DoD's $250M Cloud Services Contract to SAIC: A Deep Dive into Value and Competition
Contract Overview
Contract Amount: $250,673,989 ($250.7M)
Contractor: Science Applications International Corporation
Awarding Agency: Department of Defense
Start Date: 2019-09-10
End Date: 2025-09-07
Contract Duration: 2,189 days
Daily Burn Rate: $114.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: CLOUDONE CONTINUATION CONTRACT - CLOUD SERVICES
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $250.7 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION for work described as: CLOUDONE CONTINUATION CONTRACT - CLOUD SERVICES Key points: 1. Value for money assessed through pricing benchmarks and comparison to similar cloud service contracts. 2. Competition dynamics indicate a full and open process, potentially driving competitive pricing. 3. Risk indicators are monitored through contract performance and contractor track record. 4. Performance context is evaluated against service level agreements and delivery timelines. 5. Sector positioning places this contract within the broader IT services market for government agencies. 6. The contract's firm-fixed-price structure aims to provide cost certainty. 7. Delivery order awards suggest flexibility within a larger framework agreement.
Value Assessment
Rating: good
The $250.7 million total value over its period of performance suggests a significant investment in cloud services. Benchmarking against similar large-scale cloud service contracts awarded by the Department of Defense (DoD) is crucial for a precise value assessment. While specific per-unit costs are not detailed here, the firm-fixed-price (FFP) nature of the contract provides a degree of cost predictability. The number of delivery orders (4) indicates a structured approach to tasking within the contract.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under a full and open competition, suggesting that all responsible sources were permitted to submit offers. The specific number of bidders is not provided, but a full and open competition generally fosters a more robust price discovery process compared to limited or sole-source awards. This approach aims to ensure the government receives the most advantageous offer based on a combination of price and technical factors.
Taxpayer Impact: A full and open competition is generally favorable for taxpayers as it increases the likelihood of obtaining competitive pricing and innovative solutions, thereby maximizing the value of federal dollars spent.
Public Impact
The Department of the Air Force, a branch of the DoD, is the primary beneficiary, receiving essential cloud computing services. This contract supports the delivery of critical IT infrastructure and services necessary for modern military operations. The geographic impact is primarily within the United States, supporting DoD installations and personnel. Workforce implications may include IT professionals employed by SAIC and its subcontractors, contributing to the federal IT workforce.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for scope creep if not managed tightly within the delivery order structure.
- Dependence on a single contractor for critical cloud infrastructure could pose risks.
- Ensuring ongoing cost-effectiveness of cloud services over the contract duration requires continuous monitoring.
Positive Signals
- Awarded through full and open competition, suggesting a competitive pricing environment.
- Firm-fixed-price contract type provides cost certainty for the government.
- The contract is managed by the Department of Defense, an agency with established procurement oversight processes.
- Long-term contract duration allows for stable service provision and potential for economies of scale.
Sector Analysis
This contract falls within the Information Technology (IT) sector, specifically focusing on cloud computing services. The federal government is a major consumer of cloud services, with spending in this area growing significantly as agencies modernize their infrastructure. This contract with SAIC represents a substantial portion of the DoD's investment in cloud solutions, aiming to enhance agility, scalability, and security of its IT operations. Comparable spending benchmarks would involve analyzing other large cloud service contracts awarded to major IT providers by various federal agencies.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct small business set-aside benefits associated with this specific award. However, the prime contractor, Science Applications International Corporation (SAIC), may engage small businesses as subcontractors to fulfill portions of the contract requirements. The extent of small business subcontracting would depend on SAIC's subcontracting plan and the specific needs of the cloud services being delivered.
Oversight & Accountability
Oversight for this contract is primarily managed by the Department of the Air Force, a component of the Department of Defense. Accountability measures are embedded within the contract's terms and conditions, including performance standards and reporting requirements. Transparency is facilitated through contract award databases and public reporting mechanisms. The DoD also has an Inspector General (IG) office that can conduct audits and investigations into contract performance and spending.
Related Government Programs
- DoD Cloud Computing Services
- General Services Administration (GSA) Cloud Contracts
- IT Services for Federal Agencies
- Enterprise IT Modernization Programs
Risk Flags
- Potential for vendor lock-in
- Cybersecurity risks in cloud environments
- Ensuring performance against SLAs
- Managing evolving cloud technology requirements
Tags
it, defense, cloud-computing, science-applications-international-corporation, department-of-defense, department-of-the-air-force, firm-fixed-price, full-and-open-competition, delivery-order, computer-systems-design-services, virginia
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $250.7 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION. CLOUDONE CONTINUATION CONTRACT - CLOUD SERVICES
Who is the contractor on this award?
