DoD's $27M legacy system support contract awarded to CGI Federal Inc. shows fair value despite limited competition

Contract Overview

Contract Amount: $27,050,337 ($27.1M)

Contractor: CGI Federal Inc.

Awarding Agency: Department of Defense

Start Date: 2013-05-16

End Date: 2019-05-16

Contract Duration: 2,191 days

Daily Burn Rate: $12.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: POST DEPLOYMENT SUPPORT SERVICES (PDSS) LEGACY SYSTEMS MAINTENANCE AND SUSTAINMENT

Place of Performance

Location: ALBANY, DOUGHERTY County, GEORGIA, 31707

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $27.1 million to CGI FEDERAL INC. for work described as: POST DEPLOYMENT SUPPORT SERVICES (PDSS) LEGACY SYSTEMS MAINTENANCE AND SUSTAINMENT Key points: 1. Contract provides essential sustainment for critical legacy IT systems, ensuring operational continuity. 2. Pricing appears reasonable when benchmarked against similar IT support services. 3. Competition was limited, potentially impacting price discovery and value for money. 4. Contract duration of nearly six years suggests a long-term need for these services. 5. The contract is positioned within the broader IT services sector, supporting defense operations. 6. No small business set-aside was utilized, indicating a focus on large prime contractors.

Value Assessment

Rating: fair

The contract's value of approximately $27 million over six years for legacy system support appears reasonable given the specialized nature of maintaining older IT infrastructure. Benchmarking against similar IT sustainment contracts suggests that the pricing is within an acceptable range, though the lack of robust competition makes a definitive value assessment challenging. The firm-fixed-price structure provides cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with three bidders vying for the work. While multiple bidders participated, the specific number suggests a moderate level of competition for this specialized IT support service. The presence of multiple bidders generally aids in price discovery, but the ultimate impact on achieving the best possible price is influenced by the specific capabilities and market dynamics of the participating firms.

Taxpayer Impact: The full and open competition, with three bidders, likely resulted in a competitive price, offering a reasonable value to taxpayers for essential IT sustainment services.

Public Impact

The Department of the Navy benefits from the continued operation of critical legacy IT systems. Services delivered include maintenance, sustainment, and support for essential defense infrastructure. The geographic impact is primarily within Department of Defense facilities where these legacy systems are deployed. Workforce implications include the need for specialized IT personnel with expertise in older technologies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in due to the specialized nature of legacy system support.
Risk of cost escalation if unforeseen technical challenges arise with aging systems.
Dependence on a single contractor for critical system maintenance could pose continuity risks.

Positive Signals

Contract provides essential continuity for critical defense IT infrastructure.
Firm-fixed-price contract offers cost predictability for the government.
Award to an established contractor like CGI Federal suggests a level of reliability.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on the maintenance and sustainment of legacy systems. The market for such services is characterized by specialized expertise required to support older technologies that are often critical to ongoing operations but are no longer actively developed. Comparable spending benchmarks for IT sustainment can vary widely based on system complexity and criticality, but this contract's value is consistent with significant IT support requirements within large government agencies.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The award to CGI Federal Inc., a large prime contractor, suggests that the focus was on securing specialized expertise for legacy system maintenance, potentially overlooking opportunities to engage the small business ecosystem in this specific procurement.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers, ensuring adherence to contract terms and performance standards. Accountability measures are embedded within the firm-fixed-price structure and performance metrics. Transparency is generally maintained through contract award databases, though detailed performance data may be less publicly accessible.

Related Government Programs

Defense IT Modernization Programs
Legacy System Sustainment Contracts
IT Services for Department of Defense
Computer Systems Design Services

Risk Flags

Potential for vendor lock-in
Security risks associated with legacy systems
Dependence on specialized, potentially scarce expertise

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.1 million to CGI FEDERAL INC.. POST DEPLOYMENT SUPPORT SERVICES (PDSS) LEGACY SYSTEMS MAINTENANCE AND SUSTAINMENT

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 $27.1 million.

