DoD's $22.4M DMHRSI support contract awarded to CGI Federal Inc. shows fair value with moderate competition

Contract Overview

Contract Amount: $22,366,926 ($22.4M)

Contractor: CGI Federal Inc.

Awarding Agency: Department of Defense

Start Date: 2012-09-29

End Date: 2016-03-28

Contract Duration: 1,276 days

Daily Burn Rate: $17.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: BASE PERIOD SUPPORT FOR DMHRSI

Place of Performance

Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22042

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $22.4 million to CGI FEDERAL INC. for work described as: BASE PERIOD SUPPORT FOR DMHRSI Key points: 1. The contract's value appears reasonable given the duration and services provided. 2. Competition was moderate, with 3 bidders participating in the full and open process. 3. Risk indicators are low, with a firm fixed-price contract type and established contractor. 4. Performance context suggests a need for ongoing IT support for a critical defense system. 5. This contract falls within the IT services sector, specifically computer systems design. 6. The award was a delivery order under a larger contract vehicle.

Value Assessment

Rating: good

The contract's total value of $22.4 million over approximately 3.5 years (1276 days) suggests a reasonable annual spend of around $6.4 million. Benchmarking against similar IT support contracts for large-scale systems indicates this pricing is within expected ranges. The firm fixed-price structure provides cost certainty for the government, contributing to good value.

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 offers. With three bidders participating, the level of competition was moderate. This suggests that while multiple companies vied for the work, the market may not be saturated, potentially influencing pricing dynamics.

Taxpayer Impact: A moderate level of competition generally benefits taxpayers by encouraging competitive pricing. However, with only three bidders, there's a possibility that prices could be higher than in a more crowded marketplace.

Public Impact

The Department of Defense benefits from continued support for its Defense Medical Human Resources System - Internet (DMHRSI). Essential computer systems design and support services are delivered to maintain critical defense IT infrastructure. The primary geographic impact is within the Department of Defense's operational sphere. Workforce implications include the employment of IT professionals by CGI Federal Inc. to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if follow-on contracts are not competitively bid.
Reliance on a single contractor for critical system support could pose a risk if performance degrades.

Positive Signals

Firm fixed-price contract limits cost overrun risks for the government.
Award to an established contractor (CGI Federal Inc.) suggests a degree of reliability.
Full and open competition provides a baseline for fair pricing and access to qualified vendors.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on computer systems design and integration. The market for such services supporting large government systems is substantial, with numerous large and small businesses offering specialized expertise. This contract represents a typical engagement for maintaining and supporting complex, mission-critical IT platforms within the federal government, particularly within the defense sector.

Small Business Impact

The contract was not set aside for small businesses, and the data indicates no small business subcontracting requirements were explicitly noted. This suggests that the primary award went to a large business, and the direct impact on the small business ecosystem may be limited unless CGI Federal Inc. actively engages small businesses for subcontracting opportunities not detailed in this award data.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, requiring delivery of specified services. Transparency is facilitated through contract award databases, though detailed performance metrics and specific oversight activities are not publicly detailed in this summary.

Related Government Programs

Defense Medical Human Resources System - Internet (DMHRSI)
Department of Defense IT Support Services
Computer Systems Design Services

Risk Flags

Moderate competition level
Potential for vendor lock-in
Reliance on single contractor for critical system

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.4 million to CGI FEDERAL INC.. BASE PERIOD SUPPORT FOR DMHRSI

Who is the contractor on this award?

The obligated recipient is CGI FEDERAL INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $22.4 million.

What is the period of performance?

Start: 2012-09-29. End: 2016-03-28.

What is CGI Federal Inc.'s track record with similar IT support contracts for the Department of Defense?

CGI Federal Inc. has a significant history of performing IT support and systems integration services for various U.S. government agencies, including the Department of Defense. They are a large, established contractor with numerous awards across different federal entities. While specific performance details for every contract are not always public, their continued success in winning competitive bids suggests a generally positive track record in delivering complex IT solutions and support. Analyzing their past performance on contracts of similar size and scope, particularly those involving defense healthcare or human resources systems, would provide further insight into their reliability and capability in meeting demanding government requirements.

How does the $22.4 million contract value compare to other IT support contracts for defense systems?

The $22.4 million contract value for approximately 3.5 years of support for the DMHRSI system represents an average annual spend of roughly $6.4 million. This figure is moderate when compared to the vast landscape of IT support contracts within the Department of Defense. Larger, more complex system integrations or sustainment efforts can easily reach tens or hundreds of millions of dollars annually. Conversely, smaller, more specialized IT support tasks might fall below the $1 million annual mark. Therefore, this contract's value appears to be in the mid-range for sustainment and support of a significant, albeit not the largest, defense IT system.

What are the primary risks associated with this specific contract award?

The primary risks associated with this contract are related to performance and potential vendor lock-in. As a firm fixed-price contract, the risk of cost overruns is primarily on the contractor, CGI Federal Inc. However, if the contractor fails to perform adequately, the government could face disruptions in critical DMHRSI system support, impacting military personnel and healthcare administration. Another risk is vendor lock-in; if CGI Federal Inc. becomes deeply embedded in the system's operations, future recompetes could face challenges if competitors lack the same intimate knowledge, potentially leading to less competitive pricing in the future. Ensuring clear performance metrics and robust oversight are key to mitigating these risks.

How effective has CGI Federal Inc. been in delivering IT services under similar firm fixed-price contracts?

Assessing the effectiveness of CGI Federal Inc. on similar firm fixed-price contracts requires detailed performance data, which is not fully available in the provided summary. However, the firm fixed-price structure itself is designed to incentivize efficiency and cost control by the contractor. When successful, it leads to predictable costs for the government. CGI Federal's continued awards suggest they are generally capable of meeting these terms. Effectiveness would be measured by adherence to schedule, meeting technical specifications, and maintaining system availability and performance standards for DMHRSI. Without specific performance reports or user feedback, a definitive judgment on effectiveness is limited, but the contract type itself aims for a high degree of contractor responsibility.

What are the historical spending patterns for DMHRSI support prior to this award?

Historical spending patterns for DMHRSI support prior to this specific $22.4 million award (2012-2016) would likely show a similar trend of ongoing investment in maintaining and updating this critical defense system. The Defense Medical Human Resources System - Internet (DMHRSI) is a long-standing platform, implying consistent funding needs for sustainment, upgrades, and operational support. Previous contracts would have been awarded to support its functionality. Analyzing the total expenditure over the system's lifecycle would reveal the cumulative investment. The $22.4 million figure represents a significant, but likely not unprecedented, portion of the system's total support costs over its operational history.

What is the significance of the 'Computer Systems Design Services' NAICS code (541512) in the context of this contract?

The NAICS code 541512, 'Computer Systems Design Services,' is highly relevant as it defines the core nature of the work performed under this contract. This classification encompasses a broad range of activities, including analyzing user needs, designing and developing custom software, integrating hardware and software, and providing ongoing technical support and maintenance for complex IT systems. For the DMHRSI system, this means CGI Federal Inc. is responsible for ensuring the system functions as intended, troubleshooting issues, potentially implementing updates or modifications, and generally maintaining the operational integrity of the defense medical and HR IT infrastructure. It signifies a focus on the design, implementation, and sustainment of the system's architecture.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: CGI Inc (UEI: 248513116)

Address: 12601 FAIR LAKES CIR, FAIRFAX, VA, 22033

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $22,371,926

Exercised Options: $22,366,926

Current Obligation: $22,366,926

Subaward Activity

Number of Subawards: 24

Total Subaward Amount: $60,788,304

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS00Q09BGD0022

IDV Type: GWAC

Timeline