impact is primarily within Maryland, where the contractor is located. The contract supports IT professionals and potentially other roles within General Dynamics Information Technology, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize contractors to increase costs to maximize profit, requiring robust oversight.
Limited competition (two bidders) may have reduced the pressure on the contractor to offer the lowest possible price.
The specific nature of 'system integration services' can be broad, potentially leading to scope creep if not clearly defined.

Positive Signals

Awarded through full and open competition, which is a positive indicator of a fair process.
The contractor, General Dynamics Information Technology, Inc., is a large and established entity in the IT services sector.
The contract duration suggests a commitment to a specific IT modernization or integration effort.

Sector Analysis

This contract falls within the IT services sector, specifically Computer Systems Design Services. The market for these services is substantial, driven by government and commercial entities seeking to modernize their IT infrastructure, integrate disparate systems, and enhance cybersecurity. Comparable spending benchmarks would typically involve analyzing other large-scale IT system integration contracts awarded by federal agencies for similar scope and complexity.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the prime contractor is a large business. There is no explicit information provided regarding subcontracting plans for small businesses. This suggests that the primary focus of this award was not on engaging the small business ecosystem directly through set-asides.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the IRS. Accountability measures would be tied to the performance metrics and deliverables outlined in the Cost Plus Fixed Fee contract. Transparency is generally facilitated through contract award databases, but detailed performance and cost reporting may be less publicly accessible. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IT System Modernization Programs
IRS Technology Modernization Initiatives
Federal Civilian Agency IT Services Contracts
Computer Systems Design and Integration Services

Risk Flags

Cost Plus Fixed Fee contract type requires careful monitoring to prevent cost overruns.
Limited competition (two bidders) may reduce price discovery and negotiation leverage.
Scope creep is a potential risk in system integration projects if not clearly defined and managed.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $21.0 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. PRIME SYSTEMS INTEGRATION SERVIES

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 $21.0 million.

What is the period of performance?

Start: 2005-08-01. End: 2007-05-31.

What specific system integration services were performed under this contract?

The provided data indicates the contract was for 'PRIME SYSTEMS INTEGRATION SERVIES' under NAICS code 541512 (Computer Systems Design Services). However, the specific nature of these services is not detailed. System integration can encompass a wide range of activities, including designing, developing, and implementing complex IT solutions, integrating hardware and software components, managing data migration, and ensuring interoperability between different systems. For the IRS, these services could relate to tax processing systems, taxpayer databases, internal operational systems, or cybersecurity infrastructure. A deeper dive into the contract's statement of work would be necessary to understand the precise technical tasks and objectives.

How does the Cost Plus Fixed Fee (CPFF) structure impact cost control and contractor incentives?

The Cost Plus Fixed Fee (CPFF) contract structure means the government reimburses the contractor for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is often used when the scope of work is not precisely defined or is subject to change. While it allows for flexibility, it can incentivize contractors to incur higher costs, as their profit (the fixed fee) remains constant regardless of the total project cost. This necessitates strong government oversight to ensure costs are reasonable and allocable to the contract. The IRS would need robust mechanisms to monitor expenditures and ensure the contractor is operating efficiently to prevent cost overruns.

What is the typical performance record of General Dynamics Information Technology, Inc. on similar government contracts?

General Dynamics Information Technology, Inc. (GDIT) is a major federal contractor with a long history of performance across various agencies and service areas, including IT modernization, cloud services, and cybersecurity. While specific performance metrics for this particular contract are not detailed, GDIT generally has a substantial portfolio of large-scale government IT contracts. Assessing their track record would involve reviewing past performance evaluations, contract award histories, and any documented issues or successes on comparable system integration projects. Agencies often use past performance information as a key factor in future source selections.

How does the $21 million award compare to other IT system integration contracts for the IRS or similar agencies?

The $21 million award for system integration services is a significant, but not exceptionally large, sum within the context of federal IT spending. Large-scale system integration projects for agencies like the IRS can range from tens of millions to hundreds of millions, or even billions, of dollars over their lifecycle. For instance, major tax system modernization efforts or enterprise resource planning implementations often exceed this amount. This contract likely represents a specific phase or component of a larger IT strategy. Benchmarking would require comparing it against contracts with similar scope, complexity, and duration awarded to agencies of comparable size and mission.

What are the potential risks associated with a sole awardee in a 'full and open' competition with only two bidders?

While 'full and open' competition is the preferred method, having only two bidders, resulting in a single awardee, presents potential risks. Firstly, it suggests that the competitive landscape might be limited for this specific type of service or requirement, potentially due to high barriers to entry or specialized expertise needed. Secondly, with fewer bidders, the negotiating leverage for the government might be reduced, potentially leading to less favorable pricing than if there were a larger pool of competitors. The government must ensure that the chosen contractor offers the best value, even with limited competition, through thorough evaluation of technical approach, past performance, and proposed costs.

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)

Evaluated Preference: NONE

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: $33,612,177

Exercised Options: $30,173,222

Current Obligation: $21,023,338

Parent Contract

Parent Award PIID: TIRNO99D00001

IDV Type: IDC

Timeline