DoD's $73.4M Army IT contract to SAIC shows fair competition but raises value questions
Contract Overview
Contract Amount: $73,435,039 ($73.4M)
Contractor: Science Applications International Corporation
Awarding Agency: Department of Defense
Start Date: 2017-02-02
End Date: 2018-03-07
Contract Duration: 398 days
Daily Burn Rate: $184.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: ENTERPRISE TECHNOLOGY SUPPORT ORDER IN SUPPORT OF U.S. ARMY HUMAN RESOURCES COMMAND IGF::OT::IGF
Place of Performance
Location: FORT KNOX, HARDIN County, KENTUCKY, 40122
State: Kentucky Government Spending
Plain-Language Summary
Department of Defense obligated $73.4 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION for work described as: ENTERPRISE TECHNOLOGY SUPPORT ORDER IN SUPPORT OF U.S. ARMY HUMAN RESOURCES COMMAND IGF::OT::IGF Key points: 1. The contract was awarded through full and open competition, indicating a healthy bidding environment. 2. Pricing appears to be at fair market value, though specific performance metrics are not detailed. 3. The contractor, SAIC, has a significant presence in government IT services. 4. This contract falls within the broader IT services sector, a large and competitive market. 5. The award was a delivery order against an existing indefinite-delivery/indefinite-quantity (IDIQ) contract. 6. The cost-plus-fixed-fee (CPFF) structure may incentivize cost overruns if not closely monitored.
Value Assessment
Rating: fair
The contract's total value of $73.4 million over approximately 13 months suggests a substantial investment in enterprise technology support. Benchmarking against similar IT support contracts is challenging without more granular data on the specific services rendered and performance outcomes. The CPFF pricing structure, while common, requires diligent oversight to ensure cost efficiency and prevent potential overruns. Without detailed performance metrics or comparisons to industry benchmarks for similar services, a definitive assessment of value for money is difficult.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, suggesting that multiple vendors were eligible to bid. The fact that it was a delivery order against an IDIQ contract implies that the initial IDIQ vehicle itself was competed. The presence of multiple bidders in the initial competition for the IDIQ likely contributed to price discovery and offered the government a range of options. However, the specific number of bidders for this particular delivery order is not provided.
Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and a wider selection of qualified vendors.
Public Impact
The U.S. Army Human Resources Command benefits from enhanced enterprise technology support. Services delivered include computer systems design and related services. The contract is geographically located in Kentucky (KY). The contract supports the Army's mission-critical human resources functions, impacting military personnel and their families. The contract likely supports a workforce of IT professionals and technicians.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee (CPFF) contract type can lead to cost overruns if not managed effectively.
- Lack of detailed performance metrics makes it difficult to assess true value for money.
- The contract duration of approximately 13 months may indicate a need for ongoing support, potentially leading to future spending.
Positive Signals
- Awarded through full and open competition, suggesting a robust bidding process.
- Contractor (SAIC) is a well-established entity with significant experience in government IT.
- Supports critical Army Human Resources Command functions, indicating strategic importance.
Sector Analysis
This contract falls within the Computer Systems Design Services (NAICS 541512) sector, a significant segment of the broader IT services industry. The government is a major consumer of these services, with spending often concentrated in areas supporting defense, intelligence, and civilian agency operations. The market is characterized by a mix of large prime contractors like SAIC and numerous smaller specialized firms. Benchmarks for similar IT support contracts vary widely based on scope, duration, and specific technical requirements.
Small Business Impact
This contract was not set aside for small businesses, and there is no indication of specific small business subcontracting requirements mentioned in the provided data. As a large contract awarded to a major prime contractor, it may offer subcontracting opportunities for small businesses, but this is not explicitly detailed. The absence of set-aside provisions suggests that the competition was focused on overall best value rather than specifically promoting small business participation.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the relevant Department of the Army contracting and technical representatives. The cost-plus-fixed-fee structure necessitates close monitoring of expenditures and performance to ensure compliance with contract terms and to control costs. Inspector General (IG) jurisdiction may apply if any fraud, waste, or abuse is suspected, but specific IG involvement is not indicated in the provided data. Transparency is generally facilitated through contract award databases, but detailed performance and cost data are often proprietary.
Related Government Programs
- Department of Defense IT Services
- Army IT Modernization Programs
- Enterprise Resource Planning (ERP) Systems Support
- IT Services for Human Resources Management
Risk Flags
- Cost-plus-fixed-fee structure requires diligent oversight to manage costs.
- Lack of detailed performance metrics hinders comprehensive value assessment.
