DoD's $49.6M Engineering Services Contract with CGI Federal: A Deep Dive into Value and Competition

Contract Overview

Contract Amount: $49,646,654 ($49.6M)

Contractor: CGI Federal Inc.

Awarding Agency: Department of Defense

Start Date: 2012-02-01

End Date: 2014-07-31

Contract Duration: 911 days

Daily Burn Rate: $54.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: LABOR&SERVICES IAW PBSOW IN SECTION C

Place of Performance

Location: FAIRFAX, FAIRFAX County, VIRGINIA, 22033

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $49.6 million to CGI FEDERAL INC. for work described as: LABOR&SERVICES IAW PBSOW IN SECTION C Key points: 1. Analysis reveals potential for improved value through competitive bidding. 2. Contractor performance history requires further scrutiny for risk assessment. 3. Spending patterns indicate a significant investment in engineering services. 4. Sector positioning places this contract within a critical defense support area. 5. Oversight mechanisms appear standard, but transparency could be enhanced. 6. Small business participation was not a stated objective for this contract.

Value Assessment

Rating: fair

The contract's total value of $49.6 million over its duration warrants a closer look at its cost-effectiveness. Benchmarking against similar engineering services contracts within the Department of Defense is crucial to determine if the pricing was competitive. Given the 'NOT COMPETED' status, there's an inherent risk that the government may not have secured the best possible price. Further analysis of the specific services rendered and their necessity would provide a clearer picture of the value delivered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This approach is typically used when only one source is capable of meeting the government's needs, or in specific emergency situations. The lack of competition limits the government's ability to explore alternative solutions and potentially negotiate more favorable terms. It also raises questions about the thoroughness of the market research conducted prior to the sole-source determination.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the absence of competition reduces price pressure on the contractor. This means taxpayer funds may not be utilized as efficiently as they could be in a competitive environment.

Public Impact

The Department of Defense benefits from specialized engineering expertise. Services delivered likely support critical defense infrastructure or systems. Geographic impact is centered around the agency's operational areas in Virginia. Workforce implications include the direct employment of engineers and support staff by CGI Federal.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have led to suboptimal pricing.
Sole-source award raises concerns about market research adequacy.
Contract duration of 911 days without re-competition could indicate potential lock-in.
Cost Plus Fixed Fee (CPFF) contract type can sometimes incentivize cost overruns if not managed tightly.

Positive Signals

Contract awarded to CGI Federal, a known entity in government contracting.
Services provided are essential engineering support for the Department of Defense.
Contract was active and presumably delivered necessary services during its term.

Sector Analysis

This contract falls within the Engineering Services sector, a vital component of the broader professional services market supporting government operations. The market for engineering services is substantial, with significant government spending allocated annually across various agencies, particularly in defense and infrastructure. This specific contract represents a portion of the Department of Defense's investment in maintaining and advancing its technological and operational capabilities through specialized engineering expertise.

Small Business Impact

The contract details indicate that small business participation was not a primary consideration, as the 'ss' (small business set-aside) and 'sb' (small business) flags are both false. This suggests that the contract was not specifically set aside for small businesses, nor does it appear to have explicit subcontracting goals for small businesses mandated within its terms. Consequently, the direct impact on the small business ecosystem for this particular award is likely minimal.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. Standard oversight mechanisms would include monitoring contractor performance, ensuring compliance with contract terms, and reviewing financial expenditures. The Inspector General's office within the Department of Defense would have jurisdiction for investigating any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Department of Defense Engineering Contracts
CGI Federal Government Contracts
Sole Source Defense Procurements
Cost Plus Fixed Fee Contracts
Engineering Services for Government

Risk Flags

Sole-source award without clear justification.
Potential for inflated costs due to lack of competition.
CPFF contract type may not be optimal for cost control.
Limited transparency on specific performance metrics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $49.6 million to CGI FEDERAL INC.. LABOR&SERVICES IAW PBSOW IN SECTION C

Who is the contractor on this award?

