Treasury's $33M IT contract to General Dynamics Information Technology, Inc. for computer systems design services

Contract Overview

Contract Amount: $33,195,503 ($33.2M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2002-01-15

End Date: 2009-09-29

Contract Duration: 2,814 days

Daily Burn Rate: $11.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Place of Performance

Location: LANHAM, PRINCE GEORGE'S County, MARYLAND, 20706

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $33.2 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: Key points: 1. Contract awarded under full and open competition, suggesting a competitive bidding process. 2. The contract duration of 2814 days (over 7 years) indicates a long-term need for these services. 3. Awarded as Cost Plus Fixed Fee (CPFF), which can incentivize cost control but requires careful oversight. 4. The contract was awarded to a large, established IT provider, General Dynamics Information Technology, Inc. 5. The North American Industry Classification System (NAICS) code 541512 points to standard computer systems design services. 6. The contract was awarded in 2002 and completed in 2009, reflecting past IT infrastructure needs.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or detailed cost breakdowns. The CPFF structure means the final cost could vary based on actual expenses incurred by the contractor, up to a fixed fee. Comparing it to similar long-term IT system design contracts would require access to detailed pricing structures and service level agreements from that period. The total award amount of $33.2 million over nearly 8 years suggests a moderate annual spend for IT system design services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through 'Full and Open Competition,' indicating that all responsible sources were permitted to submit bids. This typically suggests a robust bidding process where multiple companies had the opportunity to compete for the work. The presence of two bids (no: 2) suggests that while competition was allowed, the number of actual bidders was limited, which could potentially impact price discovery compared to a scenario with numerous competitive offers.

Taxpayer Impact: A full and open competition, even with a limited number of bidders, generally provides a better opportunity for taxpayers to receive competitive pricing compared to sole-source or limited competition awards.

Public Impact

The primary beneficiaries of this contract were likely the Department of the Treasury and its Internal Revenue Service (IRS), receiving enhanced computer systems design services. The services delivered were focused on the design and development of computer systems, crucial for the IRS's operational efficiency and data management. The geographic impact is primarily within the United States, supporting federal government IT infrastructure. The contract supported IT professionals and potentially other roles within General Dynamics Information Technology, Inc., contributing to the federal IT workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not managed diligently, as the government bears the risk of actual costs.
A limited number of bidders (2) in a full and open competition might indicate barriers to entry for smaller firms or a concentrated market for these specific services.
The long duration of the contract (nearly 8 years) could lead to technology obsolescence if not actively managed and updated throughout its term.

Positive Signals

Awarded under full and open competition, which generally promotes competitive pricing and wider access to potential contractors.
The contract was awarded to a well-established IT services provider, General Dynamics Information Technology, Inc., suggesting a level of confidence in their capabilities.
The fixed fee component of the CPFF contract provides a defined profit margin for the contractor, which can help in budget predictability for the government.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on computer systems design services. The market for IT services supporting government agencies is substantial, with numerous large and small companies vying for federal contracts. This particular contract represents a significant investment in IT infrastructure for a major federal agency, the IRS. Comparable spending benchmarks would involve looking at other large-scale IT system design and integration contracts awarded to federal agencies during the early 2000s.

Small Business Impact

This contract does not appear to have involved small business set-asides, as indicated by 'sb': false. General Dynamics Information Technology, Inc. is a large corporation. There is no explicit information regarding subcontracting plans for small businesses within the provided data. The lack of small business involvement suggests that the scope of work was likely tailored for larger prime contractors or that subcontracting opportunities were not a primary focus of this specific award.

Oversight & Accountability

Oversight for this contract would have been managed by the Department of the Treasury's contracting officers and program managers. The CPFF structure necessitates rigorous oversight of contractor costs and performance to ensure value for money. Transparency would be governed by federal procurement regulations and reporting requirements applicable at the time of the contract. Inspector General jurisdiction would typically extend to investigating potential fraud, waste, or abuse related to federal contracts.

Related Government Programs

Federal IT Modernization Programs
IRS Technology Modernization Initiatives
Department of the Treasury IT Services Contracts
Computer Systems Design and Related Services Contracts

Risk Flags

Long contract duration may lead to technology obsolescence.
CPFF contract type requires diligent cost oversight.
Limited number of bidders could impact price competitiveness.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $33.2 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. See the official description on USAspending.

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 Treasury (Internal Revenue Service).

What is the total obligated amount?

The obligated amount is $33.2 million.

What is the period of performance?

Start: 2002-01-15. End: 2009-09-29.

What was the specific nature of the computer systems designed under this contract?

The provided data indicates the contract was for 'Computer Systems Design Services' under NAICS code 541512. While specific details are not available in this summary, this typically encompasses activities such as analyzing user needs, designing system architecture, developing software, integrating hardware and software, and testing systems. For the IRS, these systems could have related to tax processing, taxpayer account management, data security, or internal operational support. The long duration suggests a foundational or significant system development effort rather than a short-term project.

How did the Cost Plus Fixed Fee (CPFF) structure impact the final cost and contractor incentive?

The CPFF structure meant that General Dynamics Information Technology, Inc. was reimbursed for its allowable costs plus a predetermined fixed fee representing profit. This structure shifts the cost risk to the government; if costs exceed estimates, the government pays more. However, the fixed fee incentivizes the contractor to manage costs efficiently to maximize their profit margin within that fixed amount. Effective oversight by the Treasury was crucial to ensure costs were reasonable and allocable to the contract, preventing potential overspending.

What does the limited number of bidders (2) in a full and open competition imply?

A full and open competition theoretically allows all interested and capable vendors to bid. When only two bids are received, it can suggest several possibilities: the market for this specific service might be concentrated among a few large providers, the requirements might have been highly specialized, posing barriers to entry for smaller or less experienced firms, or the solicitation process itself might have deterred broader participation. While competition occurred, a higher number of bidders often leads to more aggressive pricing and a wider range of innovative solutions.

What is the significance of the contract's completion date (2009) in the context of current IT needs?

The contract's completion in 2009 means the systems and services delivered are over a decade old. In the rapidly evolving field of IT, technology from that era is likely outdated by today's standards. This highlights the importance of continuous IT modernization and the potential need for subsequent contracts to update or replace systems developed under this award. It underscores the challenge of long-term IT planning and the need for agile procurement strategies to keep pace with technological advancements.

How does this contract compare to other large federal IT system design contracts from the same period?

Without specific details on the scope, deliverables, and performance metrics of comparable contracts, a direct comparison is difficult. However, a $33.2 million award over nearly eight years for computer systems design services to a major agency like the IRS was a significant investment in the early 2000s. It aligns with the trend of large federal agencies outsourcing complex IT development and integration projects to established contractors. The CPFF structure was also a common, albeit scrutinized, award type for such large-scale, complex endeavors during that period.

Industry Classification

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

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Parent Company: Computer Sciences Corporation (UEI: 009581091)

Address: MARYLAND TECHNOLOGY CENTER, LANHAM, MD, 04

Business Categories: Category Business, Not Designated a Small Business

Parent Contract

Parent Award PIID: TIRNO99D00001

IDV Type: IDC

Timeline