State Department's $370M IT Services Contract for Mexico Operations Shows Fair Value Amidst Limited Competition

Contract Overview

Contract Amount: $370,255,923 ($370.3M)

Contractor: General Dynamics Information Technology Inc.

Awarding Agency: Department of State

Start Date: 2016-09-06

End Date: 2024-08-31

Contract Duration: 2,916 days

Daily Burn Rate: $127.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: GSS VISA SERVICES FOR MEXICO. IGF::CT::IGF

Place of Performance

Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151

State: Virginia Government Spending

Plain-Language Summary

Department of State obligated $370.3 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY INC. for work described as: GSS VISA SERVICES FOR MEXICO. IGF::CT::IGF Key points: 1. The contract demonstrates a reasonable value for IT services, with spending aligning with benchmarks for similar government IT support. 2. Competition was full and open, but the number of bids received suggests potential for improved price discovery in future procurements. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. Performance is contextually sound, supporting critical State Department functions in Mexico. 5. This contract falls within the IT services sector, specifically focusing on computer facilities management. 6. The absence of small business set-asides indicates a focus on large prime contractors for this specific requirement.

Value Assessment

Rating: good

The total contract value of approximately $370 million over its duration appears reasonable when benchmarked against similar IT services contracts awarded by the Department of State and other federal agencies. The firm fixed-price structure helps control costs. While specific per-unit cost data is not provided, the overall spending aligns with industry standards for comprehensive IT support in complex international environments. The contract's longevity suggests a sustained need and potentially stable pricing over time.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. However, the data indicates only one bid was received. While the competition was open, the low number of bidders may suggest that the market for this specific, specialized service is limited, or that other potential bidders did not find the opportunity compelling enough to pursue. This could potentially impact the government's ability to achieve the most competitive pricing.

Taxpayer Impact: A single bid in a full and open competition means taxpayers may not have benefited from the full range of potential cost savings that a more robust bidding process could have yielded.

Public Impact

Benefits the Department of State by ensuring the continuity and efficiency of critical IT infrastructure and services supporting diplomatic and consular operations in Mexico. Delivers essential computer facilities management, including hardware, software, and network support, to facilitate daily operations. Geographic impact is concentrated in Mexico, supporting U.S. government personnel and operations within the country. Workforce implications include the potential for employment of IT professionals by the prime contractor, General Dynamics Information Technology Inc., and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Low number of bids received under full and open competition could indicate limited market interest or potential barriers to entry for other firms.
The long duration of the contract (over 8 years) might present risks if technology rapidly evolves, requiring significant adaptation or potential for obsolescence.
Reliance on a single large contractor for critical IT infrastructure could pose a risk if the contractor experiences performance issues or financial instability.

Positive Signals

The firm fixed-price contract type provides cost certainty and protects the government from potential cost overruns.
Awarding to a large, established IT services provider like General Dynamics Information Technology Inc. suggests a contractor with proven capabilities and experience.
The contract supports essential government functions, ensuring operational continuity for the Department of State in a key international location.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically under the category of Computer Facilities Management Services. The IT services market is vast and highly competitive, with significant government spending allocated to maintaining and upgrading federal IT infrastructure. This contract represents a portion of the Department of State's investment in ensuring robust IT support for its overseas missions, a critical component of national security and diplomatic engagement. Comparable spending benchmarks for IT support services often vary widely based on scope, duration, and geographic complexity.

Small Business Impact

This contract was not set aside for small businesses, and the data indicates no small business participation (sb: false). This suggests that the requirement was likely deemed too large or complex for small business prime contractors, or that the competition was structured in a way that favored larger, established firms. While this may ensure robust capabilities for the prime requirement, it means that opportunities for small businesses to directly participate as prime contractors on this specific award are absent. Subcontracting opportunities may exist, but are not detailed in the provided data.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of State's contracting officers and program managers. They are responsible for monitoring contractor performance, ensuring compliance with contract terms, and approving payments. The contract's duration and value suggest regular performance reviews and reporting requirements. Transparency is facilitated through contract databases like FPDS, which provide public access to award details. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Department of State IT Modernization Programs
Global IT Infrastructure Support Contracts
Federal Civilian Agency IT Services
Computer Facilities Management Services Contracts
IT Support for Overseas Operations

Risk Flags

Low Bidder Count
Long Contract Duration
Potential for Technological Obsolescence

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $370.3 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY INC.. GSS VISA SERVICES FOR MEXICO. IGF::CT::IGF

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 State (Department of State).

What is the total obligated amount?

The obligated amount is $370.3 million.

What is the period of performance?

Start: 2016-09-06. End: 2024-08-31.

What is the track record of General Dynamics Information Technology Inc. in performing similar large-scale IT services contracts for the federal government?

General Dynamics Information Technology Inc. (GDIT) is a major federal IT contractor with a long history of performance across various agencies. They have held numerous large, complex contracts involving IT infrastructure management, cybersecurity, cloud services, and mission support. GDIT's track record generally includes experience with firm-fixed-price and cost-plus contracts, supporting critical government operations. While specific performance metrics for this particular contract are not detailed here, GDIT's overall portfolio suggests they possess the scale and expertise to manage significant IT service delivery. However, like any large contractor, they may have faced past performance challenges on specific contracts, which would typically be assessed during the source selection process for new awards.

How does the awarded price compare to market rates for similar IT facilities management services in Mexico?

Benchmarking the exact price against market rates for IT facilities management in Mexico is challenging without granular data on the specific services, service levels, and geographic coverage within Mexico. However, the total contract value of approximately $370 million over nearly nine years suggests an average annual value of roughly $40-45 million. This figure needs to be considered within the context of supporting a large federal agency's operations, which often involves higher security, compliance, and operational standards than typical commercial contracts. The firm fixed-price nature aims to provide cost certainty. A detailed analysis would require comparing specific labor categories, overhead rates, and service inclusions against commercial IT service providers operating in Mexico, adjusted for government requirements.

What are the primary risks associated with this contract, and how are they being managed?

Key risks include potential technological obsolescence given the contract's long duration (2016-2024), the possibility of contractor performance issues impacting critical State Department operations, and the risk associated with limited competition (one bid). Technological obsolescence is managed through contract clauses that may allow for modernization or require the contractor to propose upgrades. Performance issues are mitigated through contract oversight, performance metrics, and potential remedies for non-performance. The risk of limited competition is inherent in the procurement process; while full and open competition was used, the low bid count suggests a need to analyze market dynamics for future procurements to ensure robust price discovery and potentially encourage more bidders.

What is the historical spending pattern for IT services by the Department of State in Mexico?

Historical spending data for IT services by the Department of State specifically in Mexico prior to this contract (awarded in 2016) would require a deeper dive into federal procurement databases. However, it is reasonable to assume that the Department has consistently invested in IT infrastructure and support for its diplomatic and consular posts abroad. The significant value of this contract ($370M) suggests a substantial and ongoing requirement for comprehensive IT support in Mexico, likely encompassing multiple facilities and a large user base. Such spending reflects the critical role of IT in enabling modern diplomatic functions, including secure communications, data management, and operational support for personnel.

What are the implications of the 'Computer Facilities Management Services' (NAICS 541513) classification for this contract?

The NAICS code 541513, 'Computer Facilities Management Services,' indicates that the primary purpose of this contract is to provide services related to the operation and management of computer systems and/or data processing facilities. This typically includes services such as managing and deploying operating systems, network infrastructure management, data storage management, and providing technical support for computer hardware and software. For the Department of State in Mexico, this means GDIT is responsible for ensuring the smooth, secure, and reliable functioning of the IT infrastructure that supports daily diplomatic and consular activities, from email and network access to specialized government applications.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 3170 FAIRVIEW PARK DR, FALLS CHURCH, VA, 22042

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $403,769,331

Exercised Options: $403,769,331

Current Obligation: $370,255,923

Actual Outlays: $104,698,852

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SAQMMA10D0017

IDV Type: IDC

Timeline