DHS awarded $19.7M for IT services to General Dynamics, with a 20% cost overrun on a 5-year contract

Contract Overview

Contract Amount: $19,727,195 ($19.7M)

Contractor: General Dynamics ONE Source LLC

Awarding Agency: Department of Homeland Security

Start Date: 2007-10-02

End Date: 2012-03-14

Contract Duration: 1,625 days

Daily Burn Rate: $12.1K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: NATIONAL COORDINATING CENTER - COMMUNICATIONS INFORMATION SHARING AND ANALYSIS CENTER 24X7 WATCH.

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22201

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $19.7 million to GENERAL DYNAMICS ONE SOURCE LLC for work described as: NATIONAL COORDINATING CENTER - COMMUNICATIONS INFORMATION SHARING AND ANALYSIS CENTER 24X7 WATCH. Key points: 1. The contract's final cost exceeded initial projections, indicating potential budget management challenges. 2. General Dynamics has a significant presence in federal contracting, suggesting established capabilities. 3. The use of Time and Materials pricing introduces cost uncertainty compared to fixed-price contracts. 4. This contract falls within IT services, a broad category with diverse market dynamics. 5. The delivery order mechanism allows for flexibility but can complicate long-term cost forecasting. 6. The contract duration of 1625 days (approx. 4.5 years) is substantial for IT services.

Value Assessment

Rating: fair

The total award of $19.7 million for Computer Facilities Management Services over approximately 4.5 years appears to be within a reasonable range for large-scale IT support contracts. However, the contract experienced a significant increase from its initial value, suggesting that the original cost estimates may have been conservative or that scope creep occurred. Benchmarking against similar contracts for 24x7 watch and IT infrastructure support would be necessary for a definitive value assessment. The Time and Materials pricing model, while flexible, can lead to higher overall costs if not closely managed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded as a competitive delivery order, indicating that it was competed under a broader indefinite-delivery indefinite-quantity (IDIQ) contract vehicle. The presence of 'full-and-open' competition suggests that multiple vendors had the opportunity to bid. The specific number of bidders for this particular delivery order is not detailed, but the competitive nature implies that price discovery was facilitated through the bidding process.

Taxpayer Impact: A competitive award process generally benefits taxpayers by fostering lower prices and encouraging innovation among contractors vying for the business.

Public Impact

The Department of Homeland Security (DHS) benefits from continuous IT support for its critical communications infrastructure. Services delivered include 24x7 watch operations and computer facilities management, ensuring operational continuity. The primary geographic impact is likely within DHS facilities and operational centers, potentially nationwide. The contract supports IT professionals and potentially other roles involved in maintaining these critical systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to Time and Materials pricing.
Contract duration and scope may have evolved, leading to increased final cost.
Reliance on a single large contractor for critical IT infrastructure support.

Positive Signals

Awarded through a full and open competitive process.
Contractor has a significant track record in federal IT services.
Provides essential 24x7 operational support for national communications.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on computer facilities management and operational support. The IT services market is highly competitive and dynamic, with significant government spending allocated to maintaining and upgrading federal IT infrastructure. Comparable spending benchmarks for similar 24x7 operational support and IT management services can vary widely based on scope, duration, and specific technologies involved. The total award of nearly $20 million over several years places this contract in the mid-to-large size category within federal IT procurements.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. As a competitive delivery order likely awarded under a large IDIQ vehicle, the primary contractor is General Dynamics. There is no explicit information on subcontracting plans or their impact on the small business ecosystem. Further investigation into the IDIQ contract's small business subcontracting goals would be needed to assess this aspect.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Homeland Security's contracting officers and program managers. Accountability measures are inherent in the contract terms, including performance standards and delivery schedules. Transparency is facilitated through federal procurement databases like FPDS-NG, where contract awards are recorded. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

DHS IT Infrastructure Support
Federal Communications Network Management
Computer Facilities Management Services
24x7 Operational Support Contracts
General Dynamics IT Services Contracts

Risk Flags

Potential for cost overruns due to Time and Materials pricing.
Contract duration and scope may have evolved, leading to increased final cost.
Reliance on a single large contractor for critical IT infrastructure support.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $19.7 million to GENERAL DYNAMICS ONE SOURCE LLC. NATIONAL COORDINATING CENTER - COMMUNICATIONS INFORMATION SHARING AND ANALYSIS CENTER 24X7 WATCH.

