Treasury's IRS awards $14.5M IT contract to General Dynamics for computer systems design
Contract Overview
Contract Amount: $14,550,390 ($14.6M)
Contractor: General Dynamics Information Technology, Inc.
Awarding Agency: Department of the Treasury
Start Date: 2006-11-10
End Date: 2007-11-09
Contract Duration: 364 days
Daily Burn Rate: $40.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: PRIME CONTRACT - CADE - FY07 INCREMENTAL FUNDING
Place of Performance
Location: LANHAM, PRINCE GEORGE'S County, MARYLAND, 20706
State: Maryland Government Spending
Plain-Language Summary
Department of the Treasury obligated $14.6 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: PRIME CONTRACT - CADE - FY07 INCREMENTAL FUNDING Key points: 1. Contract value is $14.5M for one year of IT services. 2. General Dynamics Information Technology, Inc. is the sole awardee. 3. The contract type is Cost Plus Fixed Fee, which can pose cost control risks. 4. The sector is Information Technology, specifically Computer Systems Design Services.
Value Assessment
Rating: fair
The contract is Cost Plus Fixed Fee, which offers less price certainty than fixed-price contracts. Benchmarking against similar Cost Plus Fixed Fee contracts for IT services is needed to assess value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the specific pricing strategies and negotiation outcomes are not detailed, impacting price discovery assessment.
Taxpayer Impact: Taxpayer funds are used for this IT service contract. The Cost Plus Fixed Fee structure requires careful oversight to ensure cost efficiency and prevent overspending.
Public Impact
Supports IRS operations through essential IT services. Potential for cost overruns due to Cost Plus Fixed Fee contract type. General Dynamics is a major defense and IT contractor, indicating established capabilities. Awarded under full and open competition, suggesting a fair process.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type.
- Limited information on specific performance metrics.
- Potential for scope creep without strict management.
Positive Signals
- Awarded under full and open competition.
- Experienced contractor (General Dynamics).
- Clear period of performance.
Sector Analysis
This contract falls within the Information Technology sector, specifically Computer Systems Design Services. Spending in this area is critical for government operations, but requires careful management to ensure cost-effectiveness.
Small Business Impact
The awardee is General Dynamics Information Technology, Inc., a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award.
Oversight & Accountability
The Cost Plus Fixed Fee contract type necessitates robust oversight from the IRS to monitor costs, ensure performance, and prevent contractor inefficiencies. The award of 'DO' (Defense Order) might indicate a specific procurement mechanism.
Related Government Programs
- Computer Systems Design Services
- Department of the Treasury Contracting
- Internal Revenue Service Programs
Risk Flags
- Cost Plus Fixed Fee contract type.
- Potential for cost overruns.
- Limited transparency on fee structure.
- Need for strong contract oversight.
- No small business participation indicated.
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 $14.6 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. PRIME CONTRACT - CADE - FY07 INCREMENTAL FUNDING
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 $14.6 million.
What is the period of performance?
Start: 2006-11-10. End: 2007-11-09.
What is the typical profit margin for Cost Plus Fixed Fee IT contracts of this size and scope, and how does General Dynamics' fee compare?
Assessing the 'fixed fee' component of a Cost Plus Fixed Fee contract requires detailed knowledge of the contractor's proposed fee structure and the agency's negotiation strategy. Typically, fees are a percentage of the estimated cost, and competitive bidding aims to secure a reasonable fee. Without specific data on General Dynamics' fee percentage and industry benchmarks for similar IT services, a precise comparison is difficult, but it should be scrutinized against established government contracting norms.
What are the key performance indicators (KPIs) for this contract, and how will they be monitored to mitigate risks associated with the Cost Plus Fixed Fee structure?
Effective oversight of a Cost Plus Fixed Fee contract hinges on clearly defined Key Performance Indicators (KPIs) and rigorous monitoring. The IRS must establish specific, measurable, achievable, relevant, and time-bound (SMART) goals for the computer systems design services. Regular performance reviews, milestone tracking, and independent verification of deliverables are crucial to ensure the contractor meets expectations and to control costs, thereby mitigating the inherent risks of this contract type.
How does the $14.5M award compare to the estimated value of similar computer systems design services contracts awarded by the government in FY07?
Benchmarking this $14.5M award against similar government contracts for Computer Systems Design Services in FY07 requires access to comprehensive contract databases and analysis tools. Factors like contract duration, scope of work, specific services rendered, and the agency awarding the contract all influence pricing. A preliminary assessment suggests the value is moderate for a one-year IT services contract, but a detailed comparison is necessary to determine if it represents good value for taxpayers.
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: $15,565,607
Exercised Options: $15,565,607
Current Obligation: $14,550,390
Parent Contract
Parent Award PIID: TIRNO99D00001
IDV Type: IDC
Timeline
Start Date: 2006-11-10
Current End Date: 2007-11-09
Potential End Date: 2007-11-09 00:00:00
Last Modified: 2015-02-16
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