The obligated recipient is CGI FEDERAL INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $49.6 million.

What is the period of performance?

Start: 2012-02-01. End: 2014-07-31.

What is the track record of CGI Federal in delivering engineering services for the Department of Defense?

CGI Federal has a long-standing history of providing a wide range of services to the Department of Defense, including IT, systems integration, and professional services. Their experience encompasses various defense initiatives, suggesting a capacity to handle complex engineering requirements. However, a detailed review of past performance evaluations, contract modifications, and any disputes or claims associated with their DoD contracts would be necessary to fully assess their track record specifically for engineering services. This would involve examining metrics such as on-time delivery, quality of work, and adherence to budget, as well as any past performance ratings from the agency.

How does the $49.6 million contract value compare to similar engineering services contracts awarded by the DoD?

Without specific details on the scope of work and duration, a direct comparison of the $49.6 million value is challenging. However, this figure represents a significant investment. The Department of Defense frequently awards large engineering services contracts, often in the tens or hundreds of millions of dollars, to support major weapon systems, infrastructure projects, and research and development. To benchmark effectively, one would need to compare this contract's value against other sole-source or competed contracts for similar engineering disciplines (e.g., aerospace, mechanical, electrical) awarded within a comparable timeframe and to similarly sized prime contractors. The 'NOT COMPETED' status suggests this value might be higher than if it had been competitively bid.

What are the primary risks associated with a sole-source award for engineering services?

The primary risks associated with a sole-source award for engineering services include potential overpricing due to the lack of competition, limited access to innovative solutions that might be offered by other vendors, and a reduced incentive for the incumbent contractor to maintain peak performance and efficiency. There's also a risk that the government may not have fully explored all available market capabilities. Furthermore, if the sole-source justification is weak, it could indicate a lack of adequate market research or a pre-determined outcome, which undermines the principles of fair and open competition and can lead to suboptimal use of taxpayer funds.

How effective are Cost Plus Fixed Fee (CPFF) contracts in managing engineering projects for the DoD?

Cost Plus Fixed Fee (CPFF) contracts are often used for research and development or complex projects where the scope is not well-defined at the outset. They provide flexibility by allowing costs to fluctuate while capping the contractor's profit. However, CPFF contracts carry inherent risks. The government assumes the majority of the cost risk, and there's a potential for cost overruns if the contractor's estimates are inaccurate or if project requirements change significantly. Effective management, stringent oversight, and clear communication are essential to mitigate these risks and ensure the contractor remains incentivized to control costs while delivering the required engineering services.

What historical spending patterns exist for engineering services within the Department of Defense?

The Department of Defense consistently represents one of the largest government spenders on engineering services. Historical data shows a sustained and substantial allocation of funds towards engineering, research, development, and technical support across all branches. This spending is driven by the need to maintain technological superiority, develop new defense capabilities, and sustain existing platforms. Trends often reflect evolving geopolitical landscapes, technological advancements, and specific program requirements, leading to fluctuations in spending across different engineering disciplines and contractors over time. Analyzing past spending can reveal patterns of reliance on specific contractors or types of services.

What is the significance of the NAICS code 541330 (Engineering Services) in the context of this contract?

The North American Industry Classification System (NAICS) code 541330 specifically identifies 'Engineering Services.' This classification is crucial as it defines the primary business activity for which the contract was awarded. It signifies that the services procured involved the application of engineering principles and knowledge to provide professional services such as design, consulting, and project management. For the Department of Defense, this code encompasses a broad range of needs, from designing complex military systems and infrastructure to providing technical analysis and support for existing platforms. It helps in categorizing spending and benchmarking against similar services across the federal government.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N6833511R0057

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: CGI Inc (UEI: 248513116)

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: $53,128,905

Exercised Options: $53,128,905

Current Obligation: $49,646,654

Actual Outlays: $81,677

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline