Treasury's $15.1M IT contract for system integration services awarded to General Dynamics Information Technology

Contract Overview

Contract Amount: $15,157,503 ($15.2M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2007-04-01

End Date: 2008-09-30

Contract Duration: 548 days

Daily Burn Rate: $27.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: PRIME SYS INTEGRATION SERVICES CONTR IFS

Place of Performance

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

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $15.2 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: PRIME SYS INTEGRATION SERVICES CONTR IFS 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 the contract was 548 days, indicating a medium-term project. 4. The contract was awarded to a single prime contractor, General Dynamics Information Technology. 5. The North American Industry Classification System (NAICS) code is 541512, for Computer Systems Design Services. 6. The contract was awarded under the 'Other' category, likely due to specific IT system integration needs. 7. The contract was awarded as 'Awarded', indicating it has been completed. 8. The contract was not set aside for small businesses.

Value Assessment

Rating: fair

The contract's value of $15.1 million for system integration services over approximately 18 months appears within a reasonable range for IT projects of this nature. However, without specific details on the scope of work and deliverables, a precise value-for-money assessment is challenging. The Cost Plus Fixed Fee (CPFF) contract type introduces some risk, as it allows for reimbursement of costs plus a fixed fee, potentially leading to higher final costs if not closely monitored. Benchmarking against similar large-scale IT system integration contracts would provide a clearer picture of its cost-effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through a full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bids suggests a moderate level of competition for this IT system integration requirement. While two bidders is better than one, a higher number of bids typically leads to more robust price discovery and potentially better pricing for the government. The contracting agency likely sought to maximize competition to ensure fair pricing and access to a range of qualified vendors.

Taxpayer Impact: A full and open competition, even with two bidders, generally benefits taxpayers by encouraging competitive pricing and ensuring that the government receives services from qualified contractors at a reasonable cost. This process helps prevent inflated prices that might occur in less competitive scenarios.

Public Impact

The primary beneficiaries of this contract are the Department of the Treasury and the Internal Revenue Service (IRS), who receive enhanced IT system integration services. The services delivered are related to computer systems design and integration, crucial for the efficient operation of tax administration systems. The geographic impact is primarily within the United States, supporting federal government operations. The contract supports the IT workforce within General Dynamics Information Technology and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can incentivize contractors to incur costs, potentially leading to budget overruns if not managed rigorously.
Limited competition (two bidders) may have resulted in a higher price than if more vendors had participated.
The specific system integration services and their complexity are not detailed, making it difficult to fully assess performance risks.
The contract's duration and scope require careful oversight to ensure timely and effective delivery of integrated systems.

Positive Signals

Awarded through full and open competition, indicating an effort to secure the best value through a broad solicitation.
The prime contractor, General Dynamics Information Technology, is a large and established company with significant experience in government IT contracts.
The contract was awarded by the Department of the Treasury, a major federal agency with established procurement processes.
The NAICS code 541512 points to a specialized IT service area, suggesting a focused and necessary requirement.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically in computer systems design and integration services. The federal IT market is substantial, with agencies consistently investing in modernizing and integrating their complex systems. Contracts like this are essential for maintaining and upgrading the technological infrastructure that supports government operations. Benchmarks for similar IT system integration contracts can vary widely based on complexity, duration, and the specific technologies involved, but large-scale projects often run into millions or tens of millions of dollars.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting plans specifically targeting small businesses. The prime contractor, General Dynamics Information Technology, is a large business. This means that the direct economic benefit to the small business ecosystem from this specific prime contract is likely minimal, unless General Dynamics has its own robust small business subcontracting program that is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program management office within the Department of the Treasury or the IRS. Accountability measures would be tied to the contract's performance work statement and milestones. Transparency is generally facilitated through contract award databases like FPDS-NG. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's performance or closeout.

Related Government Programs

IT System Modernization Programs
Enterprise Resource Planning (ERP) Implementations
Cloud Migration Services
Cybersecurity Integration Projects
Data Center Consolidation Initiatives

Risk Flags

Cost Plus Fixed Fee contract type
Moderate competition level (2 bidders)

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $15.2 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. PRIME SYS INTEGRATION SERVICES CONTR IFS

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 $15.2 million.

What is the period of performance?

Start: 2007-04-01. End: 2008-09-30.

What was the specific scope of work for the PRIME SYS INTEGRATION SERVICES CONTR IFS contract?

The provided data does not detail the specific scope of work for the PRIME SYS INTEGRATION SERVICES CONTR IFS contract. However, based on the NAICS code 541512 (Computer Systems Design Services) and the contract title, it can be inferred that the contract involved the design, development, integration, and potentially maintenance of complex IT systems for the Department of the Treasury, likely supporting the Internal Revenue Service (IRS). This could include integrating new software, hardware, or network components into existing infrastructure, ensuring interoperability, and potentially migrating data or functionalities between systems. The Cost Plus Fixed Fee (CPFF) structure suggests that the exact costs were not fully predictable at the outset, and the fixed fee component was negotiated based on the estimated effort.

How does the $15.1 million contract value compare to similar IT system integration contracts awarded by the Treasury or IRS?

The $15.1 million contract value for IT system integration services over approximately 18 months is a significant but not extraordinary amount for federal IT projects. The Department of the Treasury and the IRS are large agencies with substantial IT needs, often undertaking complex system overhauls and integrations. Comparable contracts for enterprise-level system integration, modernization, or the implementation of major financial or tax processing systems can range from tens of millions to hundreds of millions of dollars. Therefore, while substantial, this $15.1 million contract appears to be within the typical range for a focused system integration effort within these agencies, rather than a complete enterprise-wide overhaul.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for system integration?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract for system integration is the potential for cost overruns. In a CPFF arrangement, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. If the contractor's costs exceed initial estimates, the government bears that increased cost. This structure can reduce the contractor's incentive to control costs rigorously, as their profit (the fixed fee) remains constant regardless of the actual expenses. Effective oversight, detailed cost tracking, and robust performance metrics are crucial to mitigate these risks and ensure the project stays within budget.

What does the 'full and open competition' with two bidders imply for the effectiveness of the procurement process?

A 'full and open competition' signifies that the solicitation was made available to all interested and qualified sources, maximizing the potential pool of bidders. The fact that only two bids were received suggests that while the process was open, the number of capable and interested contractors for this specific IT system integration requirement might have been limited. This level of competition (two bidders) is generally considered moderate. It is better than a sole-source award, as it introduces some price pressure and choice. However, it may not be as effective in driving down prices or fostering innovation as a competition with a larger number of bids, which could indicate a more robust market response.

What is the track record of General Dynamics Information Technology (GDIT) in handling similar federal IT integration contracts?

General Dynamics Information Technology (GDIT), now part of General Dynamics, has a long and extensive track record of successfully performing large-scale IT integration and services contracts for numerous U.S. federal agencies, including the Department of the Treasury and the IRS. They have been involved in complex projects ranging from cloud computing and cybersecurity to enterprise resource planning (ERP) systems and data center modernization. Their experience typically includes managing significant budgets, large project teams, and meeting stringent performance requirements. While specific performance details for every contract are not publicly available, GDIT is generally considered a major player with substantial capabilities in the federal IT sector, often winning significant contract awards.

How has federal spending on IT system integration services evolved over the period this contract was active (2007-2008) and subsequently?

Federal spending on IT system integration services has generally trended upwards and become more complex since the 2007-2008 period when this contract was active. During that time, agencies were focused on modernizing legacy systems and improving data management. Post-2008, spending has increasingly shifted towards cloud computing, cybersecurity, data analytics, and agile development methodologies. While the fundamental need for system integration remains, the nature of the services and the technologies involved have evolved significantly. Overall federal IT spending has remained a substantial portion of agency budgets, reflecting the critical role of technology in government operations, with integration continuing to be a key component of modernization efforts.

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: $15,157,503

Exercised Options: $15,157,503

Current Obligation: $15,157,503

Parent Contract

Parent Award PIID: TIRNO99D00001

IDV Type: IDC

Timeline