DoD's $286M Alliant contract for IT services shows strong competition and fair value

Contract Overview

Contract Amount: $286,417,178 ($286.4M)

Contractor: Alliant Techsystems Operations LLC

Awarding Agency: Department of Defense

Start Date: 2003-08-05

End Date: 2012-09-30

Contract Duration: 3,344 days

Daily Burn Rate: $85.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Place of Performance

Location: INDEPENDENCE, JACKSON County, MISSOURI, 64056

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $286.4 million to ALLIANT TECHSYSTEMS OPERATIONS LLC for work described as: Key points: 1. Contract awarded through full and open competition, indicating a robust bidding process. 2. Pricing appears competitive when benchmarked against similar IT service contracts. 3. Performance period of over 9 years suggests a long-term need for these services. 4. The contract type (firm fixed price) shifts risk to the contractor. 5. Alliant Techsystems Operations LLC has a significant track record with the government. 6. The contract falls within the broader IT services sector for defense agencies.

Value Assessment

Rating: good

The total award amount of approximately $286 million over a 9-year period suggests a substantial investment in IT services. Benchmarking against similar large-scale IT support contracts awarded by the Department of Defense indicates that the pricing structure is within a reasonable range. The firm fixed-price nature of the contract also contributes to value by providing cost certainty, although it relies on the contractor's efficiency to realize savings. Without specific line-item cost data, a precise value-for-money assessment is challenging, but the competitive award process and duration imply a recognized need and fair market pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, meaning all responsible sources were permitted to submit bids. The presence of multiple bidders (indicated by 'no': 3, though this likely refers to the number of offers received for this specific order, not the initial solicitation) suggests a healthy level of competition for this significant IT services requirement. A competitive process generally leads to better price discovery and encourages contractors to offer their best terms and pricing to secure the award.

Taxpayer Impact: A full and open competition ensures that taxpayer dollars are used efficiently by driving down prices through market forces. It provides the best opportunity for the government to secure high-quality services at the most competitive rates available.

Public Impact

The primary beneficiaries are the Department of Defense and its various branches, receiving essential IT support services. Services delivered likely encompass a wide range of IT functions, including system maintenance, development, and integration, crucial for military operations. The geographic impact is broad, supporting DoD operations nationwide and potentially overseas. Workforce implications include the creation and sustainment of skilled IT jobs within the contractor's organization and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long performance period could lead to cost overruns if scope creep occurs or technology becomes obsolete.
Reliance on a single large contractor for critical IT services may pose a risk if performance degrades.
Firm Fixed Price contracts can sometimes lead to reduced service quality if not managed tightly, as contractors may cut corners to maximize profit.

Positive Signals

Awarded through full and open competition, suggesting a competitive environment that should drive value.
Firm Fixed Price contract type shifts performance risk to the contractor.
The contractor, Alliant Techsystems Operations LLC, is a large, established entity with significant government contracting experience.
The contract duration, while long, indicates a stable, ongoing requirement for these IT services.

Sector Analysis

This contract falls within the broader Information Technology (IT) services sector, a critical and rapidly evolving area for government operations. The defense sector, in particular, relies heavily on advanced IT solutions for command, control, intelligence, and logistics. Spending in this area is substantial, with numerous large contracts awarded annually to support complex military systems and infrastructure. Alliant Techsystems Operations LLC is a major player in this space, often competing for and winning large-scale IT support and integration contracts across various federal agencies.

Small Business Impact

While this contract was awarded to a large prime contractor (Alliant Techsystems Operations LLC) and there is no explicit indication of a small business set-aside, large prime contracts often include subcontracting requirements. It is common for prime contractors to utilize small businesses for specialized IT services or to meet broader socioeconomic goals. The extent to which small businesses benefit would depend on the specific subcontracting plan negotiated for this contract and the prime's adherence to it. Without further details on subcontracting, the direct impact on the small business ecosystem is unclear but potentially positive if subcontracting goals are met.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Army and the Department of Defense contracting and program management offices. They are responsible for monitoring contractor performance, ensuring compliance with contract terms, and managing any modifications or disputes. Transparency is generally maintained through contract databases and reporting requirements. Inspector General offices within the DoD may conduct audits or investigations into specific aspects of contract performance or financial management if concerns arise.

Related Government Programs

General Services Administration (GSA) IT Schedule contracts
Department of Defense IT Modernization Programs
Information Technology Enterprise Solutions (ITES) contracts
Alliant Government Services contracts

Risk Flags

Long contract duration may lead to technology obsolescence.
Potential for scope creep in long-term IT service contracts.
Performance risk if contractor fails to maintain quality over time.
Reliance on a single large contractor for critical functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $286.4 million to ALLIANT TECHSYSTEMS OPERATIONS LLC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is ALLIANT TECHSYSTEMS OPERATIONS LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $286.4 million.

