DHS awards $332M to General Dynamics for USCIS IT sustainment, raising value-for-money questions

Contract Overview

Contract Amount: $332,003,181 ($332.0M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2011-08-14

End Date: 2015-09-25

Contract Duration: 1,503 days

Daily Burn Rate: $220.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: SUSTAINMENT PROGRAM APPLICATION SUPPORT - EAGLE TO

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20001

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $332.0 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: SUSTAINMENT PROGRAM APPLICATION SUPPORT - EAGLE TO Key points: 1. The contract's value, while substantial, necessitates a close examination of the services rendered and their alignment with agency needs. 2. Competition dynamics indicate a full and open process, which should theoretically drive competitive pricing. 3. Risk indicators are moderate, given the long duration and cost-plus contract type, which can incentivize cost overruns. 4. Performance context is crucial; understanding USCIS's IT sustainment challenges will clarify the necessity of this significant investment. 5. Sector positioning places this contract within the IT services domain, specifically focusing on facilities management and support.

Value Assessment

Rating: fair

The total award of over $332 million for IT sustainment over approximately four years suggests a significant investment. Benchmarking this against similar IT sustainment contracts for large federal agencies is essential to determine if the pricing is competitive. The Cost Plus Fixed Fee (CPFF) contract type, while offering flexibility, can sometimes lead to higher costs if not managed rigorously, as contractor profit is fixed regardless of cost efficiency. Without detailed performance metrics and cost breakdowns, a definitive value-for-money assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit offers. The number of bidders is not specified, but a full and open competition generally fosters a competitive environment. This approach aims to ensure that the government receives the best possible value by allowing a wide range of potential contractors to compete, theoretically driving down prices and improving service quality.

Taxpayer Impact: A full and open competition is generally favorable for taxpayers as it maximizes the potential for competitive pricing and encourages a broad base of contractors to vie for government work, leading to potentially lower overall costs.

Public Impact

The primary beneficiary is the U.S. Citizenship and Immigration Services (USCIS), which receives critical IT sustainment support to maintain its operational infrastructure. Services delivered include computer facilities management, ensuring the smooth functioning of IT systems essential for processing immigration applications and services. The geographic impact is primarily within the District of Columbia, where the contract is managed and likely where key personnel are located. Workforce implications may include the direct employment of IT professionals by General Dynamics Information Technology, Inc., and potentially indirect impacts on USCIS's internal IT staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus contract type can lead to less incentive for cost control compared to fixed-price contracts.
Long contract duration (over 4 years) increases the risk of scope creep and potential for cost escalation without adequate oversight.
Reliance on a single large contractor for critical IT sustainment could pose a risk if performance degrades or if the contractor faces financial instability.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process and potential for competitive pricing.
General Dynamics Information Technology, Inc. is a large, established federal contractor with significant experience in IT services.
The contract aims to provide essential sustainment for USCIS IT infrastructure, crucial for agency operations.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on computer facilities management. The federal IT services market is vast, with agencies increasingly relying on contractors for specialized support. Comparable spending benchmarks for IT sustainment contracts can vary widely based on agency size, complexity of systems, and service level agreements. This contract represents a significant portion of spending for USCIS's IT sustainment needs.

Small Business Impact

The contract details indicate 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 within this award. Therefore, the direct impact on the small business ecosystem is likely minimal unless General Dynamics Information Technology, Inc. actively pursues small business subcontractors for specific components of the work.

Oversight & Accountability

Oversight for this contract would primarily reside with the U.S. Citizenship and Immigration Services contracting officers and program managers. Accountability measures would be defined in the contract's statement of work and performance standards. Transparency is facilitated through contract award databases, but detailed performance reports and cost breakdowns may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

IT Facilities Management Services
Computer Systems Design and Related Services
IT Operations and Support Contracts
Department of Homeland Security IT Spending
USCIS IT Modernization Efforts

Risk Flags

Cost-plus contract type
Long contract duration
Potential for cost escalation
Reliance on a single large vendor

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $332.0 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. SUSTAINMENT PROGRAM APPLICATION SUPPORT - EAGLE TO

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 Homeland Security (U.S. Citizenship and Immigration Services).

What is the total obligated amount?

The obligated amount is $332.0 million.

What is the period of performance?

Start: 2011-08-14. End: 2015-09-25.

What is the track record of General Dynamics Information Technology, Inc. on similar federal IT sustainment contracts?

General Dynamics Information Technology, Inc. (GDIT) has a long history of providing IT services to various federal agencies, including extensive work in IT sustainment, infrastructure management, and modernization. They have held numerous large-scale contracts with departments such as Defense, Homeland Security, and Health and Human Services. Their track record typically involves managing complex IT environments, ensuring system availability, and supporting mission-critical applications. Performance on these contracts can vary, with some engagements receiving high marks for reliability and efficiency, while others may face scrutiny over cost management or responsiveness. A detailed review of past performance evaluations and contract close-out reports for GDIT on comparable sustainment contracts would provide a clearer picture of their capabilities and potential risks associated with this USCIS award.

How does the total award amount compare to the duration and scope of services provided?

The total award of approximately $332 million over a period of roughly four years (1503 days) translates to an average annual value of about $83 million. This figure needs to be contextualized against the specific scope of services defined in the contract, which includes Computer Facilities Management Services. Key factors to consider are the number of systems supported, the complexity of the USCIS IT infrastructure, the required service levels (e.g., uptime guarantees, response times), and the specific tasks involved, such as system maintenance, patching, monitoring, and help desk support. Without a detailed breakdown of the statement of work and associated labor categories and hours, it is difficult to definitively assess whether $83 million annually represents a fair price for the services rendered. Benchmarking against industry standards for IT sustainment of similar scale and complexity is crucial for a comprehensive value assessment.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for IT sustainment?

The Cost Plus Fixed Fee (CPFF) contract type, used here, presents specific risks for IT sustainment. In a CPFF arrangement, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing their profit. While the fee is fixed, the contractor has less financial incentive to control costs compared to fixed-price contracts, as their profit margin remains constant regardless of how efficiently they manage expenses. This can potentially lead to cost overruns if not meticulously monitored. For IT sustainment, where unforeseen technical issues or system complexities can arise, the CPFF structure might encourage the contractor to incur higher costs to ensure service delivery, potentially at the government's expense. Robust oversight, detailed cost tracking, and clear performance metrics are essential to mitigate these risks and ensure the government receives good value.

How has USCIS's IT sustainment spending trended historically, and does this contract represent an increase or decrease?

Analyzing historical spending patterns for USCIS IT sustainment is critical to understanding the context of this $332 million award. Without access to USCIS's specific historical budget data and contract awards for IT sustainment, a direct comparison is challenging. However, federal IT spending has generally been on an upward trend, driven by the need to modernize legacy systems, enhance cybersecurity, and support increasing digital service demands. If USCIS has been undergoing significant IT modernization or expansion, this contract could represent a necessary investment. Conversely, if historical spending was lower, this award might indicate a shift in strategy or an increase in the scope of outsourced IT sustainment. Examining prior contracts for similar services, their values, and durations would reveal whether this award is an anomaly or part of a consistent spending trajectory.

What are the implications of awarding a long-term IT sustainment contract to a single large vendor like General Dynamics?

Awarding a long-term IT sustainment contract, such as this one spanning over four years, to a single large vendor like General Dynamics Information Technology, Inc. has several implications. Positively, it can offer stability, continuity of service, and leverage the vendor's extensive resources and expertise. This can be particularly beneficial for complex IT environments requiring deep institutional knowledge. However, it also introduces risks. A long-term sole-source or dominant-vendor relationship can reduce competitive pressure over time, potentially leading to complacency or less aggressive pricing in future renewals or modifications. It also creates a dependency; if the vendor's performance falters or if they face financial difficulties, the agency's operations could be significantly disrupted. Furthermore, it may limit opportunities for smaller, innovative firms to enter the market and provide specialized solutions.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HSSCCG-11-R-00012

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 4151 LAFAYETTE CENTER DR STE 700, CHANTILLY, VA, 20151

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $358,144,819

Exercised Options: $330,111,946

Current Obligation: $332,003,181

Subaward Activity

Number of Subawards: 20

Total Subaward Amount: $156,598,839

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HSHQDC06D00021

IDV Type: IDC

Timeline