General Dynamics' $21.7M contract for learning asset support shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $21,706,611 ($21.7M)

Contractor: General Dynamics ONE Source LLC

Awarding Agency: General Services Administration

Start Date: 2014-07-23

End Date: 2019-07-22

Contract Duration: 1,825 days

Daily Burn Rate: $11.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: IGF::OT::IGF: LEARNING ASSET AND SYSTEMS PROGRAM SUPPORT

Place of Performance

Location: FORT BELVOIR, FAIRFAX County, VIRGINIA, 22060

State: Virginia Government Spending

Plain-Language Summary

General Services Administration obligated $21.7 million to GENERAL DYNAMICS ONE SOURCE LLC for work described as: IGF::OT::IGF: LEARNING ASSET AND SYSTEMS PROGRAM SUPPORT Key points: 1. The contract's value appears reasonable given the duration and services provided, aligning with industry benchmarks. 2. Competition was limited, suggesting potential for higher prices than a more open process might yield. 3. The use of Time and Materials pricing introduces some risk of cost overruns if not closely managed. 4. Performance context is positive, with the contractor fulfilling needs for learning asset and systems program support. 5. This contract falls within the IT services sector, specifically computer systems design. 6. The contract was awarded as a delivery order under a larger indefinite-delivery contract.

Value Assessment

Rating: fair

The total contract value of $21.7 million over five years suggests an average annual spend of approximately $4.34 million. This is a moderate amount for IT systems support services. Benchmarking against similar contracts for learning management systems or IT program support indicates that this pricing is within a reasonable range, especially considering the specialized nature of the services. However, the Time and Materials (T&M) pricing structure, while flexible, can lead to less predictable costs compared to fixed-price contracts. Without detailed cost breakdowns, a precise value-for-money assessment is challenging, but the overall expenditure appears justifiable for the services rendered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The data shows 3 bidders participated in the competition for this specific delivery order. While full and open competition is generally preferred for maximizing price discovery and ensuring fair market value, the relatively low number of bidders (3) for a contract of this size and duration might suggest that the market for such specialized services is concentrated or that the bidding process had specific requirements that limited participation.

Taxpayer Impact: Full and open competition, even with a limited number of bidders, is generally beneficial for taxpayers as it encourages competitive pricing and allows for a wider pool of potential contractors to vie for government work, potentially leading to cost savings.

Public Impact

The primary beneficiaries are military personnel and civilian employees who utilize the learning assets and systems supported by this contract. Services delivered include support for learning asset management and program systems, crucial for training and development. The geographic impact is likely nationwide, supporting federal agencies across various locations. Workforce implications include the employment of IT professionals and subject matter experts by the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost escalation due to Time and Materials pricing structure.
Limited number of bidders (3) may indicate concentrated market or barriers to entry.
Dependence on a single contractor for critical learning asset systems support.

Positive Signals

Awarded under full and open competition, ensuring a fair process.
Contract duration of five years provides stability for service delivery.
Contractor (General Dynamics) is a well-established entity in government contracting.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically under Computer Systems Design Services. The market for IT support and learning management systems within the federal government is substantial, with agencies continually investing in platforms to enhance training and knowledge dissemination. Comparable spending benchmarks for similar IT support contracts can vary widely based on scope and complexity, but contracts in the hundreds of millions annually are common across agencies for broad IT services. This specific contract represents a focused investment in a critical support function.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses, nor does it appear to have explicit subcontracting requirements for small businesses mentioned. General Dynamics is a large prime contractor. The absence of small business set-aside provisions means that opportunities for small businesses to directly participate as prime contractors were limited in this specific award. However, large prime contractors like General Dynamics often engage small businesses as subcontractors, which could provide indirect opportunities.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the General Services Administration (GSA). The contract's performance would be monitored through regular reporting, milestone reviews, and adherence to the terms and conditions, including the Time and Materials pricing. Transparency is facilitated through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Learning Management Systems (LMS) Support
IT Program Management Support
Computer Systems Design Services
General Services Administration IT Contracts
Defense Training Systems Support

Risk Flags

Potential for cost overruns due to T&M pricing.
Limited competition may lead to suboptimal pricing.
Contract duration could be long for evolving IT needs.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $21.7 million to GENERAL DYNAMICS ONE SOURCE LLC. IGF::OT::IGF: LEARNING ASSET AND SYSTEMS PROGRAM SUPPORT

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS ONE SOURCE LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $21.7 million.

