General Dynamics awarded $32.6M for IT services under HESC II, highlighting competition and potential value

Contract Overview

Contract Amount: $32,653,693 ($32.7M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: General Services Administration

Start Date: 2022-04-04

End Date: 2026-04-03

Contract Duration: 1,460 days

Daily Burn Rate: $22.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: HESC II TO AWARD

Place of Performance

Location: DURHAM, DURHAM County, NORTH CAROLINA, 27709

State: North Carolina Government Spending

Plain-Language Summary

General Services Administration obligated $32.7 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: HESC II TO AWARD Key points: 1. The contract leverages a competitive environment to secure IT services. 2. Pricing appears reasonable given the scope of computer systems design. 3. The fixed-fee structure provides cost certainty for the government. 4. This award is part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract vehicle. 5. The duration suggests a sustained need for these IT support services. 6. Performance will be monitored through delivery orders against the IDIQ.

Value Assessment

Rating: good

The contract's value of $32.6 million for computer systems design services appears competitive, especially considering it was awarded under a full and open competition. While specific per-unit costs are not detailed here, the fixed-fee structure suggests a degree of cost control. Benchmarking against similar IT services contracts awarded by GSA would provide further insight into value for money, but the competitive award process is a positive indicator.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit offers. The presence of two bidders suggests a moderate level of competition for this specific delivery order. A higher number of bidders typically leads to more aggressive pricing and a wider range of technical solutions, but two bidders still provide a basis for price discovery and selection.

Taxpayer Impact: A full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation, leading to better value for government spending.

Public Impact

Federal agencies requiring computer systems design and related services will benefit from the expertise provided. The contract supports the modernization and maintenance of IT infrastructure. Services are likely to be delivered across various federal agencies utilizing the GSA's IT schedule. The contract supports a workforce skilled in computer systems design and integration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if requirements are not clearly defined in subsequent delivery orders.
Reliance on a single contractor for a significant period could limit future flexibility.
The fixed-fee structure may disincentivize cost-saving innovations by the contractor.

Positive Signals

Awarded under a competitive IDIQ vehicle, suggesting pre-vetted capabilities and pricing.
The fixed-fee contract type provides cost predictability for the government.
The contract duration allows for sustained support and relationship building.
Delivery orders allow for task-specific requirements and oversight.

Sector Analysis

This contract falls within the Information Technology sector, specifically Computer Systems Design Services. The IT services market is vast and highly competitive, with significant government spending allocated to modernizing systems, cybersecurity, and cloud computing. GSA's IT schedule vehicles, like the one under which this award was made, are crucial for agencies to procure these services efficiently. Comparable spending benchmarks for similar IT design services can vary widely based on complexity and duration, but this award represents a moderate investment within the broader federal IT landscape.

Small Business Impact

This contract was not set aside for small businesses and the prime contractor, General Dynamics Information Technology, Inc., is a large business. There is no indication of specific small business subcontracting requirements tied to this delivery order. Therefore, the direct impact on the small business ecosystem is likely minimal, though large prime contractors often engage small businesses as subcontractors on larger IDIQ vehicles.

Oversight & Accountability

Oversight for this contract will be managed by the General Services Administration (GSA) through the Federal Acquisition Service. As a delivery order against an IDIQ contract, specific oversight will focus on the performance and deliverables outlined in each individual order. GSA's contracting officers and program managers are responsible for monitoring contractor performance, ensuring compliance with contract terms, and managing payments. Transparency is facilitated through contract award databases, though detailed performance metrics are typically internal.

Related Government Programs

HESC II IDIQ Contract
GSA IT Schedule
Computer Systems Design Services Contracts
Federal IT Modernization Programs

Risk Flags

Potential for cost overruns if not managed closely
Risk of scope creep impacting budget and timeline
Contractor performance variability

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $32.7 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. HESC II TO AWARD

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC..

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $32.7 million.

What is the period of performance?

Start: 2022-04-04. End: 2026-04-03.

What is the track record of General Dynamics Information Technology, Inc. with the federal government, particularly in IT services?

General Dynamics Information Technology, Inc. (GDIT) has a substantial and long-standing track record as a federal contractor, consistently securing large-value contracts across various agencies and service areas, including IT modernization, cybersecurity, cloud migration, and mission support. They are a recognized prime contractor on numerous IDIQ vehicles and have demonstrated capabilities in complex system design, integration, and sustainment. Historically, GDIT has managed significant IT portfolios for agencies like the Department of Defense, Department of Homeland Security, and civilian agencies. While their extensive experience suggests a high likelihood of successful performance, past performance reviews and any documented issues on previous contracts would provide a more granular assessment of their reliability and effectiveness in delivering IT services.

How does the $32.6 million award compare to other similar IT services contracts awarded by GSA?

The $32.6 million award for Computer Systems Design Services under the HESC II IDIQ is a moderate-sized contract within the broader federal IT services landscape. GSA awards numerous IT contracts, ranging from smaller, specialized task orders to multi-billion dollar IDIQ vehicles. For context, GSA's IT Schedule 70 (now IT Professional Services) has facilitated billions in IT procurements annually. Contracts for similar services, such as system design, integration, and IT support, can range from a few million to hundreds of millions of dollars, depending on the scope, duration, and complexity. This specific award appears to be a significant delivery order, reflecting a substantial but not exceptionally large investment for a multi-year IT services engagement.

What are the primary risks associated with this type of Cost Plus Fixed Fee (CPFF) contract for IT services?

Cost Plus Fixed Fee (CPFF) contracts, while offering cost certainty to the government on the fee, carry inherent risks. A primary risk is that the contractor may have less incentive to control costs, as their profit (the fee) is fixed regardless of the actual costs incurred. This can potentially lead to cost overruns if not managed diligently. Another risk is the potential for scope creep, where the defined scope of work expands without a corresponding adjustment to the fixed fee, potentially leading to disputes or the government receiving less value. Effective government oversight is crucial to monitor costs, manage scope, and ensure the contractor is performing efficiently to achieve the best value within the fixed fee.

How effective is the HESC II IDIQ vehicle in delivering value for money in IT services?

The HESC II (Homeland Security Enterprise Services) IDIQ vehicle is designed to streamline the procurement of IT services for the Department of Homeland Security and other federal agencies. Its effectiveness in delivering value for money is largely dependent on the initial competition used to establish the IDIQ contract and the subsequent competition for individual task orders. By establishing a pool of pre-qualified vendors and often using competitive processes for task orders, IDIQ vehicles can reduce procurement lead times and foster competition. The fact that this specific delivery order was awarded under full and open competition suggests a mechanism for price discovery. However, ongoing monitoring of task order pricing against benchmarks and overall program performance is necessary to confirm sustained value for money.

What are the historical spending patterns for Computer Systems Design Services by the General Services Administration?

The General Services Administration (GSA) is a major procurer of IT services, including Computer Systems Design Services, through various contract vehicles like its IT Schedules and IDIQ contracts. Historical spending data indicates a consistent and significant investment by GSA in this category, reflecting the ongoing need for federal agencies to design, develop, integrate, and maintain complex IT systems. Spending in this area has generally trended upwards over the years, driven by digital transformation initiatives, cybersecurity needs, and the retirement of legacy systems. GSA's role is to provide efficient procurement channels, and their spending reflects the demand from across the federal government for these critical IT capabilities.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 47QFCA22R0019

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

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: $89,481,881

Exercised Options: $62,775,520

Current Obligation: $32,653,693

Subaward Activity

Number of Subawards: 45

Total Subaward Amount: $33,014,706

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 47QTCK18D0003

IDV Type: GWAC

Timeline