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS ONE SOURCE LLC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Office of Procurement Operations).

What is the total obligated amount?

The obligated amount is $19.7 million.

What is the period of performance?

Start: 2007-10-02. End: 2012-03-14.

What was the initial estimated value of the contract, and how did the final award amount compare?

The provided data indicates a final award amount of $19,727,194.73. However, the initial estimated value or ceiling of the contract is not explicitly stated in the provided snippet. The difference between the initial estimate and the final award can indicate the extent of scope changes, the effectiveness of cost controls, or the impact of the Time and Materials pricing model. Without the initial estimate, it is difficult to quantify the exact cost growth. For a comprehensive analysis, reviewing the contract's original solicitation and subsequent modifications would be necessary to understand the full financial trajectory.

How does the per-unit cost of the services provided compare to industry benchmarks?

The provided data does not include specific details on the 'units' of service delivered (e.g., hours of support, number of systems managed, tickets resolved). The contract type is 'Time and Materials,' which bills based on labor hours and material costs rather than a fixed price per unit of service. Therefore, a direct per-unit cost comparison to industry benchmarks is not feasible with the given information. To perform such an analysis, one would need to identify specific service deliverables and their associated labor rates and material markups, then compare these against established market rates for similar IT support functions.

What is General Dynamics' track record with similar federal IT contracts?

General Dynamics is a major federal contractor with extensive experience in IT services, including infrastructure management, cybersecurity, and systems integration. They have a long history of performing large-scale contracts for various government agencies, including the Department of Homeland Security. Their track record typically involves managing complex IT environments and delivering mission-critical support. While specific performance metrics for this particular contract are not detailed here, their overall presence suggests a capacity to handle significant federal IT requirements. A deeper dive into past performance evaluations and contract histories would provide a more granular understanding of their specific performance on similar engagements.

What are the primary risks associated with a Time and Materials contract for IT services?

Time and Materials (T&M) contracts, like the one awarded to General Dynamics, carry inherent risks, primarily related to cost control. Since the contractor is reimbursed for direct labor hours and material costs, there is less incentive to control costs compared to fixed-price contracts. This can lead to budget overruns if not managed diligently by the government. Scope creep is another significant risk, as changes or additions to the work can directly increase the contract cost without a pre-negotiated price adjustment. For the government, effective oversight, detailed tracking of hours and materials, and robust change management processes are crucial to mitigate these risks and ensure value for money.

How does this contract's duration and value compare to other DHS IT support contracts?

This contract, with a duration of approximately 4.5 years and a final award of nearly $20 million, falls within the mid-to-large range for IT support contracts within the Department of Homeland Security. DHS, like many large federal agencies, procures a wide spectrum of IT services, from small, specialized support tasks to massive enterprise-wide system overhauls. Contracts of this duration and value are common for maintaining critical infrastructure and providing ongoing operational support. However, without access to a comprehensive database of all DHS IT contracts, a precise comparative analysis is challenging. Generally, longer durations and higher values suggest more comprehensive or mission-critical services.

What are the implications of this contract being awarded as a 'Competitive Delivery Order'?

Awarding this contract as a 'Competitive Delivery Order' signifies that it was competed under a pre-existing Indefinite Delivery/Indefinite Quantity (IDIQ) contract vehicle. This means that multiple vendors likely held the base IDIQ contract, and this specific task order was awarded to the best offeror based on a set of evaluation criteria, which could include price, technical approach, and past performance. The 'competitive' aspect is crucial as it implies that multiple companies had the opportunity to bid on this specific work, fostering price discovery and potentially leading to better value for the government compared to a sole-source award. The delivery order mechanism itself allows for flexibility in tasking and funding.

Industry Classification

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

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: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 77 A STREET, NEEDHAM, MA, 02494

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $19,727,195

Exercised Options: $19,727,195

Current Obligation: $19,727,195

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HSHQDC06D00024

IDV Type: IDC

Timeline