DoD's $186.7M IT contract to General Dynamics Information Technology shows fair value with a competitive history

Contract Overview

Contract Amount: $186,715,404 ($186.7M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2006-09-26

End Date: 2012-09-30

Contract Duration: 2,196 days

Daily Burn Rate: $85.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE

Sector: IT

Official Description: ENTERPRISE OPERATIONS SUPPORT

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22204

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $186.7 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: ENTERPRISE OPERATIONS SUPPORT Key points: 1. Contract awarded through full and open competition, suggesting a competitive pricing environment. 2. Fixed Price Incentive contract type aims to balance cost control with performance incentives. 3. Long duration of 6 years indicates a significant, ongoing need for enterprise operations support. 4. Contractor has a substantial presence in IT services for the federal government. 5. Spending aligns with broader federal IT modernization and support initiatives. 6. Potential for cost savings through performance incentives within the contract structure.

Value Assessment

Rating: fair

Benchmarking this contract's value is challenging without specific performance metrics and detailed cost breakdowns. However, the fixed-price incentive structure suggests an attempt to manage costs while encouraging efficiency. The total value over six years averages approximately $31 million annually, which is within a reasonable range for large-scale enterprise IT support contracts of this nature, especially considering the complexity and scope typically involved in supporting Department of Defense operations. Further analysis would require comparing specific labor rates and overhead costs to industry standards.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors were likely invited to bid. This process generally fosters a competitive environment, driving down prices and encouraging innovation. The fact that it was a single award delivery order under a larger IDIQ contract suggests that General Dynamics Information Technology was selected as the best value provider among the competing entities. The level of competition at the IDIQ level, if known, would provide further insight into price discovery.

Taxpayer Impact: Full and open competition typically benefits taxpayers by ensuring that the government receives competitive pricing and the best available services, preventing potential overcharges associated with less competitive procurement methods.

Public Impact

Provides essential enterprise operations support services to the Department of the Army, a critical component of the DoD. Ensures the continuity and efficiency of IT systems that underpin military operations and administrative functions. Supports a significant workforce, likely including IT professionals and support staff, contributing to employment in the IT sector. Geographic impact is likely widespread, supporting Army installations and personnel across various locations. Enhances the operational readiness and technological capabilities of the U.S. Army.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to vendor lock-in if not managed carefully.
Fixed-price incentive contracts can sometimes lead to disputes over performance metrics and cost adjustments.
Reliance on a single contractor for critical enterprise operations support poses a risk if performance degrades.

Positive Signals

Awarded through full and open competition, indicating a robust selection process.
Fixed-price incentive structure encourages contractor performance and cost efficiency.
Contractor's established presence suggests experience and capability in delivering complex IT services.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on IT services and support. The federal IT services market is substantial, with agencies consistently investing in maintaining and upgrading their technological infrastructure. This contract represents a significant portion of spending within IT services, supporting the operational backbone of a major federal agency. Comparable spending benchmarks would include other large-scale IT support contracts awarded to major federal IT contractors by various government departments.

Small Business Impact

This contract was not set aside for small businesses, and the prime contractor, General Dynamics Information Technology, is a large business. There is no explicit information provided regarding small business subcontracting goals or performance. Large federal IT contracts often have subcontracting requirements, which can provide opportunities for small businesses. However, without specific details on subcontracting plans or actual utilization, the direct impact on the small business ecosystem remains unclear.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Army contracting officers and program managers. The contract type (Fixed Price Incentive) includes mechanisms for monitoring performance against established targets and adjusting profit based on outcomes. Transparency is generally facilitated through contract award databases like FPDS. Inspector General oversight may be involved if performance issues, fraud, or waste are identified.

Related Government Programs

DoD Enterprise IT Services
Army IT Infrastructure Support
Federal Civilian IT Services
Defense Information Systems Agency (DISA) Contracts
IT Professional Services

Risk Flags

Long contract duration may limit agility in adopting new technologies.
Fixed Price Incentive contracts require careful monitoring of performance metrics.
Potential for vendor lock-in due to the scale and duration of the support.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $186.7 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. ENTERPRISE OPERATIONS SUPPORT

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 $186.7 million.

