GSA's $20.4M contract for PEGASYS AMS O&M DEVELOPMENT awarded to CGI Federal Inc. shows concerning value

Contract Overview

Contract Amount: $20,368,470 ($20.4M)

Contractor: CGI Federal Inc.

Awarding Agency: General Services Administration

Start Date: 2006-11-22

End Date: 2009-04-30

Contract Duration: 890 days

Daily Burn Rate: $22.9K/day

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PEGASYS AMS O&M DEVELOPEMENT

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20405

State: District of Columbia Government Spending

Plain-Language Summary

General Services Administration obligated $20.4 million to CGI FEDERAL INC. for work described as: PEGASYS AMS O&M DEVELOPEMENT Key points: 1. The contract's value appears high relative to its duration and scope. 2. Limited competition may have impacted pricing and overall value for money. 3. The contractor has a significant presence in government IT services. 4. Performance context is difficult to ascertain without detailed deliverables. 5. This contract falls within the 'Other Computer Related Services' sector. 6. The firm fixed price contract type suggests defined scope but potential for cost overruns if scope changes. 7. The contract was awarded under the 'Other Than Full and Open Competition' category.

Value Assessment

Rating: concerning

The total value of $20.4 million over approximately 2.5 years (890 days) suggests a high annual cost. Benchmarking against similar IT operations and maintenance contracts is difficult without specific service details, but the per-day cost appears elevated. The lack of robust competition further raises concerns about whether the government secured the best possible price for these services. The contract's duration and the nature of 'O&M DEVELOPMENT' could imply ongoing, critical support, but the pricing does not immediately reflect efficiency or cost-effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under 'Other Than Full and Open Competition,' indicating a sole-source or limited competition scenario. The specific justification for this procurement method is not provided in the data, but it typically arises when only one source can meet the requirement, or when urgency or specific circumstances preclude full and open competition. The limited number of bidders (implied by sole-source) means the government did not benefit from a competitive bidding process, which can lead to higher prices and less innovation.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without multiple bids, the government had less leverage to negotiate favorable terms and pricing, potentially resulting in a less efficient use of public funds.

Public Impact

The primary beneficiaries are likely the internal users and systems supported by the PEGASYS AMS (Asset Management System). The services delivered include operations, maintenance, and development for this critical system. The geographic impact is centered in the District of Columbia, where the contract is managed. Workforce implications include the employment of IT professionals by CGI Federal Inc. to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for overpayment due to sole-source award.
Lack of transparency in the justification for limited competition.
Risk of vendor lock-in given the specialized nature of O&M development.
Uncertainty regarding the actual value delivered for the significant expenditure.

Positive Signals

Contract awarded to an established IT services provider (CGI Federal Inc.).
Firm Fixed Price contract type can provide cost certainty if scope is well-defined.
Contract duration suggests a need for sustained support for a critical system.

Sector Analysis

This contract falls under the 'Other Computer Related Services' category (NAICS 541519), a broad sector encompassing IT support, system maintenance, and development services. The government IT services market is highly competitive, with numerous large and small businesses vying for contracts. However, specific niches like operations and maintenance development for proprietary or legacy systems can sometimes lead to limited competition. The total federal spending on IT services is in the hundreds of billions annually, making this contract a small fraction of the overall market.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). CGI Federal Inc. is a large corporation, suggesting that the primary contract was not aimed at fostering small business participation. There is no information provided regarding subcontracting plans, so the extent to which small businesses may benefit indirectly through subcontracts is unknown. The lack of a small business set-aside means opportunities for smaller, specialized firms to compete directly were likely limited.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration (GSA), specifically the Office of Government-wide Policy. As a firm fixed-price contract, oversight would focus on ensuring that the contractor meets the defined scope, deliverables, and performance standards. Transparency is limited by the lack of detailed public information on the contract's performance and the justification for its sole-source award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IT Operations and Maintenance Services
Software Development Contracts
Government-wide IT Support Contracts
Asset Management Systems
General Services Administration Contracts

Risk Flags

Sole-source award raises concerns about competition and pricing.
High daily cost warrants further investigation into value for money.
Lack of detailed performance metrics makes assessment difficult.
Potential for vendor lock-in due to specialized O&M development.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $20.4 million to CGI FEDERAL INC.. PEGASYS AMS O&M DEVELOPEMENT

Who is the contractor on this award?

The obligated recipient is CGI FEDERAL INC..

Which agency awarded this contract?

Awarding agency: General Services Administration (Office of Government-wide Policy).

What is the total obligated amount?

The obligated amount is $20.4 million.

