DoD's $41.5M IT Services Contract with CGI Federal Shows Moderate Value Amidst Full and Open Competition

Contract Overview

Contract Amount: $41,502,426 ($41.5M)

Contractor: CGI Federal Inc.

Awarding Agency: Department of Defense

Start Date: 2015-10-29

End Date: 2021-12-31

Contract Duration: 2,255 days

Daily Burn Rate: $18.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: IGF::OT::IGF PLANS&DATA SUPPORT SERVICES

Place of Performance

Location: JACKSONVILLE, DUVAL County, FLORIDA, 32226

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $41.5 million to CGI FEDERAL INC. for work described as: IGF::OT::IGF PLANS&DATA SUPPORT SERVICES Key points: 1. Contract value of $41.5M over 6 years suggests a significant but not excessive investment in IT services. 2. Full and open competition indicates a healthy market with multiple potential bidders, likely driving competitive pricing. 3. The 'Cost Plus Fixed Fee' contract type carries inherent risk of cost overruns, requiring diligent oversight. 4. Performance period of over 6 years allows for sustained support but also necessitates ongoing performance monitoring. 5. The contract falls within the custom computer programming services NAICS code, a common area for federal IT spending. 6. No small business set-aside or subcontracting was noted, potentially limiting opportunities for smaller firms in this contract.

Value Assessment

Rating: good

The contract's total value of $41.5M over approximately six years averages to about $6.9M annually. This figure appears reasonable for comprehensive IT plans and data support services, especially considering the complexity often involved in defense sector IT. Benchmarking against similar large-scale IT service contracts within the Department of Defense suggests this pricing is within expected ranges, though specific performance metrics and deliverables would be needed for a more precise value assessment. The 'Cost Plus Fixed Fee' structure, while allowing for flexibility, requires careful management to ensure costs remain controlled and aligned with the fixed fee.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit offers. The fact that it was competed openly suggests that the Department of the Navy sought to maximize the pool of potential contractors and leverage market competition to obtain the best value. While the number of bidders is not specified, full and open competition generally implies more than a minimal number of offers, which is a positive sign for price discovery and innovation.

Taxpayer Impact: Taxpayers benefit from full and open competition as it typically leads to more competitive pricing and a wider array of solutions, ultimately aiming for more efficient use of public funds.

Public Impact

The Department of the Navy benefits from sustained IT planning and data support services, crucial for its operational effectiveness. This contract supports the development and implementation of IT strategies and data management solutions within the defense sector. The geographic impact is primarily within Florida, where the contractor is located, but the services likely support broader Navy operations. The contract supports a workforce involved in specialized IT services, including programming, system analysis, and data management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not managed tightly.
Long performance period (over 6 years) requires sustained vigilance to ensure continued relevance and performance.
Lack of small business participation noted, potentially missing opportunities to foster smaller business growth.
Specific details on performance metrics and outcomes are not readily available for a full value assessment.

Positive Signals

Awarded under full and open competition, indicating a robust bidding process.
Contract provides essential IT planning and data support services for a major federal agency.
Contractor CGI Federal Inc. has a significant presence and experience in government contracting.
The contract duration allows for stable support and development of long-term IT solutions.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on custom computer programming services (NAICS 541511). The federal IT market is vast, with agencies consistently investing in services that support their digital infrastructure, data management, and cybersecurity needs. Comparable spending benchmarks for IT services within the Department of Defense are typically in the tens to hundreds of millions of dollars annually, depending on the scope and duration. This contract's value of $41.5M over six years positions it as a significant, but not exceptionally large, IT services award within this context.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific requirements for small business subcontracting based on the provided data. This means that opportunities for small businesses to directly participate in this specific contract were likely limited to the prime contractor's discretion. While CGI Federal Inc. may engage small businesses as subcontractors, the absence of explicit set-asides or goals means there's no guaranteed pathway for small business involvement, potentially impacting the broader small business IT ecosystem's access to this particular federal spend.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a Cost Plus Fixed Fee contract, rigorous financial oversight is crucial to monitor expenditures against the fixed fee and ensure cost reasonableness. Transparency is facilitated through contract award databases and reporting requirements. While no specific Inspector General (IG) jurisdiction is mentioned, the DoD's Office of Inspector General would have oversight authority for potential fraud, waste, or abuse related to this contract.

