DoD's $166.6M ENCORE II IT contract awarded to General Dynamics IT shows mixed value and competition

Contract Overview

Contract Amount: $166,632,254 ($166.6M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2009-05-05

End Date: 2013-07-31

Contract Duration: 1,548 days

Daily Burn Rate: $107.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: R&D

Official Description: ENCORE II IT SOLUTIONS - FFP

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20310

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $166.6 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: ENCORE II IT SOLUTIONS - FFP Key points: 1. The contract's value proposition is fair, with a per-unit cost that appears reasonable given the scope. 2. Full and open competition was utilized, suggesting a robust bidding process. 3. Risk indicators are moderate, with a long performance period potentially increasing complexity. 4. The contract falls within the R&D sector, specifically focusing on physical and engineering sciences. 5. General Dynamics Information Technology, a large incumbent, secured this significant award. 6. The firm-fixed-price structure aims to control costs, but requires careful monitoring of scope creep.

Value Assessment

Rating: fair

The total award amount of $166.6 million over approximately 4 years suggests a substantial investment by the Department of Defense. Benchmarking against similar R&D contracts in physical and engineering sciences is challenging without more granular data on the specific services rendered. However, the firm-fixed-price (FFP) contract type indicates that the contractor bears the risk of cost overruns, which can be a positive indicator of value if the scope is well-defined. The number of bids received (3) is on the lower side for full and open competition, which might suggest some limitations in the initial outreach or the complexity of the requirements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. Three bids were received for this solicitation. While full and open competition is generally preferred for maximizing taxpayer value and fostering innovation, a lower number of bids can sometimes suggest that the requirements were highly specialized, the solicitation period was short, or potential bidders faced significant barriers to entry. This level of competition provides some assurance of price discovery but could potentially be improved with broader outreach.

Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it encourages multiple companies to vie for the contract, potentially driving down prices. However, with only three bidders, the competitive pressure might have been less intense than in scenarios with a larger number of offers.

Public Impact

The primary beneficiary is the Department of Defense, which receives research and development services. The contract supports advancements in physical, engineering, and life sciences, excluding biotechnology. The geographic impact is centered in the District of Columbia, where the contractor is located. Workforce implications include employment for technical and research personnel within General Dynamics Information Technology.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in long-term R&D projects, impacting final costs despite FFP.
Limited number of bidders (3) may indicate less competitive pressure than ideal for full and open.
The R&D nature of the contract introduces inherent uncertainty in outcomes and deliverables.
Long contract duration (1548 days) increases the risk of technological obsolescence or changing requirements.

Positive Signals

Firm-fixed-price contract type shifts cost overrun risk to the contractor.
Awarded under full and open competition, allowing for broad market participation.
General Dynamics Information Technology is an established contractor with significant experience.
The contract supports critical research and development for the Department of Defense.

Sector Analysis

This contract falls under the Research and Development in the Physical, Engineering, and Life Sciences sector, specifically NAICS code 541712. This sector is characterized by innovation and scientific advancement, often involving long-term projects with uncertain outcomes. The total federal spending in this broad R&D category can be in the billions annually, with significant portions allocated to defense-related research. This specific contract represents a portion of the DoD's investment in maintaining technological superiority through scientific exploration and engineering solutions.

Small Business Impact

This contract was not set aside for small businesses, and the awardee, General Dynamics Information Technology, is a large business. There is no explicit information provided regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless specific subcontracting opportunities arise during contract performance. Further investigation into subcontracting goals and achievements would be necessary to fully assess the impact on small businesses.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the contracting agency, the Defense Information Systems Agency (DISA), and potentially the Department of Defense's Inspector General. As a firm-fixed-price contract, oversight would focus on ensuring the contractor meets the defined scope, schedule, and performance requirements. Transparency is generally maintained through contract award databases and reporting requirements, though detailed performance metrics may not always be publicly accessible. The long duration necessitates ongoing monitoring to ensure continued relevance and effectiveness.

Related Government Programs

ENCORE II
Information Technology Services
Department of Defense Research and Development
General Dynamics IT Contracts

Risk Flags

Long contract duration increases risk.
Limited number of bidders for full and open competition.
R&D projects have inherent uncertainty.
Potential for scope creep despite FFP.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $166.6 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. ENCORE II IT SOLUTIONS - FFP

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 Information Systems Agency).

What is the total obligated amount?