What is the period of performance?

Start: 2006-09-26. End: 2012-09-30.

What is the track record of General Dynamics Information Technology (GDIT) in delivering similar enterprise operations support contracts to the Department of Defense?

General Dynamics Information Technology (GDIT) has a long and extensive track record of supporting the Department of Defense (DoD) and other federal agencies with enterprise operations support and a wide range of IT services. They are a major federal contractor known for handling complex, large-scale IT programs. Their experience spans areas such as network operations, cybersecurity, cloud computing, data center management, and end-user support. GDIT has consistently secured significant contracts across various military branches and defense agencies, demonstrating their capability to meet the demanding requirements of the DoD. Their past performance on similar contracts would have been a key factor in their selection for this particular award, indicating a level of trust and proven ability to deliver.

How does the average annual spending of approximately $31 million for this contract compare to similar enterprise IT support contracts within the DoD?

An average annual spending of approximately $31 million for enterprise IT support within the DoD is substantial but not uncommon for large-scale, long-term contracts. The DoD operates vast and complex IT infrastructures requiring significant investment. Contracts of this magnitude typically cover a broad scope of services, including network management, system maintenance, cybersecurity, help desk support, and potentially specialized application support for thousands of users across multiple locations. When compared to other major IT support contracts awarded by agencies like the Air Force, Navy, or other defense components, this figure aligns with the upper tier of spending for comprehensive enterprise support, reflecting the critical nature and extensive requirements of supporting military operations.

What are the primary risks associated with a Fixed Price Incentive (FPI) contract for enterprise operations support, and how are they mitigated?

The primary risks with an FPI contract for enterprise operations support include potential cost overruns if the contractor's estimates are inaccurate, and disputes over performance metrics used to determine incentive payments. For the government, there's a risk that the contractor might prioritize achieving incentive targets over optimal long-term system health or security if not carefully monitored. Mitigation strategies involve robust government oversight, clear and measurable performance standards (e.g., uptime, response times, security compliance), and well-defined target costs and ceiling prices. The government's ability to negotiate the final price based on performance is a key mitigation. Regular performance reviews and audits are crucial to ensure the contractor is meeting objectives and that costs are justified.

What is the historical spending trend for enterprise operations support within the Department of the Army over the past decade?

Historical spending trends for enterprise operations support within the Department of the Army (DoA) over the past decade have generally shown a consistent and significant investment in maintaining and modernizing its IT infrastructure. While specific figures fluctuate based on modernization initiatives, budget allocations, and evolving threats, the overall trend indicates a sustained need for robust IT support. Spending has likely seen increases related to cybersecurity enhancements, cloud migration efforts, and the integration of new technologies to support operational readiness. Conversely, efforts towards IT consolidation and efficiency may have moderated some growth. Overall, the DoA's IT budget remains a substantial portion of its overall expenditure, reflecting the critical role technology plays in modern military operations.

How does the contract's duration of 6 years impact the government's flexibility and potential for adopting new technologies?

A contract duration of 6 years, including potential options, provides stability and allows the contractor to make necessary investments in personnel and infrastructure. However, it can also limit the government's flexibility to rapidly adopt emerging technologies or switch to more innovative solutions if they become available mid-contract. To mitigate this, governments often include contract clauses that allow for modifications, scope adjustments, or early termination for convenience, albeit with potential costs. Furthermore, well-structured contracts can incorporate mechanisms for incorporating new technologies or services through change orders or supplemental agreements, ensuring the supported systems remain current, though this requires proactive management by the contracting agency.

Industry Classification

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

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE (L)

Contractor Details

Parent Company: Sterling Parent Inc.

Address: 4300 FAIR LAKES COURT, FAIRFAX, VA, 22033

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $221,026,889

Exercised Options: $186,715,404

Current Obligation: $186,715,404

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 26301D0050

IDV Type: IDC

Timeline