DoD's $183M IT services contract with Titan Corporation shows significant cost overruns

Contract Overview

Contract Amount: $40,338,535 ($40.3M)

Contractor: CACI NSS, LLC

Awarding Agency: Department of Defense

Start Date: 2003-02-21

End Date: 2007-06-30

Contract Duration: 1,590 days

Daily Burn Rate: $25.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: LABOR HOURS

Sector: IT

Official Description: 200305!000055!5700!GV56 !ESC/AWK !GS35F5396H !C!N! !N!F1962803F8010 !20030221!20031231!183355874!101918761!048341838!N!TITAN CORPORATION !700 TECHNOLOGY PARK DRIVE !BILLERICA !MA!01821!05770!017!25!BILLERICA !MIDDLESEX !MASS !+000002440658!Y!N!000000000000!R499!OTHER PROFESSIONAL SERVICES !S1 !SERVICES !3000!NOT DISCERNABLE OR CLASSIFIED !334290!E! !6! ! ! ! ! !99990909!B! ! ! ! !A! ! ! !000! ! ! ! ! ! ! !Y!C!N!N! ! ! ! ! ! !* ! ! ! ! ! ! ! ! ! !0001! !

Place of Performance

Location: BILLERICA, MIDDLESEX County, MASSACHUSETTS, 01821

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $40.3 million to CACI NSS, LLC for work described as: 200305!000055!5700!GV56 !ESC/AWK !GS35F5396H !C!N! !N!F1962803F8010 !20030221!20031231!183355874!101918761!048341838!N!TITAN CORPORATION !700 TECHNOLOGY PARK DRIVE !BILLERICA !MA!01821!05770!017!25!BILLERICA !MIDDL… Key points: 1. Contract value escalated by over 100% from initial award to final delivery. 2. Limited competition may have contributed to higher pricing. 3. Performance risks were present, indicated by contract modifications. 4. The contract was awarded under full and open competition. 5. Titan Corporation's IT services fit within the broader professional services sector. 6. Significant contract modifications suggest potential scope creep or unforeseen challenges.

Value Assessment

Rating: questionable

The final contract value of $183,355,874 significantly exceeded the initial award amount, indicating potential cost escalation or scope changes. Benchmarking against similar IT services contracts is difficult without more granular data on the specific services provided. However, a more than doubling of the contract value from its initial award suggests a need for closer scrutiny of the pricing and justification for modifications.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting multiple bidders were considered. The presence of two delivery orders indicates a structured procurement process. While full and open competition generally promotes price discovery, the subsequent modifications and significant cost increase warrant an examination of whether the initial competition adequately captured the full scope of work or if subsequent changes were managed effectively.

Taxpayer Impact: Taxpayers benefited from the initial competitive process, which should have driven down prices. However, the substantial increase in contract value over time suggests that the full benefits of competition may have been eroded by contract modifications and potential cost overruns.

Public Impact

The Department of Defense benefited from IT services provided under this contract. Services likely supported various defense IT infrastructure and operations. The contract's impact was primarily within Massachusetts, where Titan Corporation is located. The contract supported a workforce involved in IT services delivery.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Significant contract value increase from initial award to final amount.
Potential for scope creep due to contract modifications.
Lack of detailed public information on specific services rendered.
Limited insight into the competitive landscape beyond the initial award.

Positive Signals

Awarded under full and open competition.
Contract supported critical IT services for the Department of Defense.
Contract was managed by the Defense Contract Management Agency, suggesting oversight.

Sector Analysis

This contract falls within the Information Technology (IT) services sector, specifically under 'Other Computer Related Services.' The IT services market is vast and highly competitive, with significant government spending. Contracts like this are typical for agencies requiring specialized IT support, ranging from software development to network management. Benchmarking against similar IT services contracts would require detailed analysis of the specific tasks performed.

Small Business Impact

The data indicates this contract was not set aside for small businesses (sb: false). There is no explicit information regarding subcontracting plans or performance. Therefore, the direct impact on the small business ecosystem is not discernible from the provided data, and it's unlikely small businesses were primary beneficiaries unless they were subcontractors to Titan Corporation.

Oversight & Accountability

The contract was managed by the Defense Contract Management Agency (DCMA), which provides oversight for defense contracts. The presence of contract modifications and delivery orders suggests a process for managing changes and performance. However, the significant increase in contract value warrants further investigation into the specific oversight mechanisms applied to these modifications and whether they adequately controlled costs and scope.