The obligated amount is $166.6 million.

What is the period of performance?

Start: 2009-05-05. End: 2013-07-31.

What specific research and development activities were undertaken under this contract?

The provided data indicates the contract falls under NAICS code 541712, 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology).' However, the specific nature of the R&D activities is not detailed. Typically, contracts under this code could encompass a wide range of scientific and engineering endeavors, such as materials science research, advanced engineering design, simulation and modeling, prototype development, or testing and evaluation of new technologies relevant to national defense. Without access to the contract's statement of work or task orders, pinpointing the exact R&D focus remains speculative. Further analysis would require accessing contract-specific documentation beyond the basic award data.

How does the $166.6 million award compare to other R&D contracts of similar scope within the DoD?

Comparing this $166.6 million award to other DoD R&D contracts requires a broader dataset of similar procurements. The Department of Defense invests heavily in R&D across various scientific and engineering disciplines. Contracts of this magnitude are not uncommon for large-scale, multi-year research initiatives. However, the 'fair' value assessment suggests it is within a reasonable range. To provide a more precise comparison, one would need to analyze contracts with identical or highly similar NAICS codes, contract types (FFP), and performance durations. Factors like the specific technological area (e.g., aerospace, cybersecurity R&D, advanced manufacturing) and the number of bidders also influence cost benchmarks. Without such granular comparative data, this assessment remains general.

What are the primary risks associated with a 1548-day (approx. 4.25 years) firm-fixed-price R&D contract?

A significant risk with a long-duration, firm-fixed-price (FFP) R&D contract is the potential for scope creep or evolving requirements that may not be fully captured in the initial FFP agreement. While FFP shifts cost overrun risk to the contractor, if the government's needs change substantially, it can lead to contract modifications or disputes. For R&D, there's also the inherent risk of technical failure or the research not yielding the desired outcomes, which, under FFP, means the contractor may not recoup their investment if deliverables aren't met. Furthermore, technological advancements during the contract period could render the research obsolete before completion, impacting its ultimate value. Effective program management and clear communication channels are crucial to mitigate these risks.

What does the limited number of bidders (3) for a full and open competition imply for price discovery and innovation?

Receiving only three bids in a full and open competition can have mixed implications. On one hand, it suggests that the market may not have been as broad as anticipated, potentially due to highly specialized requirements, stringent pre-qualification criteria, or insufficient outreach. This limited pool might reduce the competitive pressure on pricing, potentially leading to less aggressive bids than if there were, say, five or more bidders. For taxpayers, this could mean a slightly higher price than might have been achieved in a more crowded field. Regarding innovation, while competition generally spurs innovation, a smaller number of bidders might indicate that only a few firms possessed the specific capabilities required, potentially limiting the diversity of innovative approaches considered.

How has General Dynamics Information Technology's performance been on similar large federal IT and R&D contracts?

General Dynamics Information Technology (GDIT), now part of General Dynamics, has a long history of performing large federal contracts across IT, defense, and R&D sectors. Their track record generally includes successful execution of complex programs, often involving significant IT infrastructure, systems integration, and specialized research. However, like many large federal contractors, GDIT has also faced scrutiny and occasional performance issues on specific contracts, which are often documented in contract performance databases (e.g., CPARS) and IG reports. A comprehensive assessment would require reviewing their performance history on contracts with similar scope, value, and agency, looking for patterns in on-time delivery, budget adherence, and quality of service. Without specific CPARS data for this ENCORE II task order, a definitive statement on past performance is limited.

What is the historical spending trend for NAICS code 541712 within the Department of Defense?

Historical spending within NAICS code 541712 (Research and Development in the Physical, Engineering, and Life Sciences) by the Department of Defense has consistently been substantial, reflecting the DoD's continuous need for technological advancement and innovation. While specific year-over-year figures fluctuate based on strategic priorities and budget allocations, this sector generally represents a significant portion of the DoD's overall R&D budget. Trends often show increased investment during periods of heightened geopolitical tension or rapid technological change. The DoD is typically one of the largest federal agencies awarding contracts under this code, driving significant market activity and funding numerous research institutions and private companies. Analyzing trends requires accessing historical federal procurement data (e.g., USAspending.gov) filtered by agency and NAICS code.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

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: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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: $166,632,254

Exercised Options: $166,632,254

Current Obligation: $166,632,254

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC102808D2026

IDV Type: IDC

Timeline