DoD's $75.9M contract for Army personnel system sustainment awarded to CACI, Inc. without competition

Contract Overview

Contract Amount: $75,890,729 ($75.9M)

Contractor: CACI, Inc. - Federal

Awarding Agency: Department of Defense

Start Date: 2024-12-20

End Date: 2026-04-08

Contract Duration: 474 days

Daily Burn Rate: $160.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: INTEGRATED PERSONNEL AND PAY SYSTEM-ARMY TOTAL SOLUTION TO SUSTAIN SYSTEM BASELINE/PERFORM ENVIRONMENT MANAGEMENT, SYSTEMS ENGINEERING/BUILD SUPPORT, SOLUTION INTEGRATION/RELEASE MANAGEMENT, PLATFORM/SOFTWARE MIGRATION, AND TRANSITION FUNCTIONALITY.

Place of Performance

Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $75.9 million to CACI, INC. - FEDERAL for work described as: INTEGRATED PERSONNEL AND PAY SYSTEM-ARMY TOTAL SOLUTION TO SUSTAIN SYSTEM BASELINE/PERFORM ENVIRONMENT MANAGEMENT, SYSTEMS ENGINEERING/BUILD SUPPORT, SOLUTION INTEGRATION/RELEASE MANAGEMENT, PLATFORM/SOFTWARE MIGRATION, AND TRANSITION FUNCTIONALITY. Key points: 1. The contract focuses on sustaining the Integrated Personnel and Pay System-Army (IPPS-A), a critical system for personnel management. 2. Awarded as a definitive contract, it covers environment management, systems engineering, integration, and migration functionalities. 3. The contract's duration extends over 474 days, indicating a significant period of sustainment and development. 4. The absence of competition raises questions about potential cost efficiencies and market-driven pricing. 5. The contract's value is substantial, reflecting the complexity and importance of the IPPS-A system. 6. Performance is based in Virginia, suggesting a concentration of IT services within that region for this contract.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without comparable sole-source awards for similar large-scale personnel system sustainment. The Cost Plus Fixed Fee (CPFF) contract type, while allowing for flexibility, can sometimes lead to higher costs if not managed rigorously. The total value of $75.9 million over approximately 1.5 years suggests a significant investment in maintaining and evolving a core defense system. Further analysis would require understanding the specific scope of work and the contractor's historical performance on similar projects to assess true value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities, proprietary technology, or when urgency dictates a rapid award. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices through market forces. It is important to understand the justification for this sole-source award to ensure it was appropriate and that the government negotiated the best possible terms.

Taxpayer Impact: Taxpayers may not have received the most competitive pricing due to the absence of a bidding process. This could potentially lead to higher overall costs for the sustainment of the IPPS-A system compared to a fully competed contract.

Public Impact

The primary beneficiaries are the U.S. Army personnel who rely on the IPPS-A system for accurate and timely pay, benefits, and personnel management. The contract delivers essential IT services including system sustainment, environment management, systems engineering, and solution integration. The geographic impact is primarily within the Department of Defense, supporting Army operations nationwide and potentially overseas. Workforce implications include the continued employment of IT professionals by CACI, Inc. to support the IPPS-A system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Cost Plus Fixed Fee (CPFF) contract type can incentivize cost overruns if not closely monitored.
Lack of transparency in the sole-source justification requires scrutiny to ensure necessity.
Dependence on a single contractor for critical system sustainment poses a long-term risk.
The significant value of the contract warrants robust oversight to ensure performance and cost control.

Positive Signals

Award to an established contractor (CACI) suggests a level of trust and familiarity with the system.
The contract aims to sustain a critical personnel system, ensuring operational continuity for the Army.
Defined period of performance provides a clear timeline for expected services.
The contract includes a broad range of essential IT support functions, indicating comprehensive sustainment.

Sector Analysis

The IT services sector, particularly custom computer programming and systems integration, is a significant area of federal spending. This contract falls within the broader category of defense IT modernization and sustainment. The market for large-scale enterprise resource planning (ERP) system support, like IPPS-A, is often dominated by a few large contractors due to the complexity and security requirements. Comparable spending benchmarks for sustaining similar-sized defense personnel systems can vary widely based on system age, complexity, and the scope of required updates and maintenance.

Small Business Impact

This contract was not set aside for small businesses, nor does it indicate any specific subcontracting requirements for small businesses in the provided data. The award to a large prime contractor like CACI, Inc. suggests that the primary focus is on the prime's capabilities. While large contracts can sometimes trickle down opportunities to small businesses through subcontracting, the absence of explicit set-asides or reporting here means the direct impact on the small business ecosystem for this specific award is likely minimal unless CACI proactively engages small business subcontractors.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army and potentially the Department of Defense's Inspector General. Accountability measures are typically embedded within the contract terms, including performance metrics, reporting requirements, and payment schedules tied to deliverables. Transparency is often limited in sole-source awards, but the contract's existence and basic details are publicly available through federal procurement databases. The CPFF structure necessitates close financial oversight to manage costs effectively.

