General Dynamics IT awarded $20M contract for IRS computer systems design services

Contract Overview

Contract Amount: $20,087,494 ($20.1M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2011-10-01

End Date: 2015-02-27

Contract Duration: 1,245 days

Daily Burn Rate: $16.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: INCREMENTAL FUNDING T.O 158 (CSC)

Place of Performance

Location: LANHAM, PRINCE GEORGE'S County, MARYLAND, 20706, UNITED STATES OF AMERICA

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $20.1 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: INCREMENTAL FUNDING T.O 158 (CSC) Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract duration of 1245 days indicates a significant, long-term need for these services. 3. The Computer Systems Design Services NAICS code (541512) points to a focus on IT infrastructure and support. 4. The contract was awarded to General Dynamics Information Technology, Inc., a large federal contractor. 5. The contract type is Cost Plus Fixed Fee, which can present cost control challenges. 6. The award was made by the Department of the Treasury, specifically the Internal Revenue Service.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more detailed cost breakdowns and comparisons to similar IRS IT service contracts. The Cost Plus Fixed Fee structure means actual costs could exceed initial estimates, making a definitive value assessment difficult. However, the fixed fee component provides some level of cost certainty for the contractor's effort. The award amount of approximately $20 million over its duration suggests a substantial investment in IT infrastructure.

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 two bidders suggests a moderate level of competition for this requirement. While two bidders is better than a sole-source award, a higher number of bidders would typically lead to more robust price discovery and potentially lower costs for the government.

Taxpayer Impact: The full and open competition, despite having only two bidders, likely provided the IRS with a reasonable range of pricing options, potentially saving taxpayer dollars compared to a sole-source procurement.

Public Impact

The primary beneficiary is the Internal Revenue Service, which will receive enhanced computer systems design services. These services are crucial for maintaining and improving the IT infrastructure that supports tax administration. The contract's impact is largely internal to the IRS's operational efficiency and technological capabilities. The workforce implications are primarily for General Dynamics Information Technology, Inc., which will provide the skilled personnel for these services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can lead to cost overruns if not managed tightly.
Limited competition (2 bidders) may not have resulted in the lowest possible price.
The specific details of the 'INCREMENTAL FUNDING T.O 158 (CSC)' are not fully elaborated, raising questions about the scope and evolution of the work.

Positive Signals

Awarded through full and open competition, ensuring a broad search for qualified contractors.
The contract is for computer systems design services, addressing a critical IT need for the IRS.
The contractor, General Dynamics Information Technology, Inc., is an established entity with federal contracting experience.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on computer systems design services. The IT services market for the federal government is substantial, with agencies like the IRS heavily reliant on sophisticated IT systems for their operations. Comparable spending benchmarks would involve looking at other large IT service contracts awarded to system integrators and design firms by agencies of similar size and complexity, such as other Treasury bureaus or large civilian agencies.

Small Business Impact

This contract does not appear to have a small business set-aside, as indicated by 'sb': false. There is also no explicit mention of subcontracting goals for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal, with the primary award going to a large business. Future analysis would require reviewing subcontracting reports to understand any indirect benefits to small businesses.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program management office within the IRS. Accountability measures are embedded in the Cost Plus Fixed Fee structure, requiring detailed reporting of costs and progress against the fixed fee. Transparency is generally maintained through contract award databases and public reporting, though specific performance metrics and detailed cost breakdowns may not always be publicly available.

Related Government Programs

IRS IT Modernization Programs
Treasury Department IT Services
Federal Civilian Agency IT Contracts
Computer Systems Design Services Contracts

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
Limited competition (2 bidders) may have resulted in a higher price than with more bidders.
The specific scope and deliverables of T.O. 158 are not detailed, impacting value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $20.1 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. INCREMENTAL FUNDING T.O 158 (CSC)

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 $20.1 million.

What is the period of performance?

Start: 2011-10-01. End: 2015-02-27.

What is the track record of General Dynamics Information Technology, Inc. in delivering similar computer systems design services to the federal government?

