Treasury's $45.7M IT Services Contract with General Dynamics Faces Scrutiny for Value and Competition
Contract Overview
Contract Amount: $45,683,127 ($45.7M)
Contractor: General Dynamics Information Technology, Inc.
Awarding Agency: Department of the Treasury
Start Date: 2008-03-07
End Date: 2010-12-31
Contract Duration: 1,029 days
Daily Burn Rate: $44.4K/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 SERVICES CONTR
Place of Performance
Location: LANHAM, PRINCE GEORGE'S County, MARYLAND, 20706
State: Maryland Government Spending
Plain-Language Summary
Department of the Treasury obligated $45.7 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: PRIME SYSTEMS INTEGRATION SERVICES CONTR Key points: 1. The contract awarded to General Dynamics Information Technology, Inc. for Prime Systems Integration Services totaled $45.7 million. 2. Competition was full and open, suggesting a potentially competitive pricing environment. 3. The contract type is Cost Plus Fixed Fee, which can sometimes lead to cost overruns if not managed tightly. 4. The sector is IT, specifically Computer Systems Design Services, a common area for federal spending.
Value Assessment
Rating: fair
The Cost Plus Fixed Fee structure, while allowing flexibility, carries inherent risk of exceeding initial estimates. Benchmarking against similar IT integration contracts is crucial to assess if the $45.7M represents fair value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which generally promotes competitive pricing. However, the specific pricing discovery mechanisms and the final negotiated price relative to market rates are key to determining true value.
Taxpayer Impact: While competition was present, the Cost Plus Fixed Fee structure necessitates careful oversight to ensure taxpayer funds are used efficiently and effectively, preventing unnecessary cost escalation.
Public Impact
Taxpayers may be impacted by the efficiency of IT service delivery and the ultimate cost of the contract. The IRS relies on these integration services, so performance directly affects agency operations and public service. Transparency in contract spending and performance is vital for public trust in government IT investments.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type
- Potential for cost overruns
- Need for robust performance monitoring
Positive Signals
- Full and open competition
- Established contractor with experience
Sector Analysis
This contract falls within the IT sector, specifically Computer Systems Design Services. Federal spending in this area is substantial, and benchmarks for similar integration projects are essential for evaluating cost-effectiveness and contractor performance.
Small Business Impact
The data does not indicate any specific provisions or awards made to small businesses under this prime contract. Further analysis would be needed to determine if subcontracting opportunities were provided to small businesses.
Oversight & Accountability
Oversight of this contract would involve monitoring the contractor's performance against defined objectives and ensuring adherence to the Cost Plus Fixed Fee terms. Regular audits and performance reviews are critical for accountability.
Related Government Programs
- Computer Systems Design Services
- Department of the Treasury Contracting
- Internal Revenue Service Programs
Risk Flags
- Cost Plus Fixed Fee structure may lead to higher costs than fixed-price contracts.
- Potential for cost overruns if not closely managed.
- Need for detailed performance metrics to ensure value for money.
- Lack of specific small business subcontracting data.
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 $45.7 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. PRIME SYSTEMS INTEGRATION SERVICES CONTR
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 $45.7 million.
What is the period of performance?
Start: 2008-03-07. End: 2010-12-31.
How does the final cost of this contract compare to the initial bid and the benchmarked costs for similar IT system integration projects?
A comprehensive comparison of the final $45.7 million expenditure against initial bids and industry benchmarks for comparable IT system integration projects is necessary. This analysis should consider the scope of work, complexity, and duration. Deviations from benchmarks could indicate potential inefficiencies or unexpected challenges, requiring further investigation into cost drivers and contractor performance.
What specific performance metrics were established for this contract, and how effectively did General Dynamics meet them?
Performance metrics are crucial for assessing the effectiveness of IT integration services. Key metrics might include system uptime, successful data migration, integration success rates, and adherence to project timelines. Evaluating the contractor's performance against these predefined metrics provides insight into the value delivered and identifies areas where improvements might be needed for future contracts.
Given the Cost Plus Fixed Fee structure, what mechanisms were in place to control costs and prevent scope creep?
The Cost Plus Fixed Fee (CPFF) structure requires stringent cost controls and scope management. Mechanisms should include detailed cost tracking, regular financial reviews, and a robust change control process to prevent unauthorized scope creep. The government's oversight team plays a critical role in scrutinizing costs and ensuring that only allowable expenses are reimbursed, capped by the fixed fee.
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
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
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: $46,119,484
Exercised Options: $46,119,484
Current Obligation: $45,683,127
Parent Contract
Parent Award PIID: TIRNO99D00001
IDV Type: IDC
Timeline
Start Date: 2008-03-07
Current End Date: 2010-12-31
Potential End Date: 2011-12-31 00:00:00
Last Modified: 2015-02-16
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