Interior's $24.6M Cloud Hosting Contract Awarded to General Dynamics IT Under Full and Open Competition

Contract Overview

Contract Amount: $24,623,081 ($24.6M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of the Interior

Start Date: 2016-12-16

End Date: 2026-01-31

Contract Duration: 3,333 days

Daily Burn Rate: $7.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: IGF::OT::IGF MICROPACT SOFTWARE AS A SERVICE/PLATFORM AS A SERVICE-FOUNDATION CLOUD HOSTING SERVICES

Place of Performance

Location: CARY, WAKE County, NORTH CAROLINA, 27513

State: North Carolina Government Spending

Plain-Language Summary

Department of the Interior obligated $24.6 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: IGF::OT::IGF MICROPACT SOFTWARE AS A SERVICE/PLATFORM AS A SERVICE-FOUNDATION CLOUD HOSTING SERVICES Key points: 1. Contract provides foundation cloud hosting services, crucial for modernizing government IT infrastructure. 2. Awarded via full and open competition, suggesting a competitive bidding process. 3. The contract duration extends over several years, indicating a long-term need for these services. 4. General Dynamics Information Technology, a large established contractor, secured this award. 5. The North Carolina location for performance may have implications for regional IT workforce and economic impact. 6. The contract type (Time and Materials) can present cost control challenges if not managed diligently.

Value Assessment

Rating: fair

Benchmarking the value of this specific cloud hosting contract is challenging without detailed service level agreements and comparable market data for similar government-wide cloud solutions. However, the total contract value of $24.6 million over its potential duration suggests a moderate investment. The Time and Materials (T&M) pricing structure, while flexible, requires robust oversight to ensure costs remain aligned with the value delivered and do not escalate beyond reasonable market rates for cloud infrastructure services. Further analysis would require comparing specific service components and performance metrics against industry benchmarks.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The number of bidders is not specified, but this approach generally fosters a competitive environment, which can lead to better pricing and service offerings for the government. The open competition suggests that the agency sought the best value proposition available in the market for cloud hosting services.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the most cost-effective solution for essential cloud hosting services, potentially reducing overall IT expenditure compared to less competitive procurement methods.

Public Impact

The Department of the Interior benefits from modernized and potentially more resilient cloud infrastructure. Essential government IT services and data will be hosted, supporting agency operations. The contract's performance in North Carolina may create or sustain IT-related jobs in that region. Improved IT capabilities can lead to more efficient service delivery to the public by the Department of the Interior.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials (T&M) contract type can lead to cost overruns if not closely monitored for scope creep and labor hours.
Reliance on a single large contractor for critical cloud infrastructure may pose vendor lock-in risks.
The specific performance metrics and Service Level Agreements (SLAs) are not detailed, making it difficult to assess performance guarantees.
The long contract duration (ending 2026) means potential for technology obsolescence if not managed proactively.

Positive Signals

Awarded through full and open competition, indicating a robust and fair bidding process.
General Dynamics Information Technology is an established contractor with significant experience in government IT services.
The contract addresses a fundamental need for cloud hosting, aligning with government-wide IT modernization efforts.
The extended duration provides stability for critical IT infrastructure planning and operations.

Sector Analysis

This contract falls within the broader Information Technology (IT) sector, specifically focusing on cloud computing services. The market for cloud hosting, including Infrastructure as a Service (IaaS) and Platform as a Service (PaaS), is highly competitive and rapidly evolving. Government spending in this area has been increasing as agencies migrate from legacy systems to cloud-based solutions to enhance agility, scalability, and cost-efficiency. Comparable spending benchmarks would typically involve analyzing other large federal cloud hosting contracts, such as those under the General Services Administration's (GSA) Cloud IT Services (CITS) schedule or agency-specific cloud initiatives.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). General Dynamics Information Technology, Inc. is a large business. While there is no direct small business set-aside, large federal contracts often include subcontracting requirements. The extent to which General Dynamics IT will utilize small businesses for subcontracting opportunities is not specified here but is a key factor in assessing the contract's impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officers and program managers within the Department of the Interior. The Time and Materials (T&M) nature of the contract necessitates diligent monitoring of labor hours, rates, and material costs to ensure compliance with the contract terms and prevent cost overruns. Transparency is typically managed through contract reporting requirements and performance reviews. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise related to the contract's execution.

Related Government Programs

GSA Cloud IT Services (CITS)
Department of Defense Cloud Computing Strategy
Federal Risk and Authorization Management Program (FedRAMP)

Risk Flags

Potential for cost overruns due to T&M contract type
Risk of vendor lock-in with a large provider
Need for robust performance monitoring and SLAs
Potential for technology obsolescence over contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $24.6 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. IGF::OT::IGF MICROPACT SOFTWARE AS A SERVICE/PLATFORM AS A SERVICE-FOUNDATION CLOUD HOSTING SERVICES

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 the Interior (Departmental Offices).

