DoD's $411.9M IT contract to General Dynamics IT awarded without competition, raising value concerns

Contract Overview

Contract Amount: $411,885,363 ($411.9M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2004-02-20

End Date: 2012-04-06

Contract Duration: 2,968 days

Daily Burn Rate: $138.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: IT

Official Description: 200412!002158!9700!HC1013!DEFENSE INFO. TECHNOLOGY CONTRAC!HC101304C5000 !A!N! !Y! ! !20040220!20081231!031172955!003242013!009581091!N!CSC SYSTEMS & SOLUTIONS LLC !15000 CONFERENCE CENTER DR!CHANTILLY !VA!20151!14744!059!51!CHANTILLY !FAIRFAX !VIRGINIA !+000022815169!N!N!000000000000!D399!OTHER ADP & TELECOMMUNICATION SERVICES !S1 !SERVICES !000 !* !541618!E! !3! ! ! ! ! !99990909!B!F!Y!A! !D!N!R!1!001!N!1G!Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! !IAIP !0001! !

Place of Performance

Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $411.9 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: 200412!002158!9700!HC1013!DEFENSE INFO. TECHNOLOGY CONTRAC!HC101304C5000 !A!N! !Y! ! !20040220!20081231!031172955!003242013!009581091!N!CSC SYSTEMS & SOLUTIONS LLC !15000 CONFERENCE CENTER DR!CHANTILLY !VA!20151!14744!059!51!CHANTILLY !FAIR… Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Significant contract value of over $411 million raises questions about cost-effectiveness without competitive bidding. 3. Performance risk appears moderate, given the contract's duration and the nature of IT services. 4. The contract falls under 'Other Management Consulting Services,' a broad category that may obscure specific service value. 5. Awarded to a single large contractor, General Dynamics Information Technology, Inc., indicating a lack of small business participation. 6. The contract's long duration (nearly 8 years) suggests a need for ongoing, specialized IT support.

Value Assessment

Rating: questionable

The contract's total value of $411.9 million over its nearly 8-year period is substantial. Without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar contracts. The 'COST PLUS AWARD FEE' (CPAF) contract type can lead to cost overruns if not managed tightly, as the contractor is reimbursed for costs plus a fee that can be adjusted based on performance. This structure, combined with the lack of competition, raises concerns about achieving optimal value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one source is capable of meeting the agency's needs, or in cases of urgent need. The lack of competition means that multiple bidders were not evaluated, and the agency did not benefit from the price reductions and service innovations that often arise from a competitive procurement process.

Taxpayer Impact: For taxpayers, a sole-source award means there is a higher risk of paying a premium for services. Without the pressure of competition, the contractor may not have the same incentive to offer the lowest possible price, potentially leading to less efficient use of public funds.

Public Impact

The primary beneficiary is the Department of Defense, which receives essential IT services. Services delivered include 'Other Management Consulting Services,' likely encompassing a range of IT support, system integration, and advisory functions. The geographic impact is likely nationwide within DoD operations, supporting various military branches and agencies. Workforce implications include the employment of personnel by General Dynamics Information Technology, Inc. to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
Cost-plus-award-fee structure requires diligent oversight to prevent cost overruns.
Lack of small business participation means limited opportunities for smaller, innovative firms.
Broad service category ('Other Management Consulting Services') may lack specificity for performance evaluation.
Long contract duration could indicate a lack of flexibility to adapt to changing technological needs.

Positive Signals

Awarded to a large, established contractor (General Dynamics IT) with a significant presence in the defense IT sector.
Contract duration suggests a stable, long-term need for the services provided.
The contract is for essential IT services supporting defense operations.
The agency (DISA) is responsible for critical defense information infrastructure.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically under 'Other Management Consulting Services.' The IT services market for the federal government is vast, with significant spending allocated to defense-related IT. Contracts of this magnitude are common within large federal agencies like the Department of Defense, which rely heavily on external contractors for specialized IT expertise and support. Benchmarking this spending against similar large-scale IT support contracts within the defense sector would be necessary for a comprehensive value assessment.

Small Business Impact

The contract data indicates that this was not a small business set-aside, and the prime contractor is a large business. There is no explicit information regarding subcontracting plans for small businesses. Given the sole-source nature and the prime contractor's size, it is unlikely that small businesses were significantly involved in the primary award, potentially limiting their opportunities to participate in this specific contract's execution.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense, specifically the contracting officers and program managers within the Defense Information Systems Agency (DISA). As a Cost Plus Award Fee (CPAF) contract, performance metrics and cost controls would be critical areas of oversight. Transparency is generally facilitated through contract award databases, but detailed performance reports and cost breakdowns may not be publicly available. Inspector General (IG) offices within DoD would have jurisdiction to investigate any potential fraud, waste, or abuse.

