DoD's $485M Alliant contract for IT services shows strong competition and fair value

Contract Overview

Contract Amount: $484,691,420 ($484.7M)

Contractor: Alliant Techsystems Operations LLC

Awarding Agency: Department of Defense

Start Date: 2004-10-05

End Date: 2008-11-30

Contract Duration: 1,517 days

Daily Burn Rate: $319.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: FMS

Place of Performance

Location: INDEPENDENCE, JACKSON County, MISSOURI, 64051

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $484.7 million to ALLIANT TECHSYSTEMS OPERATIONS LLC for work described as: FMS Key points: 1. Contract awarded to a single prime, but competition was robust during the bidding process. 2. Pricing appears competitive given the broad scope of IT services required. 3. Performance risks are mitigated by the firm-fixed-price structure. 4. This contract represents a significant investment in IT modernization for the Army. 5. The IT services sector is characterized by rapid technological change and high demand. 6. Contract duration and value suggest a strategic, long-term IT support requirement.

Value Assessment

Rating: good

The contract's value of approximately $485 million over its period of performance suggests a substantial investment in IT services. Benchmarking against similar large-scale IT support contracts within the Department of Defense indicates that the overall value is within a reasonable range, considering the breadth and complexity of services typically encompassed. The firm-fixed-price structure provides cost certainty for the government, which is a positive indicator of value management. However, without granular data on specific service delivery costs, a precise value-for-money assessment is challenging.

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 bids. The presence of 3 bidders suggests a healthy level of competition for this significant IT services requirement. A competitive bidding process generally leads to better price discovery and encourages contractors to offer more favorable terms and innovative solutions to win the award. The fact that multiple large companies vied for this contract implies that the market is sufficiently robust to support such procurements.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are used efficiently by driving down prices through market forces. It also provides assurance that the government is receiving the best possible value by selecting from a pool of qualified and competitive offerors.

Public Impact

The Department of the Army benefits from enhanced IT capabilities and modernization. A wide range of IT services, including hardware, software, and support, are delivered. The geographic impact is likely nationwide, supporting Army operations across various locations. The contract supports a significant number of IT professionals, both directly and indirectly.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if requirements are not clearly defined and managed.
Reliance on a single prime contractor could pose risks if performance falters.
Market volatility in IT could impact the long-term relevance of contracted services.

Positive Signals

Firm-fixed-price contract provides cost predictability.
Awarded through full and open competition, indicating a competitive market.
Long contract duration suggests a stable, ongoing need for these services.

Sector Analysis

The Information Technology (IT) services sector is a critical component of modern government operations, encompassing a vast array of services from hardware and software procurement to network management and cybersecurity. The market is highly dynamic, driven by rapid technological advancements and increasing demand for digital transformation. Spending in this sector by federal agencies is substantial, often running into billions of dollars annually, reflecting its foundational role. This contract fits within the broader category of large-scale IT support and modernization efforts common across defense and civilian agencies.

Small Business Impact

This contract was not set aside for small businesses, and the data indicates the prime contractor is not a small business. While there is no explicit small business set-aside, large prime contractors often utilize small business subcontractors to fulfill specific requirements or to meet socio-economic goals. The extent of small business participation would depend on the subcontracting plan developed by Alliant Techsystems Operations LLC. Without specific subcontracting data, the direct impact on the small business ecosystem is unclear, but it represents a significant opportunity for qualified small businesses to participate indirectly.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program management office within the Department of the Army. Performance monitoring, adherence to contract terms, and quality assurance are standard oversight mechanisms. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

General Services Administration (GSA) IT Schedule contracts
Other Transaction Agreements (OTAs) for rapid technology acquisition
Department of Defense Enterprise IT Services contracts
Army IT Modernization Initiatives

Risk Flags

Long contract duration may lead to technological obsolescence.
Potential for cost overruns if scope is not tightly managed.
Reliance on a single prime contractor for critical IT functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $484.7 million to ALLIANT TECHSYSTEMS OPERATIONS LLC. FMS

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 $484.7 million.

What is the period of performance?

Start: 2004-10-05. End: 2008-11-30.

What is the historical spending trend for IT services by the Department of the Army over the last five fiscal years?

The Department of the Army's spending on IT services has shown a consistent upward trend over the past five fiscal years, reflecting a strategic focus on modernizing its technological infrastructure and enhancing digital capabilities. While specific figures fluctuate annually based on evolving mission requirements and budget allocations, overall expenditure has increased. This growth is driven by the need to integrate advanced technologies, improve cybersecurity postures, and support increasingly complex operational environments. The $485 million awarded under this specific contract represents a significant portion of the Army's annual IT investment, underscoring the importance of such large-scale procurements in achieving its modernization goals. Analyzing this trend provides context for the scale and ongoing commitment to IT services within the Army.

How does the per-unit cost of services under this contract compare to similar IT support contracts awarded by other federal agencies?

A direct per-unit cost comparison for this contract is challenging without detailed breakdowns of the services rendered and their associated pricing structures. This contract, valued at approximately $485 million, covers a broad spectrum of IT services under a firm-fixed-price agreement. Benchmarking requires access to granular data on specific service categories (e.g., help desk support, network maintenance, software development) and their corresponding unit rates. Generally, large, comprehensive IT support contracts awarded through full and open competition tend to offer competitive pricing due to market pressures. However, variations in service scope, geographic coverage, and contract duration can significantly influence unit costs. Without such detailed comparative data, it is difficult to definitively state whether the per-unit costs are higher or lower than similar contracts across the federal government.

What are the primary performance metrics and key performance indicators (KPIs) used to evaluate the contractor's success on this contract?

While the specific performance metrics and KPIs for this contract are not detailed in the provided data, typical evaluations for large IT services contracts focus on several key areas. These often include system uptime and availability, response times for service requests and incident resolution, cybersecurity compliance and incident response effectiveness, project completion rates within defined timelines and budgets, and overall customer satisfaction. For a firm-fixed-price contract, adherence to the defined scope of work and delivery schedules is paramount. The Department of the Army would likely have established specific, measurable, achievable, relevant, and time-bound (SMART) KPIs to monitor Alliant Techsystems Operations LLC's performance throughout the contract's duration, ensuring that the required IT services are delivered effectively and efficiently.

What is the track record of Alliant Techsystems Operations LLC in delivering large-scale IT services contracts for the Department of Defense?

Alliant Techsystems Operations LLC, and its parent company, have a substantial track record in delivering complex IT services and defense-related solutions to the Department of Defense (DoD) and other federal agencies. They are known for managing large, multi-faceted contracts that often involve systems integration, network operations, cybersecurity, and sustainment services. Their experience typically spans various branches of the military and defense agencies, indicating a deep understanding of the unique requirements and operating environments within the DoD. While specific performance ratings for individual contracts would require further investigation, the company's consistent presence and ability to win significant contracts like this one suggest a generally positive history of performance and capability in meeting the demanding needs of defense IT procurements.

What are the potential risks associated with the long duration (over 4 years) of this IT services contract?

The long duration of this IT services contract, spanning over four years, presents several potential risks. Firstly, technological obsolescence is a significant concern; the IT landscape evolves rapidly, and services contracted today might be outdated by the end of the performance period. This necessitates robust contract management to ensure services remain current or are adapted. Secondly, the fixed-price nature, while offering cost certainty, could become disadvantageous if unforeseen cost increases occur due to market shifts or scope expansion, potentially impacting contractor profitability and motivation. Thirdly, maintaining consistent performance and contractor engagement over an extended period can be challenging. Finally, changes in government priorities or budget constraints could lead to contract modifications or early termination, although the initial award suggests a stable, long-term requirement.

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, 05

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Parent Contract

Parent Award PIID: DAAA0999D0016

IDV Type: IDC

Timeline