DoD's $594.8M IT contract with CSRA LLC for computer systems design services shows potential value concerns

Contract Overview

Contract Amount: $594,883,136 ($594.9M)

Contractor: Csra LLC

Awarding Agency: Department of Defense

Start Date: 2004-08-01

End Date: 2014-09-30

Contract Duration: 3,712 days

Daily Burn Rate: $160.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: COST PLUS AWARD FEE

Sector: IT

Official Description: 200505!000083!5700!FA4600!55CONS/CC !FA460004C0010 !A!Y!C!Y! !P00007!20050101!20050930!169105165!169105165!009581091!N!COMPUTER SCIENCES CORPORATION !408 GALVIN RD N !BELLEVUE !NE!68005!35875!153!31!OFFUTT AFB !SARPY !NEBRASKA !+000001441609!N!N!000000000000!J070!MAINT & REPAIR OF EQ/ADP EQUIP & SUPPLIES !S1 !SERVICES !000 !* !541512!E! !3! ! !B! ! !20200930!B!F! !A! !A!N!R!2!006!B! !C!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! !Y! ! !0001! !

Place of Performance

Location: OFFUTT AFB, SARPY County, NEBRASKA, 68113

State: Nebraska Government Spending

Plain-Language Summary

Department of Defense obligated $594.9 million to CSRA LLC for work described as: 200505!000083!5700!FA4600!55CONS/CC !FA460004C0010 !A!Y!C!Y! !P00007!20050101!20050930!169105165!169105165!009581091!N!COMPUTER SCIENCES CORPORATION !408 GALVIN RD N !BELLEVUE !NE!68005!35875!153!31!OFFUTT AFB !SARP… Key points: 1. The contract's total value of $594.8M over its lifetime suggests a significant investment in IT services. 2. Competition was full and open, indicating a potentially robust market for these services. 3. The contract type, Cost Plus Award Fee (CPAF), can incentivize performance but also carries inherent cost-reimbursement risks. 4. The duration of the contract (over 10 years) implies a long-term need for these IT services within the Air Force. 5. The specific NAICS code (541512) points to a focus on computer systems design, a critical area for modern defense operations. 6. The contract was awarded to CSRA LLC, a major IT services provider, suggesting a reliance on established industry players.

Value Assessment

Rating: questionable

The total award value of $594.8M over more than a decade for computer systems design services warrants scrutiny. While the contract type (CPAF) allows for performance incentives, it also means costs could escalate beyond initial projections. Benchmarking this against similar large-scale IT service contracts within the Department of Defense or other federal agencies would be crucial to determine if the pricing is competitive and reflects true value for money. Without detailed breakdowns of labor categories, hours, and specific deliverables, a precise value assessment is challenging, but the sheer scale suggests a need for rigorous oversight.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is generally positive for price discovery and ensuring a wide range of potential offerors. The presence of 6 bids indicates a healthy level of interest from the market. This competitive process should theoretically drive down costs and encourage innovation. However, the ultimate price and value depend on the specific requirements and the evaluation criteria used.

Taxpayer Impact: A full and open competition suggests that taxpayers benefit from a potentially more efficient use of funds due to market forces driving competitive pricing.

Public Impact

The primary beneficiary is the Department of the Air Force, which receives critical computer systems design and support services. Services delivered likely include system architecture, software development, integration, and maintenance for complex IT infrastructures. The geographic impact is centered around Offutt AFB, Nebraska, indicating support for operations and personnel at that installation. Workforce implications may include direct employment by CSRA LLC and potential subcontracting opportunities, supporting IT professionals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee contracts can lead to cost overruns if not managed tightly.
The long contract duration (over 10 years) increases the risk of technological obsolescence or changing requirements.
Reliance on a single large contractor (CSRA LLC) could limit future flexibility or create vendor lock-in.
The specific performance metrics and award fee structure are not detailed, making it hard to assess if incentives are truly driving optimal outcomes.

Positive Signals

Full and open competition suggests a competitive environment that should benefit the government.
The contract is with a large, established IT services provider (CSRA LLC), implying experience and capacity.
The award fee mechanism, if well-structured, can incentivize high performance and cost savings.
The contract supports critical IT infrastructure for the Air Force, aligning with strategic defense needs.

Sector Analysis

The IT services sector is a massive and rapidly evolving market. Federal spending in this area, particularly for defense agencies, is substantial, driven by the need for advanced cybersecurity, data management, and system modernization. This contract falls within the Computer Systems Design Services category (NAICS 541512), which encompasses a wide range of activities from designing integrated IT systems to providing IT consulting. The total value of $594.8M places it as a significant contract within this sector, likely supporting core operational IT functions for the Air Force.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the large scale and nature of the services, it is likely that the prime contractor, CSRA LLC, would be expected to engage small businesses through subcontracting. The extent of small business participation would depend on the specific subcontracting plan negotiated as part of the contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. The Cost Plus Award Fee structure necessitates close monitoring of performance against established metrics and award criteria. Transparency would be enhanced through regular reporting requirements and potential audits. The Inspector General's office for the Department of Defense would have jurisdiction for investigating any potential fraud, waste, or abuse related to this contract.

