Treasury's IRS awarded $29.4M for IT systems design, with General Dynamics as prime

Contract Overview

Contract Amount: $29,422,498 ($29.4M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2007-11-07

End Date: 2011-09-30

Contract Duration: 1,423 days

Daily Burn Rate: $20.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: PRIME SISS FY08 TASK ORDER

Place of Performance

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

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $29.4 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: PRIME SISS FY08 TASK ORDER Key points: 1. Contract value appears reasonable for complex IT systems design services. 2. Full and open competition suggests a competitive bidding process. 3. Potential risks include cost overruns given the Cost Plus Fixed Fee structure. 4. Performance period spans over three years, indicating a significant project. 5. This contract falls within the IT services sector, specifically computer systems design. 6. The award was made by the Department of the Treasury to support the IRS.

Value Assessment

Rating: good

The contract value of approximately $29.4 million for a duration of over three years for computer systems design services is within a reasonable range for large-scale IT projects. Benchmarking against similar contracts for IT systems design and integration services by agencies like the Department of Defense or other Treasury bureaus would provide a more precise value-for-money assessment. The Cost Plus Fixed Fee (CPFF) pricing structure, while common for complex projects where scope may evolve, carries inherent risks of cost escalation if not managed tightly. However, the fixed fee component provides some cost certainty for the contractor's profit.

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 bids. The presence of 2 bids suggests a moderate level of competition for this specific task order. While two bidders participated, the extent of pre-solicitation outreach and the number of interested parties before the final bids were submitted are not detailed here. A higher number of bidders typically correlates with more robust price discovery and potentially lower prices for the government.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple companies to vie for the contract, potentially driving down costs through competitive pricing. The fact that two bids were received suggests that the market was engaged, but further analysis could reveal if this level of competition was sufficient to secure the best possible value.

Public Impact

The primary beneficiary is the Internal Revenue Service (IRS), which will receive enhanced IT systems design services. These services are crucial for maintaining and improving the operational efficiency and technological infrastructure of the IRS. The geographic impact is primarily within the United States, supporting federal tax administration. The contract supports the IT workforce, likely involving skilled computer systems designers and related technical professionals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not meticulously managed.
Limited competition with only two bidders might have resulted in a higher price than if more firms had participated.
The specific performance metrics and deliverables are not detailed, making it difficult to assess performance outcomes.
The contract's duration of over three years requires sustained oversight to ensure continued alignment with IRS objectives.

Positive Signals

Awarded under full and open competition, ensuring a broad market solicitation.
The prime contractor, General Dynamics Information Technology, Inc., is a large and established entity with significant experience in government IT contracts.
The contract is for essential IT systems design services, critical for the IRS's mission.
The task order was awarded under a broader contract vehicle, potentially indicating pre-negotiated terms and efficiencies.

Sector Analysis

The IT services sector, particularly computer systems design, is a significant area of federal spending. This contract for $29.4 million fits within the broader category of IT support and modernization efforts undertaken by federal agencies. The market for these services is highly competitive, with numerous large and small businesses offering specialized expertise. Comparable spending benchmarks for similar IT systems design contracts within the federal government can vary widely based on complexity, duration, and specific requirements, but this award appears to be of moderate size within this sector.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. General Dynamics Information Technology, Inc. is a large business. There is no explicit information provided regarding subcontracting plans for small businesses. Without this data, it's difficult to assess the direct impact on the small business ecosystem for this specific award. However, large prime contractors are often encouraged or required by broader contract regulations to utilize small businesses for a portion of their subcontracting work.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contracting officer's representative (COR) within the Department of the Treasury's IRS. Accountability measures would be tied to the terms and conditions of the Cost Plus Fixed Fee contract, including adherence to the Statement of Work and delivery schedules. Transparency is facilitated through contract databases like FPDS, which record award details. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected.

Related Government Programs

IRS IT Modernization Programs
Department of the Treasury IT Services Contracts
Federal Civilian Agency IT Support Contracts
General Dynamics Information Technology Contracts

Risk Flags

Cost Overrun Risk (CPFF)
Limited Competition (2 Bidders)
Scope Creep Potential

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $29.4 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. PRIME SISS FY08 TASK ORDER

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 $29.4 million.

What is the period of performance?

Start: 2007-11-07. End: 2011-09-30.

What is the track record of General Dynamics Information Technology, Inc. with federal IT contracts, particularly with the IRS or Treasury?

