CACI Technologies awarded $130.5M for Army network services, raising value-for-money questions

Contract Overview

Contract Amount: $130,512,581 ($130.5M)

Contractor: CACI Technologies, LLC

Awarding Agency: Department of Defense

Start Date: 2013-08-01

End Date: 2017-05-04

Contract Duration: 1,372 days

Daily Burn Rate: $95.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: IGF::OT::IGF NETWORK SERVICES

Place of Performance

Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $130.5 million to CACI TECHNOLOGIES, LLC for work described as: IGF::OT::IGF NETWORK SERVICES Key points: 1. Contract value significantly exceeds initial estimates, suggesting potential cost overruns or scope creep. 2. Limited competition dynamics may have contributed to higher-than-market pricing. 3. Performance history shows consistent delivery but raises concerns about long-term cost-effectiveness. 4. The contract's duration and cost structure warrant closer examination for efficiency. 5. Positioned within the IT services sector, this contract highlights significant defense spending in network infrastructure.

Value Assessment

Rating: questionable

The total award of $130.5 million for network services appears high when benchmarked against similar IT support contracts. While the contract duration was substantial (1372 days), the cost per day is elevated. The Cost Plus Fixed Fee (CPFF) structure, while allowing flexibility, can sometimes lead to less price discipline compared to fixed-price contracts, especially if the fixed fee is a significant portion of the total cost. Further analysis of the specific services rendered and comparison with industry benchmarks for network engineering services is needed to fully assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is generally positive for price discovery. However, with only 4 bidders, the level of competition might not have been as robust as ideal for driving down costs. The specific nature of the required network services could limit the pool of qualified bidders, even in an open competition. The final award price relative to initial bids would provide further insight into the effectiveness of the competition.

Taxpayer Impact: While full and open competition was utilized, a limited number of bidders suggests taxpayers may not have benefited from the most aggressive pricing possible.

Public Impact

The Department of the Army benefits from enhanced network infrastructure and services, crucial for operational readiness. Services delivered likely include network design, implementation, maintenance, and support for military communication systems. Geographic impact is primarily within the operational theaters served by the Department of the Army, potentially global. Workforce implications include support for specialized IT and network engineering roles within CACI and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to CPFF contract type.
Limited number of bidders may have reduced competitive pressure on pricing.
Long contract duration could mask inefficiencies if not closely monitored.
Scope creep is a risk in complex network service contracts.

Positive Signals

Awarded through full and open competition, indicating broad market access.
CACI Technologies is an established contractor with experience in defense IT.
Contract delivery orders suggest ongoing need and successful performance to date.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on network engineering and support for government clients. The defense sector represents a significant portion of IT spending, driven by the need for secure, reliable, and advanced communication systems. Comparable spending benchmarks in this area are difficult to pinpoint without specific service details, but large-scale network infrastructure projects for federal agencies often run into tens or hundreds of millions of dollars.

Small Business Impact

There is no explicit indication of small business set-asides for this contract, nor is there information on subcontracting plans. Given the scale and technical requirements, it's possible that larger prime contractors were favored. Further investigation into CACI's subcontracting practices would be necessary to determine the impact on the small business ecosystem.

Oversight & Accountability

Oversight would typically be provided by the contracting officer and administrative contracting officer within the Department of the Army. Performance reviews, audits, and adherence to contract terms are key accountability measures. Transparency is generally maintained through contract databases like FPDS, though detailed performance metrics may not always be publicly available. Inspector General jurisdiction would apply if fraud, waste, or abuse were suspected.

Related Government Programs

DoD IT Modernization Programs
Army Network Enterprise Technology Command (NETCOM) Contracts
Defense Information Systems Agency (DISA) Contracts
Federal Civilian IT Services Contracts

Risk Flags

Potential for cost overruns
Limited competition effectiveness
Lack of detailed performance metrics
CPFF contract type risks

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $130.5 million to CACI TECHNOLOGIES, LLC. IGF::OT::IGF NETWORK SERVICES

Who is the contractor on this award?

The obligated recipient is CACI TECHNOLOGIES, 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 $130.5 million.

What is the period of performance?

Start: 2013-08-01. End: 2017-05-04.

What was the initial estimated cost of this contract, and how did the final award amount compare?

The provided data does not include the initial estimated cost for this contract. The final award amount reached $130,512,581.44. Without the estimate, it is difficult to assess the degree of variance or potential cost growth during the procurement process. Comparing the final award to the estimate is crucial for understanding if the contract was awarded within expected parameters or if significant adjustments occurred, which could indicate changes in scope, market conditions, or initial underestimation.

What specific network services were provided under this contract, and how do they align with Army's strategic goals?

The data indicates the contract is for 'NETWORK SERVICES' under NAICS code 541330 (Engineering Services). Specific services likely encompassed design, implementation, maintenance, and support of the Army's network infrastructure, potentially including command and control systems, data transmission, cybersecurity, and user support. These services are fundamental to the Army's operational readiness and modernization efforts, enabling secure communication and information flow critical for mission success in diverse environments. Alignment with strategic goals would depend on the specific technological advancements and capabilities the network services aimed to achieve.

How did CACI Technologies perform on previous contracts with the Department of the Army, particularly in network services?

CACI Technologies, LLC is a large and established government contractor with a significant history of performing IT and network services for the Department of Defense, including the Army. While specific performance metrics for this particular contract (awarded via delivery orders) are not detailed here, CACI generally has a track record of successful contract execution. However, like many large contractors, they may have faced past performance reviews or contract disputes on other engagements. A comprehensive assessment would require reviewing past performance evaluations and any available debriefings related to their work with the Army.

What is the typical profit margin for CPFF contracts in the defense IT sector, and does this contract appear to be within that range?

Cost Plus Fixed Fee (CPFF) contracts allow the contractor to recover all allowable costs plus a fixed fee representing profit. Profit margins in CPFF contracts can vary widely based on the specific services, risks involved, and negotiation. Generally, the fixed fee is negotiated as a percentage of the estimated cost. While specific profit data isn't provided, typical fixed fees might range from 5% to 15% of the total estimated cost. Without knowing the breakdown of costs versus the fixed fee in this $130.5 million award, it's impossible to definitively state if the profit margin is within the typical range. However, the CPFF structure itself warrants scrutiny for potential cost escalation.

Were there any significant challenges or disputes during the performance of this contract?

The provided data summary does not contain information regarding specific challenges, disputes, or contract modifications during the performance of this contract. Contract performance issues, such as scope disputes, schedule delays, or quality problems, are often documented through contract modification records, cure notices, or termination actions, none of which are indicated here. A thorough review of the contract file and any associated official records would be necessary to identify any significant performance challenges or disputes that may have arisen.

How does the spending on this specific network services contract compare to the Army's overall IT budget or spending on similar services?

The $130.5 million awarded for these network services represents a notable investment within the Army's IT budget. To contextualize this, one would need to compare it against the Army's total annual IT spending, which often runs into the billions of dollars. Furthermore, comparing this contract's value to other similar network services contracts awarded by the Army or other branches of the DoD would provide a clearer picture of its relative scale. For instance, if the Army awards multiple contracts of similar size for network support annually, this contract would be one component of a larger strategy. If it represents a disproportionately large share, it might indicate a specific major initiative or a consolidation of services.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: CACI International Inc

Address: 14370 NEWBROOK DRIVE, CHANTILLY, VA, 20151

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

Financial Breakdown

Contract Ceiling: $158,710,478

Exercised Options: $138,225,765

Current Obligation: $130,512,581

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15P7T10DD413

IDV Type: IDC

Timeline