What is the period of performance?

Start: 2006-11-22. End: 2009-04-30.

What specific services were included under 'PEGASYS AMS O&M DEVELOPMENT' and how do they align with the $20.4 million cost?

The provided data does not detail the specific services encompassed by 'PEGASYS AMS O&M DEVELOPMENT.' 'O&M' typically refers to Operations and Maintenance, suggesting the contract covered the upkeep, support, and potentially enhancement of the PEGASYS Asset Management System. 'DEVELOPMENT' could imply ongoing improvements, bug fixes, or new feature implementation. Without a detailed statement of work, it is impossible to definitively assess if the $20.4 million expenditure is justified. Factors such as the complexity of the system, the criticality of its function, the required uptime, security protocols, and the scope of development work would all influence the cost. A higher annual cost might be warranted for a mission-critical system requiring 24/7 support and significant ongoing development, but the limited competition and lack of performance metrics make a value assessment challenging.

How does the cost per day of this contract compare to industry benchmarks for similar IT O&M services?

The contract spanned 890 days for a total of $20,368,469.99, resulting in a daily cost of approximately $22,886. This figure represents the total contract value divided by the duration. To benchmark this against industry standards for IT Operations and Maintenance (O&M) and development services, one would need to compare it with contracts for similar systems (e.g., asset management, enterprise resource planning) of comparable complexity and criticality. Factors such as the number of users supported, the scope of the system, the technology stack, and the required service level agreements (SLAs) are crucial. Without these specifics, a direct comparison is difficult. However, for context, daily rates for IT support and development can range widely, from a few hundred dollars for basic helpdesk to many thousands for specialized, high-availability enterprise systems. The $22,886 daily cost appears substantial, reinforcing the need for a detailed justification and performance review, especially given the sole-source nature of the award.

What are the potential risks associated with a sole-source award for critical IT operations and maintenance?

Sole-source awards for critical IT operations and maintenance (O&M) present several risks. Firstly, the absence of competition can lead to inflated pricing, as the contractor faces less pressure to offer competitive rates. Secondly, it can reduce the incentive for the contractor to innovate or provide exceptional service, as the government has limited alternatives. Thirdly, there's a risk of vendor lock-in, where the government becomes overly dependent on a single provider, making it difficult and costly to switch vendors in the future, especially if the system is proprietary or requires specialized knowledge. Fourthly, the justification for a sole-source award might mask underlying issues, such as poor planning or a failure to properly scope requirements in a way that allows for broader competition. Finally, without competitive benchmarking, it's harder to ensure the government is receiving optimal value for its investment, potentially leading to inefficient use of taxpayer funds.

What is CGI Federal Inc.'s track record with the General Services Administration and similar government contracts?

CGI Federal Inc. is a significant player in the government contracting space, holding numerous contracts across various federal agencies, including the General Services Administration (GSA). Their track record generally involves providing a wide range of IT services, including system modernization, cloud solutions, cybersecurity, and administrative support. While specific performance details for the 'PEGASYS AMS O&M DEVELOPMENT' contract are not provided, CGI Federal has a history of managing large-scale IT projects for the government. However, like many large contractors, they may have faced scrutiny or performance issues on specific contracts. A comprehensive review would require examining contract performance reports, past performance evaluations, and any documented disputes or awards associated with CGI Federal's portfolio, particularly within GSA and for similar IT O&M and development services.

How has federal spending on 'Other Computer Related Services' evolved, and where does this contract fit within that trend?

Federal spending on 'Other Computer Related Services' (NAICS 541519) has generally trended upwards over the years, reflecting the increasing reliance of government agencies on technology for operations, data management, and service delivery. This category is broad and can include services ranging from IT consulting and system integration to custom software development and IT support. The $20.4 million awarded to CGI Federal Inc. for PEGASYS AMS O&M DEVELOPMENT represents a significant, albeit specific, expenditure within this sector. While it's a substantial amount for a single contract, it must be viewed within the context of the billions spent annually across the government on IT services. The trend indicates a sustained demand for these types of services, driven by modernization efforts, cybersecurity needs, and the ongoing maintenance of complex IT infrastructures. This particular contract highlights the government's investment in maintaining and developing critical asset management systems.

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

Contractor Details

Parent Company: Groupe CGI Inc (UEI: 246801237)

Address: 12601 FAIR LAKES CIRCLE, FAIRFAX, VA, 11

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $20,368,470

Exercised Options: $20,368,470

Current Obligation: $20,368,470

Parent Contract

Parent Award PIID: GS35F4797H

IDV Type: FSS

Timeline