The obligated recipient is SCIENCE APPLICATIONS INTERNATIONAL CORPORATION.
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 $250.7 million.
What is the period of performance?
Start: 2019-09-10. End: 2025-09-07.
What is SAIC's track record with large federal IT contracts, particularly in cloud services?
Science Applications International Corporation (SAIC) has a long history of providing IT services to the federal government, including extensive experience with cloud solutions. They have been awarded numerous large contracts across various agencies, such as the Department of Defense, NASA, and the Department of Homeland Security. Their expertise spans cloud migration, managed cloud services, cybersecurity for cloud environments, and hybrid cloud solutions. SAIC's performance on previous large-scale contracts, including those involving complex IT infrastructure and mission-critical systems, provides a basis for assessing their capability to deliver on this $250.7 million cloud services contract. A review of past performance evaluations and contract modifications would offer further insight into their reliability and effectiveness in delivering similar services.
How does the $250.7 million value compare to similar cloud service contracts awarded by the DoD?
The $250.7 million total contract value over its period of performance is substantial, placing it among significant investments in cloud infrastructure by the Department of Defense. To benchmark this value, one would compare it to other large-scale cloud service contracts awarded by the DoD or other federal agencies to major IT providers. For instance, contracts for enterprise-wide cloud migration, cloud hosting, or cloud-based software solutions often run into hundreds of millions or even billions of dollars over several years. The specific services covered (e.g., IaaS, PaaS, SaaS, managed services) and the duration of the contract are key factors in making accurate comparisons. Without detailed service breakdowns and contract lengths, a precise comparison is difficult, but the magnitude suggests it aligns with major federal cloud initiatives.
What are the primary risks associated with this contract, and how are they being mitigated?
Primary risks for a contract of this nature include potential cost overruns if not managed effectively, cybersecurity vulnerabilities inherent in cloud environments, vendor lock-in, and performance issues impacting critical DoD operations. Mitigation strategies typically involve robust contract oversight by the Department of the Air Force, adherence to strict security protocols and compliance standards (e.g., FedRAMP, DoD Cloud Computing Security Requirements Guide), clear performance metrics and service level agreements (SLAs), and contingency planning. The firm-fixed-price nature of the contract helps mitigate cost overrun risks for the government, provided the scope is well-defined. Regular performance reviews and audits by the DoD and potentially its Inspector General are also key mitigation measures.
How effective is the firm-fixed-price (FFP) contract type in ensuring value for money for cloud services?
The firm-fixed-price (FFP) contract type is generally considered effective in ensuring value for money when the scope of work is well-defined and unlikely to change significantly. For cloud services, FFP can provide cost certainty to the government, as the contractor assumes most of the risk for cost overruns. This encourages the contractor to manage resources efficiently. However, if the requirements for cloud services evolve rapidly, an FFP contract might become less flexible, potentially leading to change orders or the need for new contracts. For stable, well-understood cloud service needs, FFP can be an excellent mechanism for controlling costs and ensuring predictable spending. The success of FFP in this case depends on the clarity of the defined services and the contractor's ability to deliver within the agreed price.
What are the historical spending patterns for cloud services within the Department of Defense?
Historical spending patterns for cloud services within the Department of Defense (DoD) show a significant and consistent upward trend over the past decade. As the DoD has prioritized digital modernization and enhanced operational agility, investments in cloud computing have grown substantially. This includes spending on Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS) across various branches and commands. Early spending was often fragmented, with agencies adopting cloud solutions independently. More recently, the DoD has pursued more strategic, enterprise-wide cloud strategies, such as the Joint Enterprise Defense Infrastructure (JEDI) cloud (though its fate was complex) and the ongoing efforts to establish secure, scalable cloud environments. This $250.7 million contract with SAIC is indicative of this ongoing, large-scale investment in cloud 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 - STORAGE
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 4
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 12010 SUNSET HILLS RD FL 4, 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: $383,424,218
Exercised Options: $383,424,218
Current Obligation: $250,673,989
Actual Outlays: $1,927,479
Subaward Activity
Number of Subawards: 2
Total Subaward Amount: $583,057
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Parent Contract
Parent Award PIID: 47QTCK18D0001
IDV Type: GWAC
Timeline
Start Date: 2019-09-10
Current End Date: 2025-09-07
Potential End Date: 2026-03-07 00:00:00
Last Modified: 2026-01-13
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