DoD's $67.5M IT contract to General Dynamics Information Technology shows fair value despite limited competition

Contract Overview

Contract Amount: $67,497,066 ($67.5M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2009-08-26

End Date: 2013-08-23

Contract Duration: 1,458 days

Daily Burn Rate: $46.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IT SOLUTION SERVICES

Plain-Language Summary

Department of Defense obligated $67.5 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: IT SOLUTION SERVICES Key points: 1. Contract value represents a moderate investment in IT solutions for the Army. 2. Full and open competition was utilized, suggesting a broad search for qualified vendors. 3. The contract duration of nearly four years indicates a need for sustained IT services. 4. Fixed-price contract type helps mitigate cost overrun risks for the government. 5. The specific NAICS code points to a focus on telecommunications infrastructure. 6. No small business set-aside was applied, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: fair

The total contract value of $67.5 million over approximately four years averages to about $16.9 million annually. This figure appears reasonable for comprehensive IT solution services, especially considering the scope likely involves network infrastructure, maintenance, and support. Benchmarking against similar large-scale IT service contracts for defense agencies suggests this falls within a typical spending range. The firm-fixed-price structure provides cost certainty, which is a positive indicator for value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that the Department of the Army sought proposals from all responsible sources. While the specific number of bidders is not provided, this approach generally fosters a competitive environment. The intention is to ensure the government receives the best possible technical solutions and pricing by allowing a wide range of contractors to participate. The success of this competition in driving down costs would depend on the number and capability of the actual bidders.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it aims to secure competitive pricing and high-quality services by maximizing the pool of potential offerors.

Public Impact

The Department of the Army benefits from sustained and reliable IT infrastructure and telecommunications services. End-users within the Army receive improved connectivity and access to critical IT solutions. The contract supports the operational readiness and technological advancement of military communications. The geographic impact is likely widespread, supporting Army installations and operations across various locations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific bidder count makes it difficult to fully assess the intensity of competition.
No indication of performance metrics or quality evaluations within the provided data.
The duration of the contract could lead to vendor lock-in if not managed carefully.

Positive Signals

Firm-fixed-price contract type provides cost predictability.
Full and open competition suggests an effort to obtain best value.
The contract addresses a critical need for IT infrastructure services within the Department of Defense.

Sector Analysis

This contract falls within the Information Technology sector, specifically related to wired telecommunications carriers (NAICS 517110). This industry is characterized by significant investment in network infrastructure, maintenance, and support services. The market is often dominated by large, established players due to the capital-intensive nature of telecommunications. Spending in this area for government entities is crucial for maintaining secure and reliable communication networks, supporting everything from administrative functions to operational command and control. Comparable spending benchmarks would involve looking at other large-scale telecommunications service contracts awarded to major IT providers by federal agencies.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for them mentioned. This suggests that the primary award went to a large prime contractor, General Dynamics Information Technology. While large contracts can sometimes trickle down opportunities to small businesses through subcontracting, the absence of explicit set-asides or reporting requirements means the direct impact on the small business ecosystem is likely limited unless the prime contractor proactively engages them. Further investigation into subcontracting plans would be needed for a complete picture.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, which obligates the contractor to deliver specified services within the agreed budget. Transparency is generally facilitated through contract databases like FPDS, where basic award information is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected or reported.

Related Government Programs

Defense-wide IT Services
Army Network Modernization Programs
Telecommunications Infrastructure Contracts
Information Technology Support Services

Risk Flags

Potential for price to become uncompetitive over contract duration.
Lack of specific performance metrics in provided data.
Limited visibility into small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $67.5 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. IT SOLUTION 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 $67.5 million.

What is the period of performance?

Start: 2009-08-26. End: 2013-08-23.

What was the specific scope of 'IT SOLUTION SERVICES' provided under this contract?

The provided data indicates the NAICS code is 517110, which corresponds to 'Wired Telecommunications Carriers.' This suggests the 'IT SOLUTION SERVICES' likely encompassed a range of activities related to the installation, maintenance, operation, and management of wired telecommunications networks and infrastructure for the Department of the Army. This could include services such as circuit provisioning, network backbone management, data transmission services, and potentially the deployment and upkeep of related hardware and cabling. The contract's duration of nearly four years and its firm-fixed-price nature imply a need for ongoing, predictable service delivery critical to the Army's operational communications.

How does the $67.5 million contract value compare to similar IT service contracts awarded by the Department of Defense?

The $67.5 million total contract value for IT solution services over approximately four years places this award in the mid-to-large tier for individual task orders or delivery orders within the Department of Defense. While specific comparisons require detailed analysis of contract scope and duration, this amount is not unusual for comprehensive IT infrastructure and telecommunications support. Larger enterprise-wide IT contracts can reach hundreds of millions or even billions of dollars. However, for a specific set of services under a single award, $67.5 million represents a significant investment, suggesting a substantial requirement for General Dynamics Information Technology's capabilities.

What are the primary risks associated with a firm-fixed-price contract of this duration?

The primary risk with a firm-fixed-price (FFP) contract, especially one spanning nearly four years, is that the fixed price may become unrepresentative of actual costs or market rates over time. For the government, the risk is paying potentially above-market rates if costs decrease or competition intensifies later in the contract term. For the contractor, the risk is that costs escalate beyond projections, eroding profit margins, although FFP contracts generally shift cost risk to the contractor. Scope creep, if not managed through formal change orders, can also become a point of contention. Additionally, technological obsolescence could become a factor over a multi-year period if the services are tied to specific, non-evolving technologies.

What does the 'full and open competition' designation imply about the contractor selection process?

The 'full and open competition' designation signifies that the Department of the Army followed Federal Acquisition Regulation (FAR) Part 6 guidelines, meaning they solicited proposals from all responsible sources and provided full opportunity for such sources to submit offers. This is the preferred method of government procurement, intended to maximize competition and ensure the government obtains the best value. It implies that the agency did not restrict the competition to a pre-approved list of vendors or use other transaction authorities. While it doesn't guarantee a large number of bidders, it ensures that any capable company had the chance to compete for this significant IT services contract.

What is the historical spending trend for similar IT services within the Department of the Army?

Historical spending on IT services within the Department of the Army has consistently been substantial, reflecting the critical role of technology in modern military operations. Trends show a continuous demand for network infrastructure, cybersecurity, software development, and telecommunications support. While specific figures fluctuate based on evolving technological needs and budget allocations, the Army regularly awards multi-billion dollar contracts across various IT categories. Contracts like this one, focused on wired telecommunications, are part of a larger ecosystem of IT spending aimed at maintaining and upgrading the service's vast technological capabilities to ensure readiness and operational effectiveness.

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

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 3211 JERMANTOWN RD, FAIRFAX, VA, 22030

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

Financial Breakdown

Contract Ceiling: $67,497,066

Exercised Options: $67,497,066

Current Obligation: $67,497,066

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91QUZ06D0012

IDV Type: IDC

Timeline