DoD's $22.2M IT services contract to General Dynamics Information Technology raises questions on competition and value

Contract Overview

Contract Amount: $22,214,676 ($22.2M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2014-06-01

End Date: 2015-05-31

Contract Duration: 364 days

Daily Burn Rate: $61.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::CT::IGF ENTERPRISE OPERATIONS

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22204

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $22.2 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: IGF::CT::IGF ENTERPRISE OPERATIONS Key points: 1. The contract was awarded on a sole-source basis, limiting competitive pressure on pricing. 2. The fixed-price contract type suggests a defined scope, but the lack of competition may have inflated costs. 3. Performance was rated as 'satisfactory' in the past, indicating a baseline level of service delivery. 4. The contract falls under IT services, a broad category with varying market rates. 5. The duration of the contract was one year, suggesting a need for ongoing IT support. 6. The small business status of the contractor is not applicable as it's a large firm.

Value Assessment

Rating: fair

The contract's value of $22.2 million for one year of IT services requires careful benchmarking. Without competitive bids, it's difficult to ascertain if the price reflects fair market value. The 'satisfactory' performance rating suggests the service met basic requirements, but doesn't necessarily indicate exceptional value for money. Comparing this to similar IT support contracts awarded competitively would be crucial for a definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, General Dynamics Information Technology, Inc., was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors vying for the contract. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities or urgent needs), they generally lead to less price discovery and potentially higher costs for the government.

Taxpayer Impact: The lack of competition means taxpayers may have paid a premium for these IT services, as there was no market pressure to drive down prices. This also limits opportunities for other capable vendors to secure government contracts.

Public Impact

The Department of the Army benefits from the provision of IT services essential for its operations. The contract supports 'Other Computer Related Services,' likely encompassing a range of IT support functions. The geographic impact is concentrated in Virginia, where the contractor is located and services are likely performed. The contract supports a workforce within General Dynamics Information Technology, contributing to employment in the IT sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have led to inflated pricing.
Sole-source award limits transparency in the procurement process.
Performance was only rated 'satisfactory,' not exceeding expectations.

Positive Signals

Fixed-price contract type can help control costs if scope is well-defined.
Contractor is a large, established IT services provider.
Services were delivered within the specified timeframe.

Sector Analysis

This contract falls within the broader Information Technology (IT) services sector, specifically 'Other Computer Related Services.' The IT services market is highly competitive, with numerous large and small businesses offering a wide array of solutions. The value of this contract, approximately $22.2 million, is moderate within the context of large federal IT procurements. Comparable spending benchmarks would typically involve analyzing other contracts for similar IT support services awarded to large system integrators.

Small Business Impact

This contract was not set aside for small businesses, and the awardee, General Dynamics Information Technology, Inc., is a large corporation. There is no indication of subcontracting plans for small businesses within the provided data. This means the contract did not directly contribute to the government's small business contracting goals through this specific award.

Oversight & Accountability

The provided data does not detail specific oversight mechanisms for this contract. However, federal contracts are generally subject to oversight by the contracting agency (Department of the Army), the Department of Defense's Inspector General, and potentially the Government Accountability Office (GAO). Transparency is limited by the sole-source nature of the award, making detailed public scrutiny of the procurement process challenging.

Related Government Programs

IT Support Services
Enterprise Operations
Computer Systems Design
Information Technology Professional Services

Risk Flags

Sole-source award
Potential for inflated pricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.2 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. IGF::CT::IGF ENTERPRISE OPERATIONS

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 $22.2 million.

What is the period of performance?

Start: 2014-06-01. End: 2015-05-31.

What is the track record of General Dynamics Information Technology, Inc. with the Department of Defense?

General Dynamics Information Technology, Inc. (GDIT) has a long-standing and extensive track record of providing IT services to the Department of Defense (DoD) and various other federal agencies. They are a major government contractor known for handling large-scale IT infrastructure, cybersecurity, cloud computing, and mission-critical systems. Their history with the DoD includes numerous contracts across different branches, often involving complex systems integration and support. While specific performance details for every contract vary, GDIT is generally recognized as a capable provider of IT solutions. However, like any large contractor, they have faced scrutiny on specific contracts regarding cost, performance, and competition.

How does the $22.2 million contract value compare to similar IT services contracts awarded by the DoD?

The $22.2 million contract value for one year of 'Other Computer Related Services' is a moderate-sized award within the DoD's IT spending portfolio. The DoD awards billions annually in IT contracts, ranging from small, specialized services to massive enterprise-wide solutions. A $22.2 million contract could represent significant support for a specific program, system, or operational unit. To provide a precise comparison, one would need to analyze contracts with similar scope (e.g., IT support, system maintenance, network services) and duration awarded to large businesses within the same fiscal year or recent periods. However, without competitive bidding, it's challenging to definitively state if this represents a market-competitive price point.

What are the primary risks associated with a sole-source IT services contract of this magnitude?

The primary risks associated with a sole-source IT services contract of this magnitude include potential cost overruns due to a lack of competitive pressure, reduced incentive for innovation from the contractor, and limited transparency in the procurement process. Taxpayers may bear a higher cost than if the contract had been competed. Furthermore, the government might miss out on potentially better solutions or more cost-effective services offered by other qualified vendors. There's also a risk of vendor lock-in, where the government becomes overly reliant on a single provider, making future transitions more difficult and expensive. Ensuring robust performance management and clear deliverables is critical to mitigate these risks.

How effective are fixed-price contracts in managing IT service delivery risks for the government?

Fixed-price contracts, like the one awarded to General Dynamics Information Technology, Inc., are generally effective in managing IT service delivery risks for the government when the scope of work is clearly defined and well-understood. The fixed price shifts the risk of cost overruns to the contractor, providing budget certainty for the government. This contract type incentivizes the contractor to control costs and manage resources efficiently to maintain profitability. However, if the scope is poorly defined or subject to frequent changes, it can lead to disputes, change orders, and potentially higher overall costs, negating some of the benefits. For IT services, a firm-fixed-price contract is often suitable for well-defined tasks like system maintenance or support, but less so for research and development or highly evolving requirements.

What does the 'Other Computer Related Services' classification imply about the scope of work?

The 'Other Computer Related Services' classification (NAICS code 541519) is a broad category that encompasses a wide range of IT services not specifically covered by more defined codes like custom software development, computer systems design, or data processing. This can include services such as IT consulting, IT support and troubleshooting, network management, IT project management, IT staffing, and potentially specialized technical support for hardware or software. The broadness of this classification suggests the contract likely covered a diverse set of IT needs for the Department of the Army, requiring flexibility from the contractor to address various operational requirements as they arose within the defined scope.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W9133L14Q0001

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Sterling Parent Inc.

Address: 4300 FAIR LAKES CT, 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: $22,214,676

Exercised Options: $22,214,676

Current Obligation: $22,214,676

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline