General Dynamics IT awarded $470M contract for NAVAIR CSM Task Order, exceeding initial estimates

Contract Overview

Contract Amount: $445,845,259 ($445.8M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: General Services Administration

Start Date: 2017-08-08

End Date: 2021-12-07

Contract Duration: 1,582 days

Daily Burn Rate: $281.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS AWARD FEE

Sector: IT

Official Description: AWARD MADE TO GENERAL DYNAMIC INFORMATION TECHNOLOGY FOR NAVAIR CSM TASK ORDER, IN THE AMOUNT NOT TO EXCEED $469,751,851.00. IGF::CL::IGF

Place of Performance

Location: SAINT INIGOES, SAINT MARYS County, MARYLAND, 20684

State: Maryland Government Spending

Plain-Language Summary

General Services Administration obligated $445.8 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: AWARD MADE TO GENERAL DYNAMIC INFORMATION TECHNOLOGY FOR NAVAIR CSM TASK ORDER, IN THE AMOUNT NOT TO EXCEED $469,751,851.00. IGF::CL::IGF Key points: 1. Value for money appears fair given the contract type and duration, though detailed cost breakdowns are needed for a definitive assessment. 2. Competition dynamics indicate a full and open process, suggesting a competitive environment that should have driven favorable pricing. 3. Risk indicators include the Cost Plus Award Fee (CPAF) structure, which can incentivize cost overruns if not managed tightly. 4. Performance context is tied to the Naval Air Systems Command (NAVAIR) Command Support Management (CSM) functions, critical for aviation readiness. 5. Sector positioning places this contract within the broader IT and Engineering Services sector supporting defense agencies.

Value Assessment

Rating: fair

The award amount of $469,751,851.00 for a duration of approximately 4 years (1582 days) suggests a significant investment. Benchmarking against similar large-scale IT and engineering support contracts for defense agencies is crucial. The Cost Plus Award Fee (CPAF) contract type allows for contractor reimbursement of allowable costs plus a fee that is based on performance, which can sometimes lead to higher overall costs compared to fixed-price contracts if performance targets are aggressively pursued or if cost controls are not stringent. Without detailed cost breakdowns and performance metrics, a precise value-for-money assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of 3 bids suggests a moderate level of competition for this significant task order. While full and open competition is generally preferred for ensuring fair pricing and access to a wide range of capabilities, the specific number of bidders can influence price discovery. A higher number of bidders typically leads to more robust price competition.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing inherent in a full and open solicitation. However, the ultimate value depends on the effectiveness of the evaluation process and the final negotiated terms.

Public Impact

The primary beneficiaries are the Naval Air Systems Command (NAVAIR) and its aviation programs, which will receive critical support services. Services delivered include command support management, likely encompassing a range of IT, administrative, and technical support functions. The geographic impact is concentrated around NAVAIR's operational centers, primarily in Maryland (ST: MD). Workforce implications include the potential for employment of numerous IT professionals, engineers, and support staff by the prime contractor and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee (CPAF) contract type can incentivize cost growth if not meticulously managed.
The significant dollar value of the contract warrants close monitoring of performance and expenditures.
Reliance on a single prime contractor for critical support functions may pose risks if performance falters.

Positive Signals

Awarded under full and open competition, suggesting a robust selection process.
General Dynamics Information Technology has a substantial track record in government contracting.
The contract duration allows for sustained support to NAVAIR's mission.

Sector Analysis

This contract falls within the Information Technology and Engineering Services sector, a critical area for defense agencies. The market for these services is large and highly competitive, with numerous large and small businesses vying for government contracts. Spending benchmarks for similar IT and support services for defense entities often run into hundreds of millions or billions of dollars annually, making this award significant but not unusual in scale for major defense IT procurements.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (SB: false) and the prime contractor is a large business. There is no explicit information on subcontracting plans for small businesses within this data snippet. However, large prime contractors are often required to meet small business subcontracting goals as part of their contractual obligations, which can provide opportunities for small businesses to participate in the contract's execution.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the General Services Administration (GSA) and the Department of the Navy (NAVAIR). The Cost Plus Award Fee structure necessitates rigorous performance monitoring and financial oversight to ensure that award fees are justified and that costs are reasonable and allocable. Inspector General (IG) jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Naval Air Systems Command (NAVAIR) IT Support Contracts
General Services Administration (GSA) IT Services
Defense Information Technology Contracting
Engineering Services for Federal Agencies

Risk Flags

Cost Plus Award Fee (CPAF) contract type requires diligent oversight to manage potential cost escalations.
The duration of the contract (over 3 years) necessitates sustained performance monitoring.
Dependence on a single contractor for critical support functions.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $445.8 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. AWARD MADE TO GENERAL DYNAMIC INFORMATION TECHNOLOGY FOR NAVAIR CSM TASK ORDER, IN THE AMOUNT NOT TO EXCEED $469,751,851.00. IGF::CL::IGF

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC..