What is the period of performance?

Start: 2013-05-16. End: 2019-05-16.

What is the track record of CGI Federal Inc. in supporting legacy defense IT systems?

CGI Federal Inc. has a significant history of providing IT services to the U.S. government, including the Department of Defense. Their experience often spans various aspects of IT support, from system integration to maintenance and sustainment. For legacy systems, their track record would involve managing the complexities of older hardware and software, ensuring operational continuity, and potentially assisting in modernization efforts. While specific performance metrics for this particular contract are not detailed here, CGI Federal's broad experience suggests a capacity to handle such requirements. However, a deeper dive into past performance reviews and any documented issues on similar contracts would provide a more comprehensive understanding of their reliability in this domain.

How does the $27 million contract value compare to similar legacy system support contracts within the DoD?

Benchmarking the $27 million contract value requires comparing it to similar sustainment contracts for legacy IT systems within the Department of Defense. The average cost for such services can vary significantly based on the criticality, complexity, and age of the systems being supported. Contracts for maintaining large-scale, mission-critical legacy systems can easily run into millions of dollars annually. Given the nearly six-year duration of this contract, the annual spend is approximately $4.5 million. This figure appears to be within a reasonable range for specialized IT support of aging defense infrastructure, especially when considering the potential costs associated with system failures or the complexities of maintaining outdated technology. Without specific details on the systems supported, a precise comparison is difficult, but the overall value seems aligned with industry norms for this type of service.

What are the primary risks associated with supporting legacy IT systems, and how are they mitigated in this contract?

The primary risks associated with supporting legacy IT systems include technological obsolescence, lack of skilled personnel, security vulnerabilities, and potential for system failures. Technological obsolescence means that components may no longer be manufactured or supported, making repairs difficult and expensive. Finding personnel with expertise in older systems can also be challenging. Security vulnerabilities are a major concern as legacy systems may not be compatible with modern security protocols. System failures can disrupt critical operations. This contract attempts to mitigate these risks through a firm-fixed-price structure, which incentivizes the contractor to manage costs efficiently and proactively address potential issues. The long-term nature of the contract also allows for the development of specialized knowledge within CGI Federal. However, the inherent risks of legacy systems remain, and ongoing vigilance and potential modernization strategies are crucial.

What is the expected program effectiveness and impact of this contract on DoD operations?

The expected program effectiveness of this contract is to ensure the continued operational availability and reliability of critical legacy IT systems within the Department of the Navy. By providing dedicated maintenance and sustainment services, the contract aims to prevent system downtime, data loss, and operational disruptions that could impact defense missions. The impact on DoD operations is significant, as these legacy systems likely support essential functions that may not yet have been fully migrated to modern platforms. Effective sustainment ensures that these functions remain available, thereby maintaining the overall operational readiness and capability of the Navy. The success of the program hinges on the contractor's ability to maintain these systems efficiently and securely over the contract's duration.

How has spending on legacy system support evolved within the DoD, and does this contract represent a trend?

Spending on legacy system support within the DoD has historically been substantial, as the department operates a vast and complex array of IT systems, many of which have long lifecycles. While the DoD actively pursues modernization initiatives, the transition to new systems is often a lengthy and costly process. Consequently, significant budgets are allocated annually to maintain and sustain existing legacy infrastructure to ensure continuity of operations. This contract, valued at approximately $27 million over six years for specific legacy system support, is indicative of this ongoing trend. It reflects the reality that despite modernization efforts, the need for robust support for established systems remains a critical component of the DoD's IT budget. The continued reliance on such contracts suggests that legacy system sustainment will remain a significant area of federal IT spending for the foreseeable future.

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: M6785413Q7500

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $27,050,337

Exercised Options: $27,050,337

Current Obligation: $27,050,337

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $168,200

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS35F4797H

IDV Type: FSS

Timeline