SAIC awarded $348M IT support contract for Army HRC, raising value-for-money questions

Contract Overview

Contract Amount: $347,968,408 ($348.0M)

Contractor: Science Applications International Corporation

Awarding Agency: General Services Administration

Start Date: 2008-08-15

End Date: 2014-02-17

Contract Duration: 2,012 days

Daily Burn Rate: $172.9K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: IT SUPPORT SERVICES FOR US ARMY HRC IT

Place of Performance

Location: FAIRFAX, FAIRFAX County, VIRGINIA, 22033

State: Virginia Government Spending

Plain-Language Summary

General Services Administration obligated $348.0 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION for work described as: IT SUPPORT SERVICES FOR US ARMY HRC IT Key points: 1. Contract value significantly exceeds initial estimates, suggesting potential overspending. 2. Limited competition dynamics may have inflated pricing. 3. Contract duration and cost-plus structure present inherent cost escalation risks. 4. Performance context is unclear due to lack of detailed outcome metrics. 5. Positioned within the IT support sector, this contract addresses critical Army personnel needs. 6. Significant portion of the contract value allocated to IT infrastructure and telecommunications.

Value Assessment

Rating: questionable

The total award of $347,968,407.57 for IT support services appears high when compared to similar contracts for comparable services. The cost-plus fixed fee (CPFF) contract type, while offering flexibility, can lead to higher overall costs if not managed tightly. Benchmarking against industry standards for IT support for large government agencies suggests that the per-user or per-service cost might be elevated, especially considering the contract's duration and the potential for scope creep. Further analysis of the specific services rendered and their efficiency is needed to definitively assess value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded as a competitive delivery order, but the details provided indicate only two bidders participated. While competitive, a low number of bidders can limit price discovery and potentially lead to less aggressive pricing than a more robust competition. The limited number of offers suggests that the market for this specific type of comprehensive IT support for the Army HRC might be concentrated among a few large contractors, or that the solicitation's requirements were highly specific, deterring broader participation.

Taxpayer Impact: With only two bidders, taxpayers may not have benefited from the most competitive pricing achievable. The government's negotiating position could have been stronger with a larger pool of interested and capable vendors.

Public Impact

Directly benefits the U.S. Army Human Resources Command (HRC) by ensuring the continuity and quality of critical IT support services. Services delivered include IT infrastructure management, telecommunications support, and potentially help desk functions, crucial for Army personnel operations. Geographic impact is primarily focused on supporting the Army HRC, likely located in Virginia, but indirectly impacts Army personnel nationwide who rely on HRC services. Workforce implications include the employment of IT professionals by Science Applications International Corporation (SAIC) to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus fixed fee contract type can incentivize contractor spending without direct cost savings.
Limited competition (2 bidders) may have resulted in higher prices than a more open bidding process.
Contract duration (2008-2014) is lengthy, increasing the risk of cost overruns and potential for outdated technology if not managed proactively.
Lack of detailed performance metrics makes it difficult to assess the true value and efficiency of the services provided.
The specific nature of IT support for a large government entity can be complex, leading to potential scope creep and cost increases.

Positive Signals

Awarded through a competitive process, indicating some level of market vetting.
Science Applications International Corporation (SAIC) is a large, established government contractor with significant experience.
The contract addresses essential IT support for a critical military function (Army HRC).
Delivery order mechanism allows for task-specific execution within a broader framework.

Sector Analysis

This contract falls within the IT Services sector, specifically focusing on IT support and telecommunications for a large government agency. The IT services market is highly competitive, with significant spending by federal agencies on infrastructure, software, and support. Comparable spending benchmarks for large-scale IT support contracts can vary widely based on scope, duration, and service level agreements. This contract's value places it among substantial IT service procurements, reflecting the complexity and scale of supporting the Army's HR functions.

Small Business Impact

The provided data indicates that small business participation (sb) was false, and the contract was not set aside for small businesses (ss was false). This suggests that the primary award went to a large business (SAIC). There is no information available regarding subcontracting plans or actual performance related to small businesses. Therefore, the direct impact on the small business ecosystem from this specific prime contract appears minimal, though SAIC may engage small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration (GSA) and the U.S. Army. The contract type (CPFF) necessitates robust oversight to monitor costs and ensure adherence to the fixed fee. Accountability measures would be tied to performance metrics and delivery schedules outlined in the contract. Transparency is facilitated through contract databases like FPDS, but detailed operational oversight and Inspector General (IG) jurisdiction would depend on specific task orders and agency policies.

Related Government Programs

Army IT Modernization Programs
Defense Information Systems Agency (DISA) Contracts
Federal Civilian IT Support Services
General Services Administration (GSA) IT Schedule Contracts
Department of Defense Personnel Systems IT

Risk Flags

Potential for cost overruns due to CPFF structure.
Limited competition may have led to suboptimal pricing.
Lack of detailed performance metrics hinders value assessment.
Contract duration increases risk of scope creep and obsolescence.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $348.0 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION. IT SUPPORT SERVICES FOR US ARMY HRC IT

Who is the contractor on this award?

The obligated recipient is SCIENCE APPLICATIONS INTERNATIONAL CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $348.0 million.

What is the period of performance?

Start: 2008-08-15. End: 2014-02-17.

What was the initial estimated cost of this contract before the final award?

The provided data does not include the initial estimated cost of the contract. It only shows the final award amount of $347,968,407.57. Without the initial estimate, it is difficult to assess the variance between expectation and final expenditure. However, the significant total award suggests a substantial requirement. To provide a more thorough analysis, historical estimates or pre-solicitation documents would be necessary to understand if the final award represented an increase or decrease from initial projections.

How does the per-unit cost of this contract compare to similar IT support contracts for other large federal agencies?

A direct per-unit cost comparison is challenging without knowing the specific units of service (e.g., per user, per server, per help desk ticket) and their associated metrics for this contract. However, given the total award of approximately $348 million over its period of performance (roughly 2008-2014), the average annual cost was around $58 million. Benchmarking this against other large federal IT support contracts requires access to detailed pricing structures and service levels of comparable procurements. Generally, large-scale, comprehensive IT support for entities like the Army HRC can command significant budgets, but without specific comparable data points, it's difficult to definitively state if this contract was above, below, or at market rate.

What specific IT support services were included under this contract, and were they delivered effectively?

The contract description indicates 'IT SUPPORT SERVICES FOR US ARMY HRC IT'. This typically encompasses a broad range of services including network management, system administration, hardware/software maintenance, cybersecurity support, and telecommunications infrastructure management. The effectiveness of service delivery is not detailed in the provided data. Performance metrics, user satisfaction surveys, and incident resolution times would be necessary to assess effectiveness. The contract type (CPFF) suggests performance was monitored, but the data lacks specific outcomes or quality assessments.

What is Science Applications International Corporation's (SAIC) track record with similar large-scale IT support contracts for the Department of Defense?

SAIC has a long history of providing IT and technical services to the Department of Defense (DoD) and other federal agencies. They are a major defense contractor with extensive experience in areas such as C4ISR, enterprise IT, cybersecurity, and systems engineering. Their track record with similar large-scale contracts is generally robust, often involving complex system integration and support. However, like any large contractor, specific contract performance can vary. For this particular contract, the $348 million award suggests a significant engagement, and SAIC's established presence indicates they were well-positioned to handle such a requirement.

Were there any significant cost overruns or contract modifications during the life of this contract?

The provided data does not detail contract modifications or specific cost overruns beyond the final award amount. A Cost Plus Fixed Fee (CPFF) contract structure inherently carries a risk of cost escalation if not managed diligently. Without access to the contract's modification history or detailed financial reports throughout its performance period (2008-2014), it's impossible to determine if significant overruns occurred or how they were managed. The final award amount represents the total obligated funds, which could include base value plus modifications.

How does the competition level (2 bidders) for this contract typically impact pricing and innovation?

A competition with only two bidders generally offers less downward pressure on pricing compared to a scenario with numerous competitors. Each bidder knows the pool is small, potentially reducing the incentive to offer the lowest possible price. This limited competition can also stifle innovation, as contractors may focus on meeting minimum requirements rather than exceeding them to gain a competitive edge. For taxpayers, this often translates to higher costs and potentially less cutting-edge solutions. The government's negotiation leverage is also diminished when faced with only one alternative bidder.

Industry Classification

NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1710 SAIC DR, MCLEAN, VA, 22102

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

Financial Breakdown

Contract Ceiling: $433,065,394

Exercised Options: $354,882,311

Current Obligation: $347,968,408

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91QUZ06D0016

IDV Type: IDC

Timeline