Related Government Programs

Defense Information Technology Contracts
IT Services for Department of Defense
Management Consulting Services Federal Contracts
Sole Source IT Procurements
Cost Plus Award Fee Contracts

Risk Flags

Sole-source award
Cost-plus-award-fee structure
Lack of competition
High contract value
Broad service category

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $411.9 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. 200412!002158!9700!HC1013!DEFENSE INFO. TECHNOLOGY CONTRAC!HC101304C5000 !A!N! !Y! ! !20040220!20081231!031172955!003242013!009581091!N!CSC SYSTEMS & SOLUTIONS LLC !15000 CONFERENCE CENTER DR!CHANTILLY !VA!20151!14744!059!51!CHANTILLY !FAIRFAX !VIRGINIA !+000022815169!N!N!000000000000!D399!OTHER ADP & TELECOMMUNICATION SERVICES !S1 !SERVICES !000 !* !541618!E! !3! ! ! ! ! !999

Who is the contractor on this award?

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

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Information Systems Agency).

What is the total obligated amount?

The obligated amount is $411.9 million.

What is the period of performance?

Start: 2004-02-20. End: 2012-04-06.

What specific IT services were encompassed by 'Other Management Consulting Services' under this contract?

The classification 'Other Management Consulting Services' (NAICS code 541618) is broad and can encompass a wide array of activities. For this specific Department of Defense contract, it likely included strategic IT planning, enterprise architecture development, program management support, cybersecurity consulting, systems integration advice, and potentially policy development related to information technology. Without more granular details from the contract's statement of work, it's challenging to pinpoint the exact services. However, given the scale and the awarding agency (DISA), these services were likely critical to the functioning and modernization of defense information systems.

How does the $411.9 million contract value compare to similar IT services contracts awarded by the DoD?

The $411.9 million value for an IT services contract over nearly eight years is substantial, but not entirely uncommon for large federal agencies like the Department of Defense. However, the key differentiator here is the sole-source award. When compared to competitively awarded contracts for similar IT services, this sole-source contract may represent a less favorable price point for the government. Competitively bid contracts often result in lower per-unit costs and better overall value. To provide a precise comparison, one would need to identify comparable competitively awarded contracts with similar scope and duration within the DoD's IT spending portfolio.

What are the primary risks associated with a sole-source, cost-plus-award-fee contract of this magnitude?

The primary risks associated with this contract structure are twofold. Firstly, the sole-source nature eliminates competitive pressure, which can lead to inflated pricing and reduced incentive for efficiency. The government may be paying more than necessary. Secondly, the Cost-Plus-Award-Fee (CPAF) structure, while intended to incentivize performance, carries inherent risks. If the award fee criteria are not tightly defined and rigorously monitored, or if cost controls are lax, the contractor could incur significant costs while still achieving a high fee, leading to overall cost overruns. Effective government oversight is paramount to mitigate these risks.

What was the historical spending pattern for this specific service or requirement prior to this contract?

Analyzing historical spending patterns for this specific requirement prior to the $411.9 million contract awarded to General Dynamics Information Technology, Inc. is crucial for context. If previous contracts for similar services were competitively awarded and significantly less expensive, it would heighten concerns about the value received under this sole-source award. Conversely, if there was a documented history of sole-source awards due to unique capabilities or urgent needs, it might provide some justification, though still warranting scrutiny. Without access to prior contract data for this specific requirement, it's difficult to establish a baseline for comparison.

What is the track record of General Dynamics Information Technology, Inc. in managing large federal IT contracts?

General Dynamics Information Technology, Inc. (GDIT), now part of General Dynamics, has a long and extensive track record of managing large, complex federal IT contracts across various agencies, including the Department of Defense. They are a major player in the federal IT services market, known for handling significant programs. While their experience suggests a capability to manage large contracts, the success and value derived from any specific contract depend heavily on the contract's terms, the agency's oversight, and the specific performance requirements. Past performance reviews and contract audit data would provide a more detailed assessment of their specific track record on similar contracts.

Were there any specific justifications provided for awarding this contract on a sole-source basis?

Federal regulations typically require specific justifications for sole-source (non-competitive) contract awards. Common justifications include that only one responsible source can provide the required supplies or services, or that the agency must procure the supplies or services from a specified source for reasons of standardization and interoperability. For a contract of this magnitude and duration, a detailed justification and approval (J&A) document would have been required, outlining why competition was not feasible or practicable. This document, if publicly available, would provide the official rationale behind the sole-source decision.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Other Management Consulting Services

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Computer Sciences Corporation

Address: 15000 CONFERENCE CENTER DR, CHANTILLY, VA, 20151

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline