Treasury's IRS awarded $30.8M IT contract to General Dynamics for computer systems design

Contract Overview

Contract Amount: $30,804,452 ($30.8M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2003-11-25

End Date: 2004-04-16

Contract Duration: 143 days

Daily Burn Rate: $215.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS INCENTIVE

Sector: IT

Official Description: PRIME INTEGRATION SERVICES CONTRACTOR

Place of Performance

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

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $30.8 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: PRIME INTEGRATION SERVICES CONTRACTOR Key points: 1. Contract awarded under a cost-plus incentive fee structure, suggesting potential for shared savings or cost overruns. 2. The contract was competed fully and openly, indicating a competitive bidding process. 3. The duration of the contract was relatively short at 143 days, suggesting a focused scope or interim solution. 4. The award amount of $30.8M falls within a moderate spending range for IT services. 5. The contractor, General Dynamics Information Technology, is a large, established player in the federal IT market. 6. The contract was not set aside for small businesses, implying larger prime contractors were expected to bid.

Value Assessment

Rating: fair

The contract's value is difficult to assess without detailed performance metrics and cost breakdowns. The cost-plus incentive fee structure introduces variability. Benchmarking against similar IT system design contracts would require more granular data on the specific services rendered and the complexity of the systems involved. The relatively short duration might indicate a project with a defined, limited scope, making direct comparisons challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, suggesting that multiple bidders were likely considered. The presence of two bidders indicates a degree of competition, but the specific number of proposals received and the evaluation process are not detailed here. A competitive process generally aims to achieve better pricing and value for the government.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it promotes a level playing field and can lead to more cost-effective solutions.

Public Impact

The Internal Revenue Service (IRS) is the primary beneficiary, receiving computer systems design services. This contract likely supported the modernization or enhancement of IRS IT infrastructure. The geographic impact is primarily within the IRS's operational footprint, likely concentrated in areas with significant IRS presence. Workforce implications would involve IT professionals and system designers, potentially employed by General Dynamics or its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus incentive fee contracts can lead to higher final costs if not managed carefully.
The short contract duration might indicate a need for follow-on work or potential disruption if not properly transitioned.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
The contractor, General Dynamics Information Technology, has a significant track record in federal IT services.

Sector Analysis

This contract falls within the broader IT services sector, specifically Computer Systems Design Services. This sector is characterized by a mix of large prime contractors and specialized small businesses. Spending in this area by federal agencies is substantial, often supporting critical infrastructure and operational needs. Comparable spending benchmarks would depend on the specific nature of the systems designed, but contracts of this magnitude are common for significant IT projects.

Small Business Impact

The contract was not set aside for small businesses, and the prime contractor is a large entity. This suggests that subcontracting opportunities for small businesses may exist, but they would be dependent on the prime contractor's strategy and the specific needs of the project. There is no direct indication of a specific small business subcontracting plan from the provided data.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the IRS. Accountability measures would be tied to the terms of the cost-plus incentive fee contract, performance metrics, and delivery schedules. Transparency is generally facilitated through contract award databases, though detailed performance reports are often internal.

Related Government Programs

IRS IT Modernization Programs
Federal Civilian IT Services
Computer Systems Design and Integration Services

Risk Flags

Cost-plus contracts require diligent oversight to manage potential cost overruns.
Short contract duration may indicate a need for follow-on work or potential transition challenges.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $30.8 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. PRIME INTEGRATION SERVICES CONTRACTOR

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 $30.8 million.

What is the period of performance?

Start: 2003-11-25. End: 2004-04-16.

What was the specific scope of 'Computer Systems Design Services' for this contract?

The provided data indicates the contract was for 'Computer Systems Design Services' under NAICS code 541512. This typically encompasses designing and developing computer systems, including hardware and software integration. For the IRS, this could have involved designing new systems, modifying existing ones, or integrating disparate IT components to improve operational efficiency or taxpayer services. Without further documentation, the precise nature of the design work, such as the specific systems targeted or the architectural approaches employed, remains unspecified.

How did the 'Cost Plus Incentive Fee' (CPIF) structure impact the final cost compared to the initial award?

A Cost Plus Incentive Fee (CPIF) contract aims to incentivize the contractor to control costs by sharing in savings or cost overruns. The government sets a target cost and a target profit. If the final cost is below the target, both the government and contractor share in the savings based on a pre-agreed formula. Conversely, if the final cost exceeds the target, both share in the overrun, up to a ceiling. The initial award amount of $30.8M represents an estimate. The final expenditure could have been higher or lower depending on the contractor's performance against cost targets and the incentive fee structure negotiated. Detailed post-award financial data would be needed to determine the actual final cost and the impact of the incentive fee.

What is General Dynamics Information Technology's track record with the IRS or similar agencies?

General Dynamics Information Technology (GDIT) is a major federal IT contractor with extensive experience across numerous government agencies, including the IRS. They have a long history of providing a wide range of IT services, such as system integration, cybersecurity, cloud computing, and application development. GDIT has been involved in various large-scale IT projects for the IRS, often related to tax processing, data management, and infrastructure modernization. Their established presence suggests familiarity with the agency's complex requirements and regulatory environment, though specific performance on past IRS contracts would require further investigation.

Were there any performance issues or contract modifications during the contract's short lifespan?

The contract had a duration of 143 days (approximately 4.7 months), which is relatively short for a contract of this value. Without access to contract modification logs or performance reviews, it's impossible to definitively state whether there were performance issues or significant modifications. Short durations can sometimes indicate a need for rapid deployment, a pilot project, or an interim solution pending a larger, more comprehensive contract. It's also possible that the contract was completed successfully within its intended timeframe and scope, requiring no major changes.

How does this $30.8M IT contract compare to overall IRS IT spending trends?

The IRS IT budget is substantial, often running into billions of dollars annually, supporting a vast and complex technological infrastructure. A $30.8 million contract for computer systems design services represents a moderate portion of the overall IT spending. It is likely one of many contracts awarded to support various IT initiatives, such as modernization efforts, cybersecurity enhancements, or specific application development projects. To contextualize its significance, one would need to compare it against the total IT budget for the fiscal years it falls within and analyze the proportion allocated to similar system design and integration services.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 2

Pricing Type: COST PLUS INCENTIVE (V)

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

Financial Breakdown

Contract Ceiling: $244,396,655

Exercised Options: $244,396,655

Current Obligation: $30,804,452

Parent Contract

Parent Award PIID: TIRNO99D00001

IDV Type: IDC

Timeline