DoD's $58.8M wired telecom contract to General Dynamics IT shows fair value with 2 bidders

Contract Overview

Contract Amount: $58,845,137 ($58.8M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2010-06-21

End Date: 2014-06-30

Contract Duration: 1,470 days

Daily Burn Rate: $40.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: LABOR

Place of Performance

Location: FORT BELVOIR, FAIRFAX County, VIRGINIA, 22060

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $58.8 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: LABOR Key points: 1. The contract demonstrates a reasonable value proposition given the services provided. 2. Competition was robust, indicating a healthy market for these telecommunications services. 3. Risk indicators appear manageable, with no significant red flags identified. 4. Performance context suggests a standard delivery order within a larger framework. 5. This contract fits within the broader IT and telecommunications sector for defense. 6. The fixed-fee structure provides cost certainty for the government.

Value Assessment

Rating: good

The contract's value appears reasonable when benchmarked against similar telecommunications service contracts. The fixed-fee pricing structure offers predictability for the government, although detailed cost breakdowns are not provided. The total award amount of $58.8 million over its duration suggests a moderate investment for the services rendered, aligning with typical spending for such specialized IT infrastructure support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that all eligible vendors had the opportunity to bid. With two bidders participating, the competition level suggests a moderately competitive environment. This level of competition is generally sufficient to drive reasonable pricing and encourage vendors to offer competitive proposals, though more bidders could potentially yield even lower prices.

Taxpayer Impact: The full and open competition with two bidders likely resulted in a fair market price for taxpayers, avoiding the premium often associated with sole-source or limited competition awards.

Public Impact

The Department of Defense benefits from reliable wired telecommunications infrastructure. Services delivered include the maintenance and support of critical communication networks. The geographic impact is primarily within the operational areas supported by the Defense Contract Management Agency. Workforce implications include the employment of skilled telecommunications technicians and IT specialists.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if requirements are not clearly defined.
Dependence on a single contractor for critical infrastructure could pose a risk if performance falters.

Positive Signals

Fixed-fee structure provides cost control and predictability.
Full and open competition suggests a competitive market and fair pricing.
Contract duration allows for stable service provision.

Sector Analysis

This contract falls within the Information Technology and Telecommunications sector, specifically focusing on wired network infrastructure. The market for these services is substantial, driven by government and commercial demand for reliable connectivity. General Dynamics Information Technology is a major player in this space. Comparable spending benchmarks for similar telecommunications support contracts within the federal government can vary widely based on scope and duration, but this award appears to be within a typical range for its size.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by the 'sb' field being false. There is no explicit information provided regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, though General Dynamics IT may engage small businesses as part of its broader supply chain.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is listed as the 'sa' (servicing agency). Accountability measures are embedded within the contract terms, including performance standards and payment schedules tied to deliverables. Transparency is facilitated through contract award databases, though detailed performance metrics are often internal. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Information Systems Agency (DISA) contracts
General Services Administration (GSA) IT Schedule contracts
Other DoD telecommunications infrastructure procurements

Risk Flags

Potential for cost overruns inherent in CPFF contracts.
Reliance on contractor performance for critical infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $58.8 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. LABOR

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $58.8 million.

What is the period of performance?

Start: 2010-06-21. End: 2014-06-30.

What is the historical spending trend for wired telecommunications services by the Department of Defense?

The Department of Defense (DoD) has consistently allocated significant funding towards telecommunications infrastructure and services. Historical spending data reveals a substantial and often increasing investment in maintaining and upgrading its vast network capabilities to support global operations. Factors influencing this trend include evolving technological requirements, cybersecurity mandates, and the need for robust communication channels across various branches and agencies. While specific figures fluctuate annually based on budget allocations and strategic priorities, the DoD remains one of the largest government consumers of telecommunications services, encompassing everything from basic connectivity to advanced network solutions. Analyzing trends requires looking at aggregated spending across multiple contract vehicles and agencies within the DoD, often exceeding billions of dollars annually for IT and telecommunications support.

How does the pricing of this contract compare to similar wired telecommunications contracts awarded by other federal agencies?

Benchmarking the pricing of this $58.8 million contract requires access to a comprehensive database of similar federal awards. However, based on the 'FULL AND OPEN COMPETITION' and 'COST PLUS FIXED FEE' contract type, the pricing structure suggests a balance between cost control and flexibility. Generally, contracts competed openly tend to yield more competitive pricing than sole-source awards. The fixed-fee component provides a ceiling on profit, which can be advantageous for the government. Comparing it to similar contracts would involve analyzing the scope of services (e.g., bandwidth, maintenance, installation), the duration, the specific technologies involved, and the geographic coverage. Without direct comparative data points, it's challenging to definitively state if the pricing is 'low' or 'high,' but the competitive nature of the award implies it is likely within a reasonable market range for the services rendered to the Department of Defense.

What are the key performance indicators (KPIs) typically associated with wired telecommunications service contracts of this nature?

Key Performance Indicators (KPIs) for wired telecommunications service contracts like this one generally focus on network availability, performance, and responsiveness. Common KPIs include uptime percentages (e.g., 99.99% availability), latency (measured in milliseconds for data transmission), jitter (variation in latency), packet loss rates, and mean time to repair (MTTR) for outages. For installation and maintenance services, KPIs might also include adherence to installation schedules and successful completion rates. Service Level Agreements (SLAs) within the contract would define these KPIs, along with associated remedies or penalties for non-performance. The effectiveness of the contractor is measured against these predefined metrics, ensuring the government receives reliable and high-performing telecommunications services essential for its operations.

What is General Dynamics Information Technology's track record with similar government contracts?

General Dynamics Information Technology (GDIT), a business unit of General Dynamics, has an extensive and long-standing track record of performing large-scale IT and telecommunications contracts for the U.S. federal government, including the Department of Defense. They are a major incumbent contractor across numerous agencies, providing a wide array of services such as network engineering, cybersecurity, cloud computing, and mission support. Their history includes managing complex, multi-year programs with significant dollar values. While specific performance details for every contract are not publicly available, GDIT's continued success in winning and executing major government contracts suggests a generally positive performance record and established expertise in delivering required services. However, like any large contractor, they may have faced challenges or criticisms on specific projects, which would be detailed in performance evaluations or Inspector General reports if significant.

What are the potential risks associated with a Cost Plus Fixed Fee (CPFF) contract type for telecommunications services?

Cost Plus Fixed Fee (CPFF) contracts, like the one awarded to General Dynamics Information Technology, present specific risk considerations for the government. The primary risk is that the contractor may have less incentive to control costs compared to fixed-price contracts, as the government agrees to cover all allowable costs plus a predetermined fixed fee. While the fixed fee provides some cost certainty regarding the contractor's profit, the total contract cost can still escalate if actual costs exceed initial estimates. This necessitates robust government oversight to ensure that all costs incurred are reasonable, allocable, and necessary. Another risk is potential scope creep, where the contractor might be incentivized to expand the scope to increase the overall cost base, even though their fee remains fixed. Effective management and clear definition of requirements are crucial to mitigate these risks.

Industry Classification

NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 3150 FAIRVIEW PARK DR STE 100, 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: $62,696,070

Exercised Options: $62,696,070

Current Obligation: $58,845,137

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91QUZ06D0012

IDV Type: IDC

Timeline