General Dynamics IT awarded $525M contract for TSA IT infrastructure transition, facing limited competition

Contract Overview

Contract Amount: $524,998,911 ($525.0M)

Contractor: General Dynamics Information Technology Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2015-04-01

End Date: 2019-02-25

Contract Duration: 1,426 days

Daily Burn Rate: $368.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF PROVIDE SUPPORT SERVICES FOR INFORMATION TECHNOLOGY INFRASTRUCTURE PROGRAM FOR TRANSISTION OF FAMS/TSA. NOTE: THIS IS A HYBRID: FIRM FIXED PRICE AND T&M. THIS PROCUREMENT IS FOR THE TRANSITION OF EXISTING TSA IT INFRASTRUCTURE PROGRAM REQUIREMENTS, CURRENTLY PROVIDED THROUGH THE CSC ITIP CONTRACT, TO A BRIDGE CONTRACT.

Place of Performance

Location: ARLINGTON, LOUDOUN County, VIRGINIA, 20598

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $525.0 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY INC. for work described as: IGF::OT::IGF PROVIDE SUPPORT SERVICES FOR INFORMATION TECHNOLOGY INFRASTRUCTURE PROGRAM FOR TRANSISTION OF FAMS/TSA. NOTE: THIS IS A HYBRID: FIRM FIXED PRICE AND T&M. THIS PROCUREMENT IS FOR THE TRANSITION OF EXISTING TSA IT INFRASTRUCTURE PROGRAM REQUIREMENTS, CURRENT… Key points: 1. Contract value of $525M over nearly four years indicates significant investment in IT infrastructure. 2. The procurement was conducted under full and open competition, suggesting a broad search for qualified bidders. 3. The hybrid contract type (Firm Fixed Price and Time & Materials) introduces complexity in cost management. 4. The transition of existing requirements from CSC ITIP contract highlights a focus on continuity of operations. 5. The contract's duration of 1426 days suggests a long-term commitment to supporting TSA's IT needs. 6. The primary contractor, General Dynamics Information Technology Inc., has a substantial presence in federal IT services.

Value Assessment

Rating: fair

The contract value of $525M for IT support services over approximately four years appears substantial. Benchmarking this against similar large-scale IT infrastructure transition contracts is challenging without more granular data on the specific services provided. The hybrid nature of the contract (Firm Fixed Price and Time & Materials) can lead to cost overruns if not managed carefully, particularly in the T&M components. The pricing structure needs careful scrutiny to ensure value for money, especially considering the transition from a previous contract.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This procurement was conducted under full and open competition, indicating that all responsible sources were permitted to submit offers. While the specific number of bidders is not provided, this approach generally fosters a competitive environment, which can lead to better pricing and service offerings. The success of the competition in driving down costs or improving service quality would depend on the number and capability of the participating firms.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it maximizes the pool of potential contractors, increasing the likelihood of receiving competitive bids and potentially lower prices.

Public Impact

The Transportation Security Administration (TSA) is the primary beneficiary, receiving critical IT infrastructure support services. The contract ensures the continuity of essential IT services for TSA operations, impacting national security and transportation efficiency. Services include support for the Information Technology Infrastructure Program, crucial for TSA's day-to-day functions. The contract is geographically focused within Virginia, where the contractor is based, but its impact is national through TSA's mission. The contract supports a significant IT workforce, likely involving skilled personnel in system administration, network engineering, and cybersecurity.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The hybrid contract structure (FFP/T&M) presents a risk of cost escalation, particularly in the T&M components if not closely monitored.
Transitioning IT infrastructure can be complex, carrying inherent risks of service disruption or performance degradation if not managed meticulously.
Reliance on a single large prime contractor for critical IT infrastructure could pose a risk if the contractor faces financial or operational challenges.

Positive Signals

The use of full and open competition suggests a robust process to identify capable contractors and potentially achieve competitive pricing.
The contract's focus on transitioning existing requirements implies a commitment to maintaining operational stability for TSA.
The substantial contract value indicates a significant investment in ensuring reliable and effective IT infrastructure for a critical agency.

Sector Analysis

This contract falls within the Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services sector (NAICS 518210). This sector is vital for government operations, providing the backbone for data management, communication, and application hosting. The market is characterized by large, established IT service providers capable of handling complex, large-scale government contracts. Spending in this area is consistently high across federal agencies as they modernize and maintain their digital infrastructure.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). While the prime contractor is a large entity, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting would depend on the prime contractor's strategy and any specific requirements outlined in the contract, which are not detailed here.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program officials within the Transportation Security Administration (TSA) and the Department of Homeland Security (DHS). The hybrid nature of the contract necessitates diligent monitoring of both fixed-price deliverables and time-and-materials expenditures. Transparency would be enhanced through regular reporting requirements and potential audits by the DHS Office of Inspector General, particularly concerning the T&M components.

Related Government Programs

TSA IT Infrastructure Modernization Programs
DHS Information Technology Services
Federal Cloud Computing Strategy Initiatives
Government Wide IT Infrastructure Support Contracts

Risk Flags

Hybrid Contract Type Risk
IT Transition Complexity
Potential for Cost Overruns (T&M component)
Dependency on Prime Contractor Performance

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $525.0 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY INC.. IGF::OT::IGF PROVIDE SUPPORT SERVICES FOR INFORMATION TECHNOLOGY INFRASTRUCTURE PROGRAM FOR TRANSISTION OF FAMS/TSA. NOTE: THIS IS A HYBRID: FIRM FIXED PRICE AND T&M. THIS PROCUREMENT IS FOR THE TRANSITION OF EXISTING TSA IT INFRASTRUCTURE PROGRAM REQUIREMENTS, CURRENTLY PROVIDED THROUGH THE CSC ITIP CONTRACT, TO A BRIDGE CONTRACT.

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 (Transportation Security Administration).

What is the total obligated amount?

The obligated amount is $525.0 million.

What is the period of performance?

Start: 2015-04-01. End: 2019-02-25.

What was the specific rationale for choosing a hybrid Firm Fixed Price (FFP) and Time & Materials (T&M) contract structure for this IT transition?

The hybrid FFP/T&M structure is often employed when a contract involves a mix of well-defined services and those with uncertain scope or effort. For an IT infrastructure transition, the FFP component might cover the fixed deliverables like system setup, migration planning, or initial deployment phases where costs and timelines are predictable. The T&M component would likely be used for unforeseen issues, troubleshooting, post-transition support, or tasks where the exact labor hours are difficult to estimate upfront. This structure aims to balance cost certainty for predictable elements with flexibility for unpredictable ones, though it requires rigorous oversight of the T&M hours to prevent cost overruns.

How does the awarded value of $525M compare to historical spending on similar IT infrastructure transition contracts by TSA or DHS?

Without specific historical data on comparable TSA or DHS IT transition contracts, a direct comparison is difficult. However, $525 million over approximately four years represents a significant investment, averaging over $130 million annually. This figure suggests a large-scale, complex transition involving substantial infrastructure, numerous users, and critical operational requirements. Agencies often undertake such large procurements when consolidating systems, migrating to new platforms, or significantly upgrading existing capabilities. The value is indicative of the scope and criticality of the IT services being transitioned.

What are the key performance indicators (KPIs) used to measure the success of this IT infrastructure transition contract?

Key performance indicators for such an IT transition contract would likely focus on several critical areas. These typically include system availability and uptime, performance metrics (e.g., response times, throughput), successful migration of data and applications within defined windows, adherence to security protocols and compliance standards, and user satisfaction post-transition. Additionally, timeliness of task completion, adherence to budget (especially for T&M components), and effective incident response times would be crucial. The contract likely specifies Service Level Agreements (SLAs) with measurable targets for these KPIs.

What is the track record of General Dynamics Information Technology Inc. in managing large-scale IT transition projects for federal agencies?

General Dynamics Information Technology Inc. (GDIT) has a long and extensive track record of managing large-scale IT programs and transitions for numerous federal agencies, including the Department of Defense, NASA, and various civilian departments. They have experience in areas such as enterprise IT modernization, cloud migration, cybersecurity, and infrastructure support. Their history includes both successes and challenges, as is common with large government contractors. Evaluating their specific performance on similar TSA or DHS transition projects would provide a more precise assessment of their capabilities and risks for this particular contract.

What are the potential risks associated with the transition of IT infrastructure from CSC ITIP to this new bridge contract?

The primary risks associated with transitioning IT infrastructure include service disruption, data loss or corruption during migration, security vulnerabilities introduced during the transition phase, and potential performance degradation of critical systems. There's also a risk of scope creep, especially if the 'bridge' nature of the contract leads to unforeseen requirements or extended support needs. Ensuring seamless knowledge transfer from the incumbent contractor (CSC) to the new provider (GDIT) is crucial. Inadequate planning, testing, or resource allocation can exacerbate these risks, potentially impacting TSA's operational effectiveness.

How does the $525M contract value align with the overall IT spending trends within the Department of Homeland Security?

The Department of Homeland Security (DHS) is a major federal IT spender, with significant investments in cybersecurity, data analytics, infrastructure modernization, and operational systems. A $525 million contract for IT infrastructure transition, while substantial, likely represents a portion of DHS's overall annual IT budget, which can run into billions of dollars. This contract's value aligns with the agency's need to maintain and upgrade complex IT systems supporting its diverse missions, including transportation security. It reflects the ongoing trend of federal agencies investing heavily in IT to enhance efficiency, security, and mission capabilities.

Industry Classification

NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related 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

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 3170 FAIRVIEW PARK DR, FALLS CHURCH, VA, 22042

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

Financial Breakdown

Contract Ceiling: $547,313,361

Exercised Options: $524,998,911

Current Obligation: $524,998,911

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $8,039,793

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: HSHQDC13DE2090

IDV Type: IDC

Timeline