General Dynamics Information Technology, Inc. (GDIT) has a long and extensive history of providing IT services, including computer systems design, to various federal agencies. As a major federal contractor, GDIT has been involved in numerous large-scale IT projects across defense, civilian, and intelligence communities. Their experience often includes modernizing legacy systems, developing new software and hardware solutions, and providing ongoing IT support and maintenance. Specific to computer systems design, GDIT has capabilities in areas such as network architecture, cloud computing integration, cybersecurity solutions, and data management systems. While this specific contract is for the IRS, GDIT's broader portfolio demonstrates a capacity to handle complex IT requirements. However, a detailed review of their past performance on similar IRS contracts, including client satisfaction, adherence to schedule, and budget performance, would be necessary for a comprehensive assessment.

How does the awarded amount of approximately $20 million compare to similar computer systems design contracts for tax administration agencies?

Comparing the $20 million award for IRS computer systems design services requires context regarding the contract's duration (1245 days, approximately 3.4 years) and scope. Federal IT contracts, especially those involving system design and modernization for large agencies like the IRS, can range significantly in value. Contracts for similar services at other large civilian agencies, such as the Social Security Administration or the Department of Health and Human Services, often fall within the multi-million to tens of millions of dollars range for projects of this duration. The IRS itself has a history of substantial IT investments. Without specific details on the deliverables and complexity of this particular task order (T.O. 158), a precise benchmark is difficult. However, $20 million over 3.4 years for system design services for a critical agency like the IRS appears to be within the expected range for such a requirement, assuming the scope is commensurate with the funding.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract type for this service?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract type for computer systems design services is the potential for cost overruns, which can impact the government's financial outlay. In a CPFF contract, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fixed fee provides some incentive for the contractor to control costs (as their profit is capped), there is less direct incentive to minimize costs compared to fixed-price contracts. If the contractor's actual costs exceed projections, the government pays those costs. This structure can be beneficial when the scope of work is not well-defined or is expected to evolve, allowing for flexibility. However, it requires robust government oversight to ensure that all costs claimed are reasonable, allocable, and allowable, and that the contractor is making diligent efforts to manage expenses efficiently. The government bears a significant portion of the cost risk.

What does the limited competition (2 bidders) suggest about the effectiveness of the procurement process for this contract?

The fact that this contract was awarded under 'full and open competition' but only attracted two bidders suggests a potentially limited competitive landscape for this specific requirement. While 'full and open' ensures the opportunity for broad participation, the number of actual bids received is a key indicator of market interest and the level of competition. Two bidders indicate that the requirement was met by at least two capable firms, which is preferable to a sole-source award. However, a higher number of bidders typically fosters more robust price discovery and can lead to more competitive pricing for the government. The limited number of bidders might suggest factors such as high barriers to entry (e.g., specialized expertise, security clearances required), the specific nature of the requirement, or perhaps the overall market size for such services. It implies that while competition existed, it may not have been as intense as it could have been, potentially impacting the final price achieved.

How has federal spending on computer systems design services evolved over the past five years, and where does this contract fit in?

Federal spending on computer systems design services has generally seen a consistent increase over the past five years, driven by the ongoing need for agencies to modernize legacy IT systems, adopt cloud technologies, enhance cybersecurity, and improve overall digital infrastructure. Agencies like the IRS are under constant pressure to upgrade their technological capabilities to handle increasing data volumes, improve taxpayer services, and ensure data security. This $20 million contract for the IRS fits within this broader trend of sustained federal investment in IT modernization and support services. While specific figures for the 'computer systems design services' category (NAICS 541512) fluctuate annually based on agency priorities and budget allocations, the overall trajectory indicates a strong and persistent demand. This contract represents a specific allocation of resources towards maintaining and improving the IRS's core IT infrastructure, aligning with the government-wide push for digital transformation.

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)

Contractor Details

Parent Company: Computer Sciences Corporation (UEI: 009581091)

Address: MARYLAND TECHNOLOGY CENTER, LANHAM, MD, 20706

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $25,672,892

Exercised Options: $25,672,892

Current Obligation: $20,087,494

Parent Contract

Parent Award PIID: TIRNO99D00001

IDV Type: IDC

Timeline