- Contract duration is relatively short, potentially indicating ongoing future needs.
Tags
dod, department-of-the-army, it-services, computer-systems-design, full-and-open-competition, delivery-order, cost-plus-fixed-fee, science-applications-international-corporation, kentucky, enterprise-technology-support
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $73.4 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION. ENTERPRISE TECHNOLOGY SUPPORT ORDER IN SUPPORT OF U.S. ARMY HUMAN RESOURCES COMMAND IGF::OT::IGF
Who is the contractor on this award?
The obligated recipient is SCIENCE APPLICATIONS INTERNATIONAL CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $73.4 million.
What is the period of performance?
Start: 2017-02-02. End: 2018-03-07.
What is Science Applications International Corporation's (SAIC) track record with the Department of Defense, particularly in IT support contracts?
Science Applications International Corporation (SAIC) is a major government contractor with a substantial history of serving the Department of Defense (DoD) across various sectors, including IT services. They have consistently secured large contracts for systems engineering, software development, cybersecurity, and enterprise IT support. SAIC's experience with the DoD includes supporting complex command and control systems, logistics, and personnel management platforms, similar to the functions of the Army Human Resources Command. Their extensive portfolio demonstrates a deep understanding of military IT requirements and procurement processes. However, like many large contractors, they have also faced scrutiny and audits on specific contracts regarding cost, performance, and compliance, which is typical for the scale and complexity of their government work.
How does the $73.4 million value of this contract compare to other IT support contracts for similar Army commands?
The $73.4 million value for approximately 13 months of enterprise technology support for the Army Human Resources Command is substantial, reflecting the critical nature of HR systems. Comparing this to other Army commands requires looking at the scope and duration. For instance, IT support for large-scale logistics or intelligence systems might command higher values due to complexity and scale. Conversely, support for smaller, more specialized units might be less. Given that this is a delivery order against an IDIQ, the initial IDIQ vehicle likely encompassed a broader range of potential IT services and values. Without specific details on the services rendered and the exact performance period, a precise comparison is difficult, but the amount is consistent with significant IT support engagements within large federal agencies.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for IT services?
The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract for IT services is the potential for cost overruns. In a CPFF structure, the contractor is reimbursed for allowable costs plus a fixed fee representing their profit. If the contractor's costs exceed estimates, the government bears the burden of these increased expenses, while the contractor's profit remains fixed. This can disincentivize cost control by the contractor, as they are guaranteed their fee regardless of cost efficiency. Effective risk mitigation requires robust government oversight, detailed cost tracking, clear performance metrics, and strong contract administration to ensure that costs remain reasonable and that the contractor is delivering the required services efficiently.
What is the typical duration and spending pattern for enterprise technology support contracts within the Department of the Army?
Enterprise technology support contracts within the Department of the Army often have multi-year durations, frequently structured under Indefinite-Delivery/Indefinite-Quantity (IDIQ) vehicles with subsequent delivery or task orders. These orders can range from a few months to several years, depending on the program's lifecycle and funding. Spending patterns can vary significantly based on modernization efforts, system sustainment needs, and specific mission requirements. Annual spending can range from hundreds of thousands to tens or even hundreds of millions of dollars for large-scale enterprise-wide support. Contracts like this one, with a duration of just over a year and a value of $73.4 million, represent a significant but not exceptionally long-term investment, often indicative of ongoing sustainment or specific project support within a larger IT ecosystem.
How does the 'Computer Systems Design Services' classification impact the scope and expected outcomes of this contract?
The 'Computer Systems Design Services' classification (NAICS 541512) indicates that the contract's primary focus is on planning and designing computer systems that integrate hardware, software, and communication technologies. This typically involves analyzing user needs, designing system architecture, developing software, and overseeing the implementation and integration of these systems. For the Army Human Resources Command, this likely means designing, developing, or enhancing systems that manage personnel data, payroll, benefits, training, and other HR functions. The expected outcomes would include improved system efficiency, enhanced data management capabilities, better user interfaces, and potentially the integration of new technologies to support evolving HR requirements. It implies a focus on the 'brains' behind the IT infrastructure rather than just routine maintenance or hardware provision.
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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 12010 SUNSET HILLS RD, RESTON, VA, 20190
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $73,435,039
Exercised Options: $73,435,039
Current Obligation: $73,435,039
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Parent Contract
Parent Award PIID: GS00Q09BGD0048
IDV Type: GWAC
Timeline
Start Date: 2017-02-02
Current End Date: 2018-03-07
Potential End Date: 2018-03-07 00:00:00
Last Modified: 2022-11-03
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