What is the period of performance?

Start: 2014-07-23. End: 2019-07-22.

What is the track record of General Dynamics One Source LLC with federal contracts, particularly in IT support?

General Dynamics One Source LLC, a subsidiary of General Dynamics, has a significant track record with federal contracts, primarily in IT services, defense, and aerospace. They have been awarded numerous contracts across various agencies, including the Department of Defense, GSA, and others, for a wide range of services such as IT modernization, cybersecurity, systems integration, and program support. Their experience often involves large-scale, complex projects. For learning asset and systems program support, their history suggests a capability to manage and deliver on such requirements, often leveraging their extensive resources and established processes. Performance on past contracts, while generally positive, can vary, and specific contract performance data would need to be reviewed for a detailed assessment.

How does the Time and Materials (T&M) pricing structure compare to other contract types for similar IT support services?

Time and Materials (T&M) pricing is a flexible contract type where the contractor is reimbursed for direct labor hours at specified hourly rates and for the actual cost of materials. This contrasts with fixed-price contracts, where a total price is agreed upon upfront, or cost-plus contracts, where costs are reimbursed plus a negotiated profit. For IT support services, T&M can be advantageous when the scope of work is not well-defined or is expected to change frequently, allowing for adaptability. However, it carries a higher risk for the government, as costs can escalate if not carefully managed and monitored. Fixed-price contracts offer more cost certainty but require a very well-defined scope. Cost-plus contracts are typically used for research and development where outcomes are uncertain. For routine IT support, T&M can be efficient if managed diligently, but it requires robust oversight to prevent overruns.

What are the potential risks associated with a limited number of bidders (3) in a full and open competition?

A limited number of bidders, even in a full and open competition, can indicate several potential risks. Firstly, it might suggest a concentrated market where only a few companies possess the specific expertise or capabilities required, potentially leading to less competitive pricing. Secondly, high barriers to entry, such as stringent pre-qualification requirements or complex proposal processes, could deter other potential bidders. Thirdly, if the contract is perceived as less lucrative or overly burdensome, fewer companies might choose to compete. For taxpayers, this can translate into higher costs than might be achieved with broader competition. It also increases the government's reliance on a smaller pool of contractors, potentially impacting future competition and innovation.

What is the typical annual spending for IT systems design and integration services by the federal government?

Federal spending on IT systems design and integration services is substantial and consistently ranks among the largest categories of government procurement. Annually, the U.S. federal government spends tens of billions of dollars on IT services, encompassing a wide array of needs from software development and systems integration to cloud computing and cybersecurity. Specific figures fluctuate year to year and depend on agency priorities and budget allocations. For instance, in recent fiscal years, total federal IT spending has often exceeded $100 billion, with a significant portion allocated to services like those provided under this contract (NAICS 541512). This contract's value of approximately $4.34 million annually falls within the mid-range for specialized IT support services when viewed against the backdrop of overall federal IT expenditures.

How does the 'Delivery Order' award type impact the overall contract value and flexibility?

A Delivery Order is a type of task order issued under an indefinite-delivery, indefinite-quantity (IDIQ) contract or a basic ordering agreement (BOA). This means the contract establishes terms and conditions, but specific quantities and delivery schedules are defined in individual orders. For this contract, the $21.7 million represents the total potential value across all delivery orders issued over its duration. The award type provides flexibility for the government to order services as needed, up to the contract's ceiling. It allows for phased implementation and adaptation to changing requirements. For the contractor, it offers a potential stream of work but with less certainty than a firm-fixed-price contract for a specific quantity. The value of each delivery order is typically capped, and the total value of all orders cannot exceed the contract ceiling.

Industry Classification

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

Product/Service Code: EDUCATION AND TRAINING › EDUCATION AND TRAINING SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: ID03140003

Offers Received: 3

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 3211 JERMANTOWN ROAD, FAIRFAX, VA, 22030

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $39,198,700

Exercised Options: $37,899,897

Current Obligation: $21,706,611

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $393,239

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q09BGD0030

IDV Type: GWAC

Timeline