DoD's $168M CACI contract for staging server testing shows potential for cost overruns

Contract Overview

Contract Amount: $167,981,063 ($168.0M)

Contractor: CACI, Inc. - Federal

Awarding Agency: Department of Defense

Start Date: 2009-07-22

End Date: 2010-09-22

Contract Duration: 427 days

Daily Burn Rate: $393.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: R45 BETA BUILD 2 07.21.2009 TESTING ON THE 'STAGING" SERVER

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20851

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $168.0 million to CACI, INC. - FEDERAL for work described as: R45 BETA BUILD 2 07.21.2009 TESTING ON THE 'STAGING" SERVER Key points: 1. Contract awarded via full and open competition, suggesting a competitive market. 2. The contract's cost-plus-fixed-fee structure carries inherent risk of cost escalation. 3. Performance period of over a year indicates a substantial, ongoing service requirement. 4. The specific nature of 'staging server testing' suggests a critical IT infrastructure support role. 5. Awarded to a single contractor, CACI, Inc. - Federal, highlighting their specialized capabilities. 6. The contract's value is significant within the engineering services sector for IT support.

Value Assessment

Rating: questionable

Benchmarking the value of this specific contract is challenging without more granular data on the 'staging server testing' services provided. However, the cost-plus-fixed-fee (CPFF) pricing structure, while common for complex IT projects, introduces a risk of exceeding the initial estimated cost. The duration of the contract (over a year) and its substantial value suggest a significant undertaking. Without comparable contracts for similar IT testing services, it's difficult to definitively assess if the pricing is optimal or if there are opportunities for better value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit bids. This suggests a healthy competitive environment for the services required. The fact that it was competed implies that the agency sought the best possible offer. However, the number of bids received is not specified, which would provide further insight into the actual level of competition and its impact on price discovery.

Taxpayer Impact: A full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and better service quality.

Public Impact

The Department of Defense benefits from enhanced IT infrastructure reliability through rigorous staging server testing. This contract supports critical IT operations by ensuring the stability and functionality of 'staging' environments before deployment. The primary beneficiaries are the IT personnel and systems within the DoD that rely on a robust and secure digital infrastructure. Geographic impact is likely concentrated around the contractor's operational base and DoD facilities in Maryland. Workforce implications include employment opportunities for IT professionals, testers, and engineers within CACI, Inc. - Federal.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can lead to cost overruns if not managed diligently.
The specific nature of 'staging server testing' may require specialized expertise that limits the pool of potential bidders in future competitions.
The duration of the contract (over a year) could indicate a long-term reliance on this specific vendor, potentially reducing future competition.
Lack of detailed performance metrics makes it difficult to assess the true value and effectiveness of the services rendered.

Positive Signals

Awarded through full and open competition, indicating a commitment to market-based pricing.
The contract is with a known entity, CACI, Inc. - Federal, suggesting a degree of established capability.
The contract supports critical IT infrastructure, which is essential for national security operations.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting IT infrastructure. The market for IT support and testing services for government agencies is substantial and highly competitive. Comparable spending benchmarks would typically involve other large IT service contracts awarded to system integrators and IT support firms. The value of this contract, approximately $168 million, positions it as a significant award within this niche, reflecting the complexity and scale of DoD's IT testing requirements.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. Given the substantial value and specialized nature of the services, it is unlikely that this contract was exclusively set aside for small businesses. However, CACI, Inc. - Federal, as a large prime contractor, may engage small businesses as subcontractors to fulfill certain aspects of the contract, contributing to the broader small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures would be embedded within the contract's terms and conditions, including performance standards and reporting requirements. Transparency is facilitated through contract databases like FPDS, though detailed performance reports are often not publicly available. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

DoD IT Modernization Programs
Defense Information Systems Agency (DISA) Contracts
IT Services and Support Contracts
Software Development and Testing Services
Cloud Computing Infrastructure Support

Risk Flags

Cost-plus-fixed-fee pricing increases risk of cost overruns.
Long contract duration may lead to scope creep and reduced flexibility.
Specific nature of 'staging server testing' could limit future competition.
Lack of detailed performance metrics hinders value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $168.0 million to CACI, INC. - FEDERAL. R45 BETA BUILD 2 07.21.2009 TESTING ON THE 'STAGING" SERVER

Who is the contractor on this award?