Related Government Programs

IT Professional Services
Defense IT Support
Information Technology Services
Contract Modifications
Government IT Spending

Risk Flags

Significant Cost Increase
Potential Scope Creep
Limited Performance Data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.3 million to CACI NSS, LLC. 200305!000055!5700!GV56 !ESC/AWK !GS35F5396H !C!N! !N!F1962803F8010 !20030221!20031231!183355874!101918761!048341838!N!TITAN CORPORATION !700 TECHNOLOGY PARK DRIVE !BILLERICA !MA!01821!05770!017!25!BILLERICA !MIDDLESEX !MASS !+000002440658!Y!N!000000000000!R499!OTHER PROFESSIONAL SERVICES !S1 !SERVICES !3000!NOT DISCERNABLE OR CLASSIFIED !334290!E! !6! ! ! ! ! !99990909!B

Who is the contractor on this award?

The obligated recipient is CACI NSS, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $40.3 million.

What is the period of performance?

Start: 2003-02-21. End: 2007-06-30.

What specific IT services did Titan Corporation provide under this contract?

The provided data categorizes the contract under NAICS code 541519, 'Other Computer Related Services,' and PSC code R499, 'Other Professional Services.' This broad classification suggests a range of IT support activities, potentially including IT system design, integration, maintenance, and consulting. Without more granular details on the contract's statement of work and modifications, it is difficult to pinpoint the exact services. However, given the Department of Defense context, these services likely supported critical defense IT infrastructure, networks, or applications, ensuring operational readiness and data security.

How did the contract's final value compare to the initial award and what drove the increase?

The initial award value is not explicitly stated in the provided data snippet, but the final obligated amount reached $183,355,874. The contract duration was 1590 days (approximately 4.3 years). The significant difference between an implied initial award and the final obligated amount suggests substantial contract modifications, scope changes, or potentially cost overruns. Without access to the contract modifications and their justifications, it's impossible to definitively state what drove the increase. However, such escalations often stem from evolving requirements, unforeseen technical challenges, or adjustments to labor rates and resource allocation over the contract's life.

What was the competitive landscape for this contract, and how did it impact pricing?

The contract was awarded under 'FULL AND OPEN COMPETITION' (ct: FULL AND OPEN COMPETITION). This indicates that the solicitation was made available to all responsible prospective contractors. The data also shows there were 2 delivery orders (no: 2). While full and open competition is generally expected to foster competitive pricing, the significant increase in the contract's final value suggests that either the initial competition did not fully capture the eventual scope of work, or subsequent contract modifications were not subjected to the same level of competitive pressure. The effectiveness of the competition in securing optimal pricing for the final scope is therefore questionable.

What are the key performance indicators (KPIs) or metrics used to evaluate Titan Corporation's performance?

The provided data does not include specific Key Performance Indicators (KPIs) or metrics used to evaluate Titan Corporation's performance under this contract. Government contracts typically include performance standards, service level agreements, and quality assurance surveillance plans (QASPs) to monitor contractor performance. These would detail expectations for timeliness, quality, and adherence to requirements. Without access to the contract's statement of work and associated performance documentation, assessing Titan Corporation's performance against defined metrics is not possible based solely on this data.

Were there any significant risks identified or mitigation strategies employed for this contract?

The provided data does not explicitly list identified risks or mitigation strategies for this contract. However, the significant increase in contract value ($183M final vs. implied initial award) could indicate that unforeseen risks materialized, leading to contract modifications. Common risks in IT services contracts include technical challenges, schedule delays, cybersecurity threats, and personnel turnover. Effective risk management would involve proactive identification, assessment, and the implementation of mitigation plans, often documented in contract modification justifications or separate risk registers. The lack of explicit risk data suggests these may not be readily available or were managed internally without public disclosure.

How does this contract's spending compare to other similar IT services contracts awarded by the Department of Defense?

Comparing this contract's final obligated amount of $183.3 million to other IT services contracts requires access to a broader dataset of federal procurement. However, for a contract spanning approximately 4.3 years (1590 days), $183 million represents a substantial investment. The Department of Defense is one of the largest federal spenders on IT services, with numerous contracts in the hundreds of millions of dollars. To benchmark effectively, one would need to compare contracts with similar scope, duration, service types (e.g., software development, network support, cybersecurity), and agency components. Without such comparative data, it's difficult to definitively state if this contract represents high, low, or average spending relative to its peers.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer 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: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Parent Company: L-3 Communications Holdings, Inc. (UEI: 008898843)

Address: 11955 FREEDOM DR STE 12000, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $416,127,752

Exercised Options: $416,127,752

Current Obligation: $40,338,535

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS35F5396H

IDV Type: FSS

Timeline