Related Government Programs

Integrated Personnel and Pay System-Army (IPPS-A)
Defense Civilian Personnel System (DCPS)
Army Human Resources Command IT Support Contracts
DoD Enterprise Resource Planning (ERP) Systems

Risk Flags

Sole-source award
Cost-reimbursable contract type (CPFF)
Critical system sustainment dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $75.9 million to CACI, INC. - FEDERAL. INTEGRATED PERSONNEL AND PAY SYSTEM-ARMY TOTAL SOLUTION TO SUSTAIN SYSTEM BASELINE/PERFORM ENVIRONMENT MANAGEMENT, SYSTEMS ENGINEERING/BUILD SUPPORT, SOLUTION INTEGRATION/RELEASE MANAGEMENT, PLATFORM/SOFTWARE MIGRATION, AND TRANSITION FUNCTIONALITY.

Who is the contractor on this award?

The obligated recipient is CACI, INC. - FEDERAL.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $75.9 million.

What is the period of performance?

Start: 2024-12-20. End: 2026-04-08.

What is the specific justification for awarding this contract on a sole-source basis to CACI, Inc.?

The provided data indicates the contract was 'NOT COMPETED' and awarded as a 'DEFINITIVE CONTRACT' to CACI, INC. - FEDERAL. While the specific justification for a sole-source award is not detailed in the abbreviated data, common reasons include the contractor possessing unique capabilities, proprietary technology, or an urgent need that precludes a competitive process. For a system like IPPS-A, it's possible CACI holds critical intellectual property or has unique expertise developed during prior phases of the system's lifecycle, making them the only viable option for sustainment. A full justification document would typically be required by federal acquisition regulations to detail these reasons.

How does the Cost Plus Fixed Fee (CPFF) pricing structure impact the overall cost-effectiveness of this contract?

The Cost Plus Fixed Fee (CPFF) contract type means the contractor (CACI) is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure can be beneficial when the scope of work is not precisely defined or is expected to evolve, offering flexibility. However, it also carries a risk of cost overruns, as the contractor is incentivized to incur costs to cover the fixed fee. Effective oversight by the government is crucial to scrutinize allowable costs and ensure the contractor operates efficiently. Without robust cost monitoring, CPFF contracts can become more expensive than fixed-price alternatives.

What are the key performance indicators (KPIs) or metrics used to evaluate CACI's performance under this contract?

The provided data does not specify the Key Performance Indicators (KPIs) or metrics for this contract. However, for a system sustainment contract like this, typical KPIs would likely include system uptime and availability, response times for issue resolution, successful deployment of updates and patches, adherence to security protocols, and timely completion of engineering and integration tasks. The contract's performance work statement (PWS) would detail these specific metrics and the government's methods for measuring CACI's performance. Regular performance reviews would assess adherence to these KPIs.

What is the historical spending trend for the sustainment of the IPPS-A system or similar Army personnel systems?

The provided data focuses on a single contract award and does not offer historical spending trends for IPPS-A sustainment. However, large-scale enterprise systems like IPPS-A typically require significant and ongoing investment for sustainment, upgrades, and operational support throughout their lifecycle. Historical spending on previous Army personnel systems (e.g., legacy HR systems) would likely show a pattern of substantial annual expenditures, often in the tens of millions of dollars, to maintain functionality, security, and adapt to evolving requirements. The $75.9 million value of this contract is indicative of the substantial resources needed for such critical systems.

What are the potential risks associated with relying on a single contractor for the sustainment of a critical system like IPPS-A?

Relying on a single contractor (CACI, Inc.) for the sustainment of a critical system like IPPS-A presents several risks. Firstly, there's a 'vendor lock-in' risk, where the government becomes heavily dependent on the incumbent, making it difficult and costly to switch providers in the future. This can reduce leverage in future negotiations. Secondly, a sole-source arrangement can stifle innovation, as the contractor may face less pressure to introduce cutting-edge solutions. Thirdly, if the contractor experiences financial difficulties, staffing issues, or strategic shifts, it could directly jeopardize the continuity and quality of support for IPPS-A. Finally, the lack of competition inherently removes the market discipline that drives competitive pricing and service improvements.

Industry Classification

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

Product/Service Code: IT AND TELECOM - PLATFORM

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: CACI International Inc

Address: 14370 NEWBROOK DR, CHANTILLY, VA, 20151

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

Financial Breakdown

Contract Ceiling: $106,768,046

Exercised Options: $75,890,729

Current Obligation: $75,890,729

Subaward Activity

Number of Subawards: 13

Total Subaward Amount: $60,873,998

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline