State Department's $51.7M IT support contract awarded to CGI Federal Inc. lacked competition

Contract Overview

Contract Amount: $51,685,567 ($51.7M)

Contractor: CGI Federal Inc.

Awarding Agency: Department of State

Start Date: 2013-09-30

End Date: 2017-12-29

Contract Duration: 1,551 days

Daily Burn Rate: $33.3K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: INCREMENTAL FUNDING - PPT SUPPORT SERVICES - TASK 6, IGF::OT::IGF

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20520

State: District of Columbia Government Spending

Plain-Language Summary

Department of State obligated $51.7 million to CGI FEDERAL INC. for work described as: INCREMENTAL FUNDING - PPT SUPPORT SERVICES - TASK 6, IGF::OT::IGF Key points: 1. Contract awarded on a sole-source basis, limiting potential cost savings through competition. 2. Significant duration of over 4 years suggests a long-term need for these services. 3. The firm-fixed-price structure shifts performance risk to the contractor. 4. Computer Facilities Management Services are critical for agency operations. 5. The contract's value places it in the mid-to-large tier for IT services. 6. Lack of competition may indicate a specialized need or a failure in market research.

Value Assessment

Rating: fair

The contract's value of $51.7 million over approximately four years for IT support services appears within a reasonable range for large-scale federal IT contracts. However, without a competitive bidding process, it is difficult to benchmark the pricing against market rates or identify potential cost efficiencies. The firm-fixed-price nature of the contract suggests that the contractor bears the risk of cost overruns, which is a positive indicator for the government. Further analysis would require comparing the specific services rendered to similar contracts awarded through full and open competition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required services, often due to proprietary technology, unique capabilities, or urgent needs. The absence of competition means there was no opportunity for price discovery through bidding, potentially leading to higher costs for the government compared to a competitively awarded contract. The rationale for the sole-source award would need to be thoroughly documented to justify the lack of broader market engagement.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure to drive down prices. The government missed an opportunity to leverage market forces for better value.

Public Impact

The Department of State benefits from continuous IT support, ensuring the smooth functioning of its internal systems and operations. Employees of the Department of State are the primary users of the IT facilities management services, enabling them to perform their duties effectively. The services provided are crucial for maintaining the agency's technological infrastructure, supporting diplomatic and administrative functions. The contract's impact is primarily concentrated within the District of Columbia, where the Department of State's headquarters are located.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential cost savings.
Long contract duration could lead to vendor lock-in if not managed carefully.
Lack of transparency in the sole-source justification could hide inefficiencies.

Positive Signals

Firm-fixed-price contract shifts cost risk to the contractor.
Consistent IT support ensures operational continuity for a critical government agency.
Contractor CGI Federal Inc. has a track record with government contracts.

Sector Analysis

The IT services sector within the federal government is vast, encompassing a wide range of support functions. Contracts for computer facilities management, like this one, are essential for maintaining the operational backbone of agencies. The market for these services is competitive, with numerous large and small businesses offering solutions. However, specific niche requirements or existing infrastructure integrations can sometimes lead to sole-source awards. Benchmarking this $51.7 million contract against similar IT support services awarded to agencies of comparable size and complexity would provide further context on its value.

Small Business Impact

This contract was not set aside for small businesses, nor does it indicate any specific subcontracting requirements for small businesses. The award to CGI Federal Inc., a large business, suggests that the scope of work was likely beyond the capacity or specialization of small businesses, or that the procurement strategy did not prioritize small business participation. This could represent a missed opportunity to engage small businesses in supporting critical IT functions.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of State's contracting officers and program managers. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver specified services within the agreed-upon price. Transparency regarding the sole-source justification and performance metrics would be crucial for assessing accountability. The Inspector General for the Department of State would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Department of State IT Modernization Programs
Federal Civilian Agency IT Support Contracts
Computer Facilities Management Services
IT Services for Diplomatic Missions

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $51.7 million to CGI FEDERAL INC.. INCREMENTAL FUNDING - PPT SUPPORT SERVICES - TASK 6, IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is CGI FEDERAL INC..

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $51.7 million.

What is the period of performance?

Start: 2013-09-30. End: 2017-12-29.

What is CGI Federal Inc.'s track record with the Department of State and other federal agencies for IT support services?

CGI Federal Inc. has a significant history of contracting with the Department of State and other federal agencies, providing a wide array of IT services. Their portfolio includes IT infrastructure management, software development, cybersecurity, and business process re-engineering. For the Department of State specifically, CGI Federal has been involved in various IT modernization efforts and ongoing support contracts. Analyzing past performance reviews, contract modifications, and any past performance issues or awards associated with CGI Federal on similar contracts would provide a clearer picture of their reliability and capability in delivering complex IT solutions. This includes examining their history of meeting deadlines, staying within budget on other fixed-price contracts, and overall client satisfaction reported in federal databases.

How does the $51.7 million cost compare to similar IT support contracts awarded by the Department of State or other large federal agencies?

Benchmarking the $51.7 million cost requires comparing it to contracts for similar IT support services (e.g., computer facilities management, IT infrastructure support) awarded over a comparable timeframe (2013-2017) by agencies of similar size and mission complexity, such as the Department of Defense, Department of Justice, or HHS. Ideally, comparisons would be made with competitively awarded contracts to establish a market-based price. Given this contract was sole-source, its price might be higher than a competitively bid equivalent. Factors like the specific scope of services, service level agreements (SLAs), geographic coverage, and contract duration significantly influence cost. Without detailed service descriptions and competitive benchmarks, a precise value-for-money assessment is challenging, but the amount suggests a substantial, long-term IT support requirement.

What were the specific justifications provided for awarding this contract on a sole-source basis to CGI Federal Inc.?

Sole-source awards are typically justified under specific circumstances outlined in the Federal Acquisition Regulation (FAR), such as when only one responsible source can provide the required supplies or services, or when there is a compelling urgency. For this contract, the justification likely centered on CGI Federal Inc. possessing unique capabilities, proprietary technology, or an established integration with the Department of State's existing IT infrastructure that made transitioning to another vendor impractical or excessively costly. The Department of State would have had to document these reasons extensively, demonstrating that market research was conducted and that no other vendor could meet the requirements adequately. The specific justification document, often a Justification and Approval (J&A) for Other Than Full and Open Competition, would contain the detailed rationale.

What are the potential risks associated with a sole-source IT support contract of this magnitude and duration?

A sole-source IT support contract of this magnitude ($51.7 million) and duration (over 4 years) carries several potential risks. Firstly, the lack of competition can lead to inflated prices and reduced incentive for the contractor to innovate or improve service quality, as there is no market pressure. Secondly, there's a risk of vendor lock-in, where the government becomes heavily reliant on the incumbent contractor's systems and expertise, making future transitions difficult and expensive. Thirdly, without competitive oversight, there's a potential for scope creep or inefficient resource allocation if contract management and performance monitoring are not rigorous. Finally, if the contractor's performance falters or their financial stability is compromised, the government has limited immediate alternatives, potentially disrupting critical IT operations.

How has the Department of State's spending on IT support services evolved since this contract was awarded?

Tracking the Department of State's IT support spending evolution since this contract (awarded Sept 2013, ending Dec 2017) would reveal trends in their IT investment strategy. Post-2017, federal IT spending has generally increased, driven by modernization initiatives, cybersecurity mandates, and cloud adoption. The Department of State, like other agencies, has likely shifted towards more agile methodologies, cloud-based solutions (e.g., Microsoft 365), and enhanced cybersecurity measures. Analyzing their subsequent IT contracts, including those awarded competitively and any further sole-source actions, would indicate whether they moved towards more open competition, consolidated IT services, or adopted new technologies. This historical spending pattern provides context for the agency's ongoing IT needs and procurement approaches.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

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, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $51,685,567

Exercised Options: $51,685,567

Current Obligation: $51,685,567

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SAQMMA13D0174

IDV Type: IDC

Timeline