What is the total obligated amount?

The obligated amount is $24.6 million.

What is the period of performance?

Start: 2016-12-16. End: 2026-01-31.

What is the track record of General Dynamics Information Technology, Inc. in delivering cloud hosting services to federal agencies?

General Dynamics Information Technology (GDIT), now part of General Dynamics, has a substantial track record in providing IT services to the federal government, including cloud solutions. They have been involved in numerous large-scale IT modernization efforts across various agencies. Their experience spans infrastructure management, cybersecurity, and application hosting. While specific performance data for this particular contract is not detailed, GDIT's history suggests they possess the technical capabilities and experience to manage complex cloud environments. However, like any large contractor, past performance reviews and contract-specific outcomes would provide a more granular understanding of their effectiveness in delivering cloud hosting services.

How does the awarded price compare to similar cloud hosting contracts within the federal government?

Directly comparing the $24.6 million total contract value to similar cloud hosting contracts is difficult without knowing the specific scope of services, Service Level Agreements (SLAs), and the duration of comparable contracts. Federal cloud hosting contracts vary significantly based on the type of service (IaaS, PaaS, SaaS), the level of support, security requirements (e.g., FedRAMP authorization levels), and the specific cloud environment (e.g., public, private, hybrid). However, for foundational cloud hosting services supporting a large agency like the Department of the Interior, this value appears within a reasonable range for a multi-year contract. A more precise comparison would require benchmarking against contracts with similar technical specifications and performance expectations, potentially found through GSA schedules or other agency IT procurements.

What are the primary risks associated with this Time and Materials (T&M) contract type for cloud hosting?

The primary risk with a Time and Materials (T&M) contract for cloud hosting is the potential for cost escalation due to uncontrolled labor hours or material usage. Unlike fixed-price contracts, T&M agreements pay the contractor for the actual time and materials expended. If not managed rigorously, this can lead to the government paying more than anticipated, especially if the scope of work is not clearly defined or if there are inefficiencies in the contractor's performance. For cloud hosting, this could manifest as excessive support hours, inefficient resource utilization, or unmonitored changes. Effective oversight, clear task orders, and robust performance metrics are crucial to mitigate these risks and ensure the government receives value for its investment.

How effective is the 'full and open competition' approach likely to be in ensuring value for money for this cloud hosting service?

The 'full and open competition' approach is generally considered the most effective method for ensuring value for money in federal procurements. By allowing all responsible sources to compete, it maximizes the pool of potential offerors, thereby increasing the likelihood of receiving competitive bids that reflect fair market prices and innovative solutions. For cloud hosting services, this means the Department of the Interior likely received proposals from multiple vendors, allowing them to compare technical capabilities, past performance, and pricing. This competitive pressure incentivizes bidders to offer their best terms, ultimately benefiting taxpayers by potentially lowering costs and improving service quality compared to sole-source or limited competition awards.

What are the potential implications of the contract's performance location in North Carolina?

The specified performance location in North Carolina has several potential implications. Economically, it could stimulate job creation and business activity within the IT sector in that region, benefiting local communities. From an operational standpoint, it might leverage existing IT infrastructure or talent pools within North Carolina. However, it could also introduce logistical considerations or potentially higher costs if specialized resources need to be brought to the location. For federal agencies, performance location can sometimes be a factor in disaster recovery planning or data sovereignty considerations, although cloud services often mitigate some of these concerns through distributed infrastructure. The specific impact depends on whether the work is performed at a GDIT facility or requires on-site presence.

What is the significance of the contract's duration (ending January 31, 2026) in the context of cloud technology evolution?

The contract duration, extending to January 31, 2026, is significant in the rapidly evolving field of cloud technology. While providing stability for essential hosting services, it also presents a potential challenge. Cloud technologies advance at a rapid pace, and a contract spanning several years might risk locking the government into older or less efficient solutions if not managed proactively. To mitigate this, the Department of the Interior must ensure the contract includes mechanisms for technology refresh, performance improvements, and adaptation to new cloud capabilities. Regular reviews and potential contract modifications will be crucial to ensure the services remain current and cost-effective throughout its term, aligning with the government's broader IT modernization goals.

Industry Classification

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

Solicitation ID: D16PS00817

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 3150 FAIRVIEW PARK DR STE 100, 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: $24,906,557

Exercised Options: $24,904,955

Current Obligation: $24,623,081

Actual Outlays: $23,755,402

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: IND13PC00020

IDV Type: IDC

Timeline