DoD's $33.5M IT support contract to General Dynamics shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $33,473,417 ($33.5M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2015-08-03

End Date: 2017-11-03

Contract Duration: 823 days

Daily Burn Rate: $40.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::CT::IGF BASE PERIOD - APP SUPPORT SERVICES

Place of Performance

Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22042

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $33.5 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: IGF::CT::IGF BASE PERIOD - APP SUPPORT SERVICES Key points: 1. Contract value appears reasonable given the scope of application support services. 2. Full and open competition was utilized, but only one bid was received. 3. Risk indicators are moderate, with a focus on performance and delivery. 4. Contract performance context is within the broader IT services sector for defense. 5. Positioned within IT services, specifically application support for the Army. 6. The fixed-price contract type helps mitigate cost overrun risks.

Value Assessment

Rating: good

The contract's total value of approximately $33.5 million over its 3-year period suggests a reasonable annual spend for application support services. Benchmarking against similar IT support contracts within the Department of Defense indicates that the pricing structure is competitive, especially considering the specialized nature of the services. The firm fixed-price award type further supports value for money by shifting cost risk to the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, which is the preferred method for ensuring the widest possible participation. However, only one bid was received from General Dynamics Information Technology, Inc. This limited response, despite the broad solicitation, could indicate potential barriers to entry for other firms or a lack of market interest in this specific requirement at the time of solicitation.

Taxpayer Impact: While full and open competition was advertised, the single bid suggests that taxpayers may not have benefited from the full spectrum of potential price reductions that a more robust bidding process could have yielded.

Public Impact

The Department of the Army benefits from continued application support services, ensuring operational continuity. End-users within the Army receive support for critical applications, maintaining productivity. The contract supports IT infrastructure and personnel within the defense sector. Geographic impact is primarily within the continental United States where Army IT operations are based.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition despite full and open solicitation raises questions about market dynamics.
Reliance on a single vendor for critical application support could pose future supply chain risks.
The duration of the contract and its fixed-price nature require careful monitoring of performance to ensure value.

Positive Signals

Firm fixed-price contract type provides cost certainty for the government.
General Dynamics Information Technology, Inc. is a large, established contractor with a significant presence in the federal IT market.
The contract supports essential IT functions for the Department of the Army.

Sector Analysis

The IT services sector, particularly within defense, is characterized by large, complex contracts often awarded to major system integrators. This contract for application support services falls within the broader category of IT professional services, which includes areas like software maintenance, help desk support, and system administration. The market size for defense IT spending is substantial, with agencies like the Department of the Army consistently investing in maintaining and upgrading their technological infrastructure.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by the 'sb' field being false. Furthermore, the prime contractor, General Dynamics Information Technology, Inc., is a large business. There is no explicit information provided regarding subcontracting plans for small businesses. This suggests that the primary benefits for small businesses would likely stem from indirect opportunities within the broader IT ecosystem rather than direct set-aside awards for this specific contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program management office within the Department of the Army. Performance monitoring, quality assurance, and adherence to contract terms are standard oversight mechanisms. Transparency is generally maintained through contract databases like FPDS, where award details are published. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Army Application Development and Support
Department of Defense IT Modernization Programs
IT Professional Services Contracts
Software Maintenance and Support Contracts

Risk Flags

Limited competition despite full and open solicitation.
Potential for higher costs due to single bid.
Contract performance monitoring is crucial.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.5 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. IGF::CT::IGF BASE PERIOD - APP SUPPORT SERVICES

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 Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $33.5 million.

What is the period of performance?

Start: 2015-08-03. End: 2017-11-03.

What is the track record of General Dynamics Information Technology, Inc. on similar federal contracts?

General Dynamics Information Technology, Inc. (GDIT) has a long and extensive history of performing IT services for the federal government, including numerous contracts with the Department of Defense and the Department of the Army. Their portfolio typically includes large-scale IT support, system integration, cybersecurity, and cloud services. While specific performance metrics for past contracts are not detailed here, GDIT is generally recognized as a major player in the federal IT landscape, often handling complex and mission-critical systems. Their track record involves managing significant budgets and large teams, indicating a capacity to handle contracts of this nature. However, like any large contractor, they have likely experienced both successes and challenges across their diverse contract base, which would require a deeper dive into individual contract performance reports and past performance evaluations for a comprehensive assessment.

How does the annual cost of this contract compare to industry benchmarks for similar IT support services?

The annual cost for this contract averages approximately $11.16 million ($33.47 million / 3 years). Benchmarking this against industry standards for IT application support services requires considering factors such as the complexity of the applications, the level of support required (e.g., 24/7 vs. business hours), the number of users supported, and the specific technologies involved. For large-scale enterprise applications within a defense context, this annual figure can be considered within a reasonable range. Major IT service providers often charge significant amounts for comprehensive support, maintenance, and sustainment of complex systems. Without specific details on the applications and service levels, a precise comparison is difficult, but the annual spend does not immediately appear exorbitant for a contract of this nature within the federal sector, especially given the firm fixed-price structure which implies defined deliverables and scope.

What are the primary risks associated with a sole bid received under full and open competition?

The primary risks associated with receiving only one bid under a full and open competition are related to price discovery and potential lack of innovation. Firstly, without competing offers, the government loses the opportunity to leverage competitive pressures to drive down prices. The single bidder may not feel compelled to offer their most aggressive pricing, potentially leading to a higher cost for taxpayers. Secondly, the lack of competition can stifle innovation. When multiple vendors vie for a contract, they often propose unique solutions or efficiencies to win the business. With only one bidder, there's less incentive for the contractor to go above and beyond standard service offerings or to propose cost-saving innovations. This situation can also indicate potential market failures or barriers to entry that warrant further investigation by the agency.

What is the historical spending pattern for application support services within the Department of the Army?

Historical spending on application support services within the Department of the Army is substantial and has been a consistent area of investment. The Army relies heavily on a vast array of software applications to manage everything from logistics and personnel to intelligence and operations. Over the years, spending in this category has evolved, reflecting shifts towards modernization, cloud adoption, and cybersecurity enhancements. While specific historical figures for this exact contract type are not provided, the Army's overall IT budget runs into the billions of dollars annually, a significant portion of which is allocated to sustainment, maintenance, and support of existing applications, as well as the development and integration of new ones. Trends often show an increasing emphasis on integrated systems and data management, requiring robust application support.

How does the firm fixed-price (FFP) contract type impact the government's risk exposure?

The Firm Fixed-Price (FFP) contract type significantly reduces the government's financial risk exposure compared to other contract types like cost-plus. Under an FFP contract, the contractor agrees to a set price for a defined scope of work, regardless of the actual costs incurred. This means the contractor assumes the primary risk for cost overruns. For the government, this provides budget certainty and predictability, as the total cost is known upfront. The main risk for the government shifts from financial to performance-based; ensuring the contractor delivers the specified goods or services to the required quality standards. If the contractor encounters unforeseen difficulties or incurs higher-than-expected costs, they must absorb those additional expenses, which can incentivize efficiency but may also lead to potential disputes or performance issues if the contractor cuts corners.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related 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: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 3150 FAIRVIEW PARK DR, FALLS CHURCH, VA, 22042

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

Financial Breakdown

Contract Ceiling: $33,473,417

Exercised Options: $33,473,417

Current Obligation: $33,473,417

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $4,154,629

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS35F080CA

IDV Type: FSS

Timeline