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $445.8 million.

What is the period of performance?

Start: 2017-08-08. End: 2021-12-07.

What is the historical spending pattern for similar NAVAIR Command Support Management (CSM) services?

Analyzing historical spending for NAVAIR CSM services requires access to detailed contract databases and reports. Typically, such services are procured through a series of task orders under larger indefinite-delivery/indefinite-quantity (IDIQ) contracts or through direct awards. Past spending would likely show fluctuations based on evolving requirements, technological advancements, and budgetary allocations. For instance, if NAVAIR has recently undergone significant modernization or digital transformation initiatives, spending on CSM and related IT support would likely have increased. Conversely, periods of budget austerity or program consolidation might see reduced spending. Without specific historical data for this exact service category, it's difficult to provide precise figures, but it's reasonable to assume consistent, substantial investment in maintaining and enhancing command support capabilities within a major naval aviation command.

How does the Cost Plus Award Fee (CPAF) structure compare to other contract types in terms of cost efficiency for this type of service?

Cost Plus Award Fee (CPAF) contracts are often used when the scope of work is not precisely defined, or when performance outcomes are critical and difficult to quantify upfront, such as in complex IT services or research and development. Compared to Fixed-Price (FP) contracts, CPAF can offer more flexibility and incentivize contractor performance towards specific goals through the award fee component. However, FP contracts generally offer greater cost certainty for the government. Compared to Cost Plus Incentive Fee (CPIF), CPAF places more emphasis on subjective performance evaluations for the fee determination, whereas CPIF typically uses a formula tied to cost and schedule targets. For IT services like CSM, CPAF can be effective if performance metrics are well-defined and rigorously monitored, but it carries a higher risk of cost growth than FP contracts if oversight is insufficient. The government pays allowable costs plus a fee, which can be adjusted based on performance, making it potentially more expensive than FP if costs escalate without corresponding performance improvements.

What is General Dynamics Information Technology's track record with similar large-scale defense IT contracts?

General Dynamics Information Technology (GDIT), now part of General Dynamics, has a long and extensive track record of performing large-scale IT and support services contracts for various U.S. federal agencies, including significant work within the Department of Defense. They have historically managed complex system integration, cybersecurity, cloud migration, and sustainment services for major commands like the Navy, Army, and Air Force. Their portfolio often includes contracts similar in scope and value to this NAVAIR CSM task order. While specific performance details and past issues are often proprietary or buried within agency performance reports, GDIT is generally considered a major player with the capacity and experience to handle such demanding procurements. Evaluating their specific performance on this contract would involve reviewing past performance questionnaires, CPARS (Contractor Performance Assessment Reporting System) data, and any documented disputes or contract modifications.

What are the key performance indicators (KPIs) likely being used to determine the award fee for this contract?

For a Command Support Management (CSM) IT contract like this, key performance indicators (KPIs) used for determining the award fee would likely focus on areas critical to operational effectiveness and user satisfaction. These could include system availability and uptime (e.g., 99.9% availability for critical systems), response times for IT support tickets (e.g., resolving Tier 1 issues within 4 hours), successful implementation of system upgrades or new functionalities, cybersecurity compliance and incident response times, project completion rates for assigned tasks (on time and within budget), user satisfaction survey results, and adherence to service level agreements (SLAs). The award fee structure incentivizes GDIT to not only meet but exceed baseline performance expectations in these critical areas, ensuring that NAVAIR receives high-quality, reliable support services.

How does the $469.7 million award compare to the total IT spending of NAVAIR or the Department of the Navy?

The $469.7 million award represents a significant, but likely not dominant, portion of the total IT spending for Naval Air Systems Command (NAVAIR) or the broader Department of the Navy (DoN). NAVAIR manages a vast array of aviation systems, research, development, and sustainment programs, each requiring substantial IT infrastructure and support. The DoN's overall IT budget runs into the billions of dollars annually, encompassing enterprise-wide networks, cybersecurity initiatives, data management, and platform-specific IT requirements across all its commands. This specific contract addresses Command Support Management, which is a crucial but specialized function. Therefore, while $469.7 million is a substantial sum for a single task order, it should be viewed within the context of the much larger, multi-billion dollar IT ecosystems managed by NAVAIR and the DoN.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: GSCQF0B1733087

Offers Received: 3

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 3150 FAIRVIEW PARK DR STE 100, FALLS CHURCH, VA, 22042

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

Financial Breakdown

Contract Ceiling: $489,500,000

Exercised Options: $456,359,121

Current Obligation: $445,845,259

Actual Outlays: $32,951,540

Subaward Activity

Number of Subawards: 154

Total Subaward Amount: $61,386,557

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q14OADU317

IDV Type: IDC

Timeline