General Dynamics Information Technology, Inc. (GDIT) has a substantial track record of performing IT services for various federal agencies, including the Department of the Treasury and the Internal Revenue Service (IRS). As a major government contractor, GDIT has been involved in numerous large-scale IT projects encompassing systems design, integration, cybersecurity, and infrastructure management. Their experience often includes complex, mission-critical systems. For the IRS specifically, GDIT has historically supported various tax processing and IT infrastructure initiatives. A detailed review of their past performance ratings, any past performance issues, and the scale of previous IRS/Treasury contracts would be necessary to fully assess their suitability and reliability for this specific task order. Their extensive experience suggests a strong capability to handle the demands of such a contract, but continuous monitoring of performance is always warranted.

How does the awarded amount of $29.4 million compare to similar IT systems design contracts for tax administration agencies?

The awarded amount of $29.4 million for computer systems design services over approximately three years is a moderate-sized contract within the federal IT landscape. For tax administration agencies like the IRS, which manage highly complex and sensitive data systems, IT modernization and design projects can range significantly in cost. Smaller, more focused design tasks might cost a few million dollars, while comprehensive system overhauls or new platform developments could easily exceed tens or hundreds of millions. Given the duration and the nature of systems design, $29.4 million appears to be a reasonable allocation, assuming the scope of work is substantial but not encompassing a complete agency-wide system replacement. Benchmarking against specific, comparable IRS or Treasury IT modernization contracts would provide a more precise comparison, but the figure itself does not immediately suggest overpricing or underfunding without further context on the specific deliverables.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for IT systems design?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract for IT systems design is the potential for cost overruns. In a CPFF structure, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing their profit. While the fixed fee provides some incentive for the contractor to control costs (as their profit doesn't increase with higher costs), it doesn't offer the same level of cost certainty as a firm-fixed-price contract. If the project scope expands, unforeseen technical challenges arise, or project management is inefficient, the total cost to the government can escalate significantly beyond initial estimates. Effective oversight, rigorous cost tracking, and clear change management processes are crucial to mitigate these risks and ensure the project stays within budget. The government bears the financial risk if costs exceed projections.

How effective is 'full and open competition' in ensuring value for money when only two bids are received?

Full and open competition is designed to maximize the number of potential bidders and foster robust price discovery, thereby enhancing value for money. However, when only two bids are received, the effectiveness of this mechanism is diminished compared to scenarios with numerous competitors. While two bidders still represent competition, it limits the range of pricing and innovative solutions that might emerge from a larger pool. The government may not achieve the lowest possible price or the most optimal solution. The value for money achieved depends heavily on the nature of the requirement, the market's capacity to provide solutions, and the government's ability to clearly define requirements and evaluate proposals effectively. In this case, the IRS received two bids, suggesting a moderately competitive environment, but it's less ideal than a situation with, for example, five or more bids.

What are the implications of this contract award on the IRS's IT infrastructure modernization efforts?

This contract award for computer systems design services directly supports the IRS's ongoing efforts to modernize its IT infrastructure. The IRS, like many large government agencies, relies on complex, often legacy, systems that require continuous updates, redesign, and integration to meet evolving taxpayer needs, security requirements, and operational efficiencies. By engaging General Dynamics Information Technology, Inc. for systems design, the IRS is investing in the foundational work necessary for improving its technological capabilities. This could involve designing new software architectures, enhancing data management systems, or planning the integration of new technologies. The success of this contract is therefore critical for the IRS's broader modernization roadmap, impacting its ability to process tax returns, manage taxpayer data securely, and deliver services effectively in the digital age.

Can the 'MD' (Maryland) state code indicate a specific geographic concentration for this contract's performance?

The 'MD' code in the contract data typically signifies the state where the prime contractor's facility or office associated with this contract is located, or where a significant portion of the work is performed. For General Dynamics Information Technology, Inc., Maryland is a major hub for their government contracting operations, particularly in the Washington D.C. metropolitan area, which is proximate to many federal agencies. Therefore, it is highly probable that a substantial part of the computer systems design services for this IRS contract was performed in Maryland or the surrounding region. This geographic concentration can have implications for local employment and economic activity, as well as potentially influencing the logistics and oversight of the contract.

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: $30,100,246

Exercised Options: $30,100,246

Current Obligation: $29,422,498

Parent Contract

Parent Award PIID: TIRNO99D00001

IDV Type: IDC

Timeline