The obligated recipient is CACI, INC. - FEDERAL.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $168.0 million.

What is the period of performance?

Start: 2009-07-22. End: 2010-09-22.

What is the specific nature of the 'staging server testing' performed under this contract, and how does it contribute to DoD's IT security and operational readiness?

The 'staging server testing' under this contract likely involves a comprehensive suite of activities designed to validate and verify IT systems and software in a pre-production environment that closely mirrors the live operational environment. This includes functional testing, performance testing, security vulnerability assessments, integration testing, and user acceptance testing. The goal is to identify and rectify defects, ensure compatibility, and confirm that systems meet stringent security protocols before they are deployed to production. This process is critical for DoD's IT security and operational readiness by minimizing the risk of system failures, data breaches, and disruptions to critical missions that rely on robust and secure IT infrastructure. By catching issues early in the staging phase, the DoD can avoid costly and potentially mission-impacting problems in live environments.

How does the cost-plus-fixed-fee (CPFF) pricing structure for this contract potentially impact overall spending and contractor incentives?

The Cost-Plus-Fixed-Fee (CPFF) pricing structure means that the contractor, CACI, Inc. - Federal, is reimbursed for all allowable costs incurred during the performance of the contract, plus a predetermined fixed fee representing their profit. This structure is often used for research and development or complex services where the scope of work is not precisely defined at the outset, making it difficult to estimate costs accurately. While CPFF provides flexibility and ensures the contractor is compensated for unforeseen challenges, it carries a significant risk of cost overruns for the government. The contractor has less incentive to control costs aggressively because their profit (the fixed fee) is not directly tied to cost savings. Effective oversight and robust cost accounting controls by the government are crucial to manage spending and ensure that costs remain reasonable and allocable to the contract objectives.

What is CACI, Inc. - Federal's track record with similar large-scale IT support and testing contracts within the Department of Defense?

CACI, Inc. - Federal has a long-standing and extensive track record of providing IT support, engineering services, and complex solutions to the Department of Defense and other federal agencies. They are a major government contractor known for their capabilities in areas such as enterprise IT, cybersecurity, C4ISR, and data analytics. Historically, CACI has been awarded numerous large-value contracts for IT modernization, system integration, and operational support across various DoD branches. While specific performance details for individual contracts are often not publicly disclosed, their continued success in winning significant contracts suggests a generally positive performance history and a strong understanding of DoD requirements. However, like any large contractor, they may have faced scrutiny or performance challenges on specific projects, which would typically be managed through contract modifications or performance improvement plans.

How does the $168 million contract value compare to typical spending on IT testing and staging services within the DoD or similar large federal agencies?

The $168 million contract value for staging server testing is substantial and indicates a significant investment in ensuring the reliability and security of DoD's IT infrastructure. When compared to overall DoD IT spending, which runs into tens of billions of dollars annually, this contract represents a focused allocation towards a critical, albeit specialized, area. For large federal agencies, contracts of this magnitude for IT support and testing are not uncommon, especially when they involve complex systems, extensive testing cycles, and long-term support requirements. However, it is on the higher end for a contract solely dedicated to 'staging server testing,' suggesting either a very broad scope, a high degree of complexity, or a prolonged duration. Benchmarking against similar contracts would require detailed analysis of the specific services rendered, the number of systems tested, and the duration of the testing phases across different agencies.

What are the potential risks associated with the 427-day duration of this contract and its delivery order award type?

The 427-day duration (approximately 14 months) for this contract, awarded as a delivery order, suggests a substantial and ongoing need for the specified IT testing services. A key risk associated with a longer duration, especially under a CPFF structure, is the potential for scope creep and cost escalation if the requirements are not tightly managed. The delivery order mechanism itself implies that this contract may be part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle or a basic ordering agreement, allowing the agency to issue specific orders for services as needed. While this offers flexibility, it can also lead to fragmented oversight if not properly integrated. For taxpayers, the risk lies in the potential for inefficient resource allocation or prolonged spending if the services become less critical or if alternative solutions emerge during the contract period. Continuous monitoring of performance and evolving needs is essential to mitigate these risks.

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

Solicitation ID: N0002409R3164

Offers Received: 2

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: $171,129,025

Exercised Options: $170,934,203

Current Obligation: $167,981,063

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4030

IDV Type: IDC

Timeline