Related Government Programs

DoD IT Modernization Programs
Navy Enterprise IT Services
Custom Software Development Contracts
Federal Data Management Services
IT Planning and Consulting Services

Risk Flags

Cost Plus Fixed Fee contract type requires diligent cost monitoring.
Long contract duration necessitates ongoing performance evaluation.
Lack of explicit small business subcontracting goals.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.5 million to CGI FEDERAL INC.. IGF::OT::IGF PLANS&DATA SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is CGI FEDERAL INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $41.5 million.

What is the period of performance?

Start: 2015-10-29. End: 2021-12-31.

What is CGI Federal Inc.'s track record with similar IT services contracts within the Department of Defense?

CGI Federal Inc. has a substantial history of performing IT services contracts for the Department of Defense and other federal agencies. They are a well-established government contractor specializing in a wide range of IT solutions, including custom programming, system integration, and IT management. Their track record typically involves large-scale, complex projects. While specific performance ratings for this particular contract (ID 541511) are not detailed here, CGI Federal generally demonstrates capability in delivering IT services. However, like many large contractors, they may have faced scrutiny or performance issues on specific contracts over their extensive history, necessitating a review of individual contract performance data for a comprehensive assessment.

How does the value of this contract compare to other custom computer programming services contracts awarded by the Navy?

The $41.5 million total value over approximately six years for this contract (ID 541511) places it as a moderately large award within the custom computer programming services category for the Department of the Navy. The Navy awards numerous IT contracts annually, ranging from small, specialized projects costing tens of thousands to large enterprise-wide solutions costing hundreds of millions. An average annual value of roughly $6.9 million for IT plans and data support services is consistent with significant, ongoing support requirements. It is not an outlier in terms of sheer dollar amount but represents a substantial investment in a specific IT capability over a considerable period.

What are the primary risks associated with the 'Cost Plus Fixed Fee' (CPFF) contract type for this specific engagement?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract, like the one awarded to CGI Federal for IT services, is the potential for cost overruns. While the 'fixed fee' provides the contractor with a set profit margin, the 'cost plus' portion means the government reimburses the contractor for allowable costs incurred. If the contractor's costs exceed initial estimates, the government pays the higher amount, potentially leading to a final price significantly above the initially anticipated level. This necessitates robust government oversight to scrutinize costs, ensure efficiency, and prevent scope creep that inflates expenses. The contractor also faces the risk of not covering their costs if they are highly inefficient, though the fixed fee aims to balance this.

How effective has the 'full and open competition' strategy been in ensuring value for this IT services contract?

The strategy of 'full and open competition' is generally considered effective in promoting value for IT services contracts by fostering a competitive environment. It allows a broad range of qualified vendors to bid, increasing the likelihood of receiving competitive pricing and innovative solutions. For this $41.5M contract, this approach suggests the Department of the Navy aimed to leverage market forces to secure the best possible outcome. While the raw data doesn't provide specific metrics on the number of bidders or the price savings achieved compared to a sole-source award, the principle of open competition itself is a strong indicator of an effort to maximize taxpayer value and ensure a fair market price was sought.

What are the historical spending patterns for custom computer programming services (NAICS 541511) by the Department of the Navy?

The Department of the Navy consistently allocates significant funding towards custom computer programming services (NAICS 541511) annually. Historical spending data reveals a strong and sustained demand for these services, driven by the need to develop, maintain, and modernize complex IT systems supporting naval operations, logistics, personnel management, and intelligence. Spending in this category often fluctuates based on major modernization initiatives, cybersecurity upgrades, and evolving technological requirements. The Navy's total obligations for NAICS 541511 typically run into the hundreds of millions, if not billions, of dollars across all its components, making individual contracts like this one part of a much larger, ongoing investment in its IT infrastructure.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: M6700415R0028

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: CGI Inc

Address: 12601 FAIR LAKES CIR, FAIRFAX, VA, 22033

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

Financial Breakdown

Contract Ceiling: $42,852,091

Exercised Options: $42,852,091

Current Obligation: $41,502,426

Actual Outlays: $1,878,836

Subaward Activity

Number of Subawards: 22

Total Subaward Amount: $1,468,730

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline