DoD's $62.6M IT contract for billing and collections solution awarded to General Dynamics

Contract Overview

Contract Amount: $62,635,686 ($62.6M)

Contractor: General Dynamics ONE Source LLC

Awarding Agency: Department of Defense

Start Date: 2014-01-31

End Date: 2019-01-30

Contract Duration: 1,825 days

Daily Burn Rate: $34.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ARMED FORCED BILLING AND COLLECTIONS UTILIZATION SOLUTION

Place of Performance

Location: FAIRFAX, FAIRFAX County, VIRGINIA, 22030

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $62.6 million to GENERAL DYNAMICS ONE SOURCE LLC for work described as: ARMED FORCED BILLING AND COLLECTIONS UTILIZATION SOLUTION Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of 5 years (1825 days) indicates a long-term need for the services. 3. The fixed-price contract type aims to control costs for the government. 4. The primary service category is IT infrastructure, data processing, and web hosting. 5. The award was made by the Defense Health Agency, highlighting its importance to military healthcare operations. 6. The contract was awarded as a delivery order, suggesting it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract.

Value Assessment

Rating: good

The total award amount of $62.6 million over five years for an IT billing and collections solution appears reasonable given the scope and duration. Benchmarking against similar large-scale IT service contracts for federal agencies suggests that pricing is within expected ranges, especially considering the specialized nature of defense healthcare systems. The firm-fixed-price structure provides cost certainty, although the specific value-for-money depends on the performance and efficiency of the delivered solution.

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 two bidders suggests a moderate level of competition for this specific delivery order. While two bidders are better than one, a higher number of competitors could potentially drive prices down further and foster greater innovation.

Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging competitive pricing and potentially leading to better value. The fact that multiple companies vied for this contract suggests that taxpayer dollars were likely used efficiently.

Public Impact

Beneficiaries include the Department of Defense and its personnel, ensuring efficient processing of healthcare billing and collections. Services delivered include IT infrastructure, data processing, and web hosting critical for financial operations. The geographic impact is primarily within the Department of Defense's operational sphere, supporting its healthcare mission. Workforce implications may involve IT specialists and administrative personnel managing and utilizing the system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the solution becomes deeply integrated into DHA's operations.
Reliance on a single vendor for critical billing and collections infrastructure could pose a risk if the vendor faces financial or operational difficulties.

Positive Signals

Awarded through full and open competition, indicating a fair and transparent procurement process.
Firm-fixed-price contract type provides cost predictability for the government.
The Defense Health Agency's selection of this solution suggests it meets specific operational requirements.

Sector Analysis

The contract falls within the Information Technology sector, specifically focusing on computing infrastructure, data processing, and web hosting services. This is a critical area for government operations, particularly for large organizations like the Department of Defense. The market for these services is highly competitive, with numerous large and small businesses offering solutions. Comparable spending benchmarks for similar IT infrastructure and data processing contracts within the federal government can range from tens to hundreds of millions of dollars, depending on the scale and complexity of the services required.

Small Business Impact

The provided data does not indicate any specific small business set-aside or subcontracting requirements for this contract. As it was awarded under full and open competition, it's possible that small businesses could have participated as prime contractors or subcontractors if they met the qualifications. However, without explicit set-aside provisions, the direct impact on the small business ecosystem is not detailed in this award.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Defense Health Agency. Accountability measures are inherent in the firm-fixed-price contract, requiring the contractor to deliver specified services within the agreed budget. Transparency is generally maintained through federal procurement databases like FPDS-NG, where contract awards are reported. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Health Agency IT Services
DoD Financial Management Systems
Federal Cloud Computing Services
IT Infrastructure Support Contracts

Risk Flags

Potential for vendor lock-in
Cybersecurity risks associated with financial data
Dependence on contractor performance for critical functions

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $62.6 million to GENERAL DYNAMICS ONE SOURCE LLC. ARMED FORCED BILLING AND COLLECTIONS UTILIZATION SOLUTION

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS ONE SOURCE LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Health Agency).

What is the total obligated amount?

The obligated amount is $62.6 million.

What is the period of performance?

Start: 2014-01-31. End: 2019-01-30.

What is the track record of General Dynamics One Source LLC in delivering similar IT billing and collections solutions to the federal government?

General Dynamics One Source LLC, as a subsidiary or division of General Dynamics, has a significant history of providing IT services and solutions to various government agencies, including the Department of Defense. Their experience often encompasses large-scale IT infrastructure management, data processing, and support services. While specific details on their past performance on identical 'billing and collections utilization solutions' for the Armed Forces are not detailed in this award alone, their broader portfolio suggests a capability to handle complex IT projects. A deeper dive into their contract history, past performance reviews, and any relevant past performance questionnaires (PPQs) would provide a more comprehensive understanding of their track record for this specific type of service.

How does the per-unit cost or pricing structure of this contract compare to similar federal IT service contracts?

The provided data does not include detailed per-unit cost breakdowns, making a direct comparison difficult. However, the contract is a firm-fixed-price award totaling $62.6 million over five years. This structure implies that the contractor is responsible for delivering the defined services within this budget. To benchmark effectively, one would need to compare the scope of services (e.g., number of users supported, data volume processed, uptime guarantees) against similar IT infrastructure, data processing, and web hosting contracts awarded by other federal agencies. Without such detailed service metrics and comparable contract data, assessing the precise value-for-money on a per-unit basis is challenging. The fact that it was competitively bid suggests the pricing is likely within a reasonable market range.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks for this contract include potential vendor lock-in due to the specialized nature of billing and collections systems, performance issues leading to service disruptions, and cybersecurity threats to sensitive financial and healthcare data. Mitigation strategies likely involve robust Service Level Agreements (SLAs) within the contract, clear performance metrics, and regular performance reviews by the Defense Health Agency. Cybersecurity is a critical concern for any DoD contract, and adherence to stringent DoD security protocols and regular audits would be mandated. The firm-fixed-price nature also mitigates cost overrun risks for the government, shifting that risk to the contractor.

How effective has the Defense Health Agency been in managing similar IT contracts in the past?

The Defense Health Agency (DHA) manages a vast portfolio of IT contracts to support its mission of providing healthcare to service members and their families. Historically, the DHA has faced challenges and successes in managing complex IT systems, including electronic health records and administrative systems. Their effectiveness can be gauged by factors such as system uptime, data security, user satisfaction, and the ability to integrate new technologies. While specific performance metrics for this particular contract are not available, the DHA's ongoing operations rely heavily on the successful execution of numerous IT contracts, indicating a level of established expertise in managing such procurements, albeit with the inherent complexities of a large federal agency.

What is the historical spending pattern for IT billing and collections solutions within the Department of Defense or the Defense Health Agency?

Historical spending on IT solutions for billing and collections within the Department of Defense (DoD) and specifically the Defense Health Agency (DHA) is substantial, reflecting the complexity and scale of military healthcare operations. The DHA manages healthcare for millions of beneficiaries, requiring robust systems for financial management, claims processing, and revenue cycle management. Annual spending on IT infrastructure, software, and services supporting these functions can run into hundreds of millions or even billions of dollars across the DoD. This $62.6 million contract represents a portion of that overall investment, likely focused on a specific component or upgrade within the broader financial and administrative IT ecosystem.

Industry Classification

NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services

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: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 3211 JERMANTOWN ROAD, FAIRFAX, VA, 22030

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $62,871,845

Exercised Options: $62,635,686

Current Obligation: $62,635,686

Subaward Activity

Number of Subawards: 19

Total Subaward Amount: $2,036,540

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91QUZ12D0004

IDV Type: IDC

Timeline