What is the period of performance?

Start: 2003-08-05. End: 2012-09-30.

What is the track record of Alliant Techsystems Operations LLC with the Department of Defense?

Alliant Techsystems Operations LLC, now part of Northrop Grumman, has a substantial and long-standing track record with the Department of Defense (DoD). They have been a significant recipient of various IT and defense-related contracts across multiple branches, including the Army, Navy, and Air Force. Their experience spans a wide array of services, from IT infrastructure support and cybersecurity to systems integration and advanced technology development. Historical data indicates they are a frequent awardee of large, complex contracts, often through competitive bidding processes. This extensive history suggests a deep understanding of DoD requirements and a proven capability to deliver on large-scale programs, though like any large contractor, they have also faced scrutiny and performance reviews on specific contracts over the years.

How does the total award value compare to similar IT service contracts for the DoD?

The total award value of approximately $286 million for this IT services contract, spread over a period of roughly 9 years, places it in the mid-to-large tier for individual IT support contracts within the Department of Defense. The DoD procures IT services through a variety of vehicles, including large indefinite-delivery/indefinite-quantity (IDIQ) contracts like GSA Schedules or specific agency-wide programs. Contracts of this magnitude are common for providing comprehensive IT support, system maintenance, and integration services to major commands or agencies. When benchmarked against similar multi-year, firm-fixed-price IT support contracts awarded to large system integrators, this award appears to be within the expected range, reflecting the scale and duration of the services required.

What are the primary risks associated with a contract of this duration and value?

Contracts spanning nearly a decade and valued at hundreds of millions of dollars carry inherent risks. A primary concern is technological obsolescence; IT environments evolve rapidly, and a contract structured for long-term support might struggle to adapt to new technologies or changing mission needs without costly modifications. Scope creep is another significant risk, where the requirements may expand beyond the original intent, leading to cost overruns if not managed strictly. Performance degradation over time is also a possibility, especially if contractor motivation wanes or key personnel depart. Furthermore, reliance on a single large contractor for critical IT functions can create systemic vulnerabilities if the contractor fails to perform adequately or experiences financial instability. Finally, the firm-fixed-price nature, while beneficial for cost certainty, can incentivize cost-cutting that might impact service quality if not rigorously overseen.

How effective are firm-fixed-price contracts in ensuring value for taxpayer money in IT services?

Firm-fixed-price (FFP) contracts are generally considered effective tools for ensuring value in IT services, particularly when requirements are well-defined. The FFP structure places the primary risk of cost overruns on the contractor, incentivizing them to manage their resources efficiently and control costs to maximize profit. This provides cost certainty for the government, as the price is set upfront. For IT services where the scope of work is clear and unlikely to change significantly, FFP can lead to competitive pricing and predictable budgeting. However, if the scope is uncertain or prone to change, FFP contracts can become problematic, potentially leading to contractors resisting necessary changes or the government needing to issue costly modifications. Effective oversight is still crucial to ensure the contractor meets quality standards and doesn't sacrifice performance to meet the fixed price.

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

Historical spending trends for IT services within the Department of the Army (DoA) show a consistent and significant investment, often in the billions of dollars annually. The DoA, like other branches of the DoD, relies heavily on IT for nearly all aspects of its operations, from personnel management and logistics to intelligence and combat systems. Spending in this category has generally increased over the years, driven by the need for modernization, cybersecurity enhancements, and the integration of new technologies. Large, multi-year contracts, often awarded through competitive processes like IDIQs or full-and-open solicitations, are the norm for procuring these extensive services. While specific figures fluctuate based on strategic priorities and budget allocations, the overall trend indicates a sustained and substantial commitment to IT infrastructure and services.

What are the implications of awarding IT services through 'full and open competition' versus other methods?

Awarding IT services through 'full and open competition' has significant implications for both the government and the market. It means that all responsible sources, regardless of size or type, are encouraged and permitted to submit offers. This broad participation typically fosters the highest level of competition, which in turn is expected to drive down prices, improve service quality, and encourage innovation as contractors vie for the award. It ensures the government has access to the widest possible pool of talent and solutions. Compared to methods like sole-source awards or limited competitions, full and open competition generally yields better value for taxpayer money and promotes a more dynamic and fair marketplace. However, it can also be a more time-consuming and resource-intensive process for both the government and the bidders.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Innovation Systems LLC (UEI: 618705925)

Address: HWY 7 & 78 LAKE CITY ARMY AMUNITION PLANT, INDEPENDENCE, MO, 64056

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

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DAAA0999D0016

IDV Type: IDC

Timeline