Related Government Programs

IT Services
Computer Systems Design
Defense IT Procurement
Air Force IT Contracts
Cost Plus Award Fee Contracts

Risk Flags

Cost-reimbursement contract type (CPAF) carries inherent risk of cost overruns.
Long contract duration increases risk of technological obsolescence and requirement changes.
Lack of detailed performance metrics makes objective value assessment difficult.
Potential for vendor lock-in due to long-term, large-scale nature of the contract.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $594.9 million to CSRA LLC. 200505!000083!5700!FA4600!55CONS/CC !FA460004C0010 !A!Y!C!Y! !P00007!20050101!20050930!169105165!169105165!009581091!N!COMPUTER SCIENCES CORPORATION !408 GALVIN RD N !BELLEVUE !NE!68005!35875!153!31!OFFUTT AFB !SARPY !NEBRASKA !+000001441609!N!N!000000000000!J070!MAINT & REPAIR OF EQ/ADP EQUIP & SUPPLIES !S1 !SERVICES !000 !* !541512!E! !3! ! !B! ! !202

Who is the contractor on this award?

The obligated recipient is CSRA LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $594.9 million.

What is the period of performance?

Start: 2004-08-01. End: 2014-09-30.

What was the specific performance history and track record of CSRA LLC with the Department of Defense prior to and during this contract?

Assessing CSRA LLC's prior performance is crucial for understanding their suitability for this significant contract. While the provided data doesn't detail their specific track record, a comprehensive analysis would involve reviewing past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), any documented issues, awards, or disputes with the DoD. CSRA LLC, as a major IT contractor, has a history of working with various government agencies. Understanding their success rates on similar-sized and scoped contracts, their ability to meet deadlines, manage budgets, and deliver quality services would provide context for their performance on this particular $594.8M award. Without this specific historical data, it's difficult to definitively assess their reliability and effectiveness for this long-term engagement.

How does the total contract value of $594.8M compare to similar IT systems design contracts awarded by the Air Force or DoD in the same period?

The $594.8M total award value for computer systems design services over approximately 10 years is substantial. To benchmark its value, it should be compared against other large-scale IT service contracts awarded by the Department of Defense or the Air Force during the contract's performance period (roughly 2004-2014). Key comparison points would include the scope of services (e.g., system design, software development, integration, maintenance), the number of bidders, the contract type (e.g., CPAF, FFP), and the specific IT domains addressed. If similar contracts for comparable services were awarded at significantly lower total values or with more favorable terms (e.g., fixed-price), it could indicate that this contract may not have represented the best value. Conversely, if the complexity and criticality of the systems supported justify the cost, it could be seen as appropriately priced.

What were the primary risks identified during the solicitation and award process for this contract, and how were they mitigated?

For a contract of this magnitude and duration, several risks would typically be identified. These could include technical risks (e.g., complexity of systems, integration challenges, potential for obsolescence), cost risks (inherent in CPAF contracts), schedule risks (delays in delivery), and performance risks (failure to meet requirements). Mitigation strategies would likely involve detailed technical specifications, robust evaluation criteria, clear performance metrics tied to the award fee, strong government oversight, and potentially phased delivery schedules. The full and open competition itself acts as a risk mitigation tool by allowing multiple vendors to propose solutions, potentially highlighting and addressing risks upfront. A review of the source selection decision document (if available) would provide specific insights into the risks identified and the government's planned mitigation efforts.

How effective was the Cost Plus Award Fee (CPAF) structure in ensuring program effectiveness and cost control for this contract?

The effectiveness of the CPAF structure hinges entirely on the clarity and measurability of the performance objectives and award fee criteria. If well-defined metrics were established for technical performance, schedule adherence, cost management, and user satisfaction, the CPAF could have effectively incentivized CSRA LLC to exceed expectations. However, poorly defined criteria can lead to disputes or the government paying award fees for mediocre performance. For this contract, assessing effectiveness requires examining the specific award fee determinations made over its life. Were significant award fees consistently earned? Were there instances where performance fell short, impacting the award fee? Without access to these details, it's challenging to definitively state how well the CPAF structure served its purpose in driving program effectiveness and controlling costs beyond the base fee.

What has been the historical spending trend for similar computer systems design services within the Department of the Air Force over the last two decades?

Analyzing historical spending trends for computer systems design services within the Air Force over the past two decades would reveal patterns of investment, potential surges or dips related to technological shifts or strategic priorities, and the average contract values. This context is vital for understanding if the $594.8M awarded to CSRA LLC was an outlier, a continuation of a trend, or a reflection of increasing IT needs. For instance, spending might have increased significantly post-9/11 due to heightened security requirements or during periods of major system upgrades. Comparing this contract's value against the backdrop of overall Air Force IT budgets and spending on similar services would help determine if this represented a typical or exceptional level of investment for the time and scope.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 6

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 408 GALVIN RD N, BELLEVUE, NE, 68005

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline