Treasury's $46.3M IT contract to General Dynamics for computer systems design services awarded under full and open competition

Contract Overview

Contract Amount: $46,320,920 ($46.3M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2004-04-23

End Date: 2004-11-07

Contract Duration: 198 days

Daily Burn Rate: $233.9K/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 $46.3 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: PRIME INTEGRATION SERVICES CONTRACTOR Key points: 1. Contract awarded for computer systems design services, indicating a need for specialized IT support. 2. The contract was competed fully and openly, suggesting a competitive bidding process. 3. Awarded to General Dynamics Information Technology, Inc., a major federal contractor. 4. The contract duration is relatively short at 198 days. 5. The contract type is Cost Plus Incentive Fee, which can incentivize cost control but also carries risk. 6. The award was made under the Department of the Treasury, specifically the Internal Revenue Service.

Value Assessment

Rating: fair

The contract value of $46.3 million for a period of 198 days is substantial. Without specific deliverables or performance metrics, it is difficult to benchmark the value for money. The Cost Plus Incentive Fee (CPIF) contract type suggests that pricing is tied to performance and cost targets, which can be effective if well-defined. However, CPIF contracts can also lead to cost overruns if not managed carefully. Comparing this to similar IT system design contracts would require detailed scope and deliverable information.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit bids. The presence of 2 bids suggests a moderate level of competition for this contract. While two bidders participated, the specific details of the bidding process and the capabilities of the non-selected bidder are not provided. A higher number of bidders generally leads to better price discovery and potentially lower costs for the government.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best value through a wide range of potential providers. However, with only two bids, the competitive pressure might have been less intense than in a scenario with numerous bidders.

Public Impact

The primary beneficiary is the Internal Revenue Service (IRS), which receives critical IT support. Services delivered include computer systems design, essential for maintaining and upgrading IRS IT infrastructure. The geographic impact is likely concentrated within the IRS's operational centers, primarily in Maryland. The contract supports the IT workforce within General Dynamics Information Technology, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Incentive Fee contracts require careful monitoring to ensure cost efficiency and prevent overruns.
Limited competition (2 bidders) may not have resulted in the lowest possible price.
The short contract duration might indicate a specific, time-sensitive project or a bridge contract.

Positive Signals

Awarded through full and open competition, which is a positive signal for market engagement.
The contract is with a well-established IT services provider, General Dynamics Information Technology, Inc.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on computer systems design services. The federal IT market is vast, with agencies constantly seeking to modernize and maintain complex systems. Contracts for system design are crucial for ensuring the efficiency and security of government operations. Benchmarking this contract's value would require comparison against similar IT system design projects within the federal government, considering factors like complexity, duration, and specific technological requirements.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a set-aside provision. The prime contractor, General Dynamics Information Technology, Inc., is a large business, and their subcontracting practices would be governed by general federal regulations rather than specific set-aside requirements for this particular award.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the IRS. As a Cost Plus Incentive Fee contract, performance and cost monitoring would be critical. Transparency is facilitated through contract databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

IT Services
Computer Systems Design
Federal IT Modernization
IRS Technology Contracts

Risk Flags

Limited competition (2 bidders)
Cost Plus Incentive Fee contract type requires careful oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $46.3 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 $46.3 million.

What is the period of performance?

Start: 2004-04-23. End: 2004-11-07.

What is the track record of General Dynamics Information Technology, Inc. in delivering similar IT system design services to the federal government?

General Dynamics Information Technology, Inc. (GDIT) has a long and extensive history of providing IT services to various federal agencies, including the Department of the Treasury. Their portfolio includes a wide range of services such as systems engineering, software development, cybersecurity, cloud computing, and IT infrastructure management. GDIT has been a significant player in federal IT contracting for decades, often handling large-scale, complex projects. Their track record generally includes successful delivery of mission-critical systems, though like any large contractor, they may have faced challenges or scrutiny on specific contracts. A detailed review of their past performance on similar computer systems design contracts, particularly those with a Cost Plus Incentive Fee structure, would be necessary to fully assess their suitability and past success for this specific type of work.

How does the awarded amount of $46.3 million compare to similar IT system design contracts awarded by the IRS or Treasury in the past?

Comparing the $46.3 million award requires context regarding the contract's scope, duration, and specific deliverables. This contract, awarded in 2004 for a period of 198 days (approximately 6.5 months), suggests a project of moderate size and duration. For instance, if this was for a specific system upgrade or design phase, the cost might be reasonable. However, if it was for a broader system overhaul, it could be on the lower end. To provide a robust comparison, one would need to analyze IT system design contracts awarded by the IRS or Treasury around the same period (mid-2000s) and adjust for inflation, scope, and complexity. Without more detailed information on the project's objectives and deliverables, a precise value-for-money assessment relative to historical spending is challenging.

What are the primary risks associated with a Cost Plus Incentive Fee (CPIF) contract for computer systems design?

Cost Plus Incentive Fee (CPIF) contracts, like the one awarded here, carry specific risks. The primary risk is that the government may end up paying more than anticipated if the contractor's costs exceed initial estimates, even with incentive clauses. While the incentive fee aims to reward cost savings and performance, poorly defined targets or metrics can lead to unintended consequences. Contractors might focus on achieving the incentive fee rather than the overall best value or most efficient solution. There's also a risk of 'gold plating' – adding unnecessary features or complexity to drive up costs and potentially earn higher fees. Effective oversight and clearly defined performance and cost objectives are crucial to mitigate these risks and ensure the government receives good value.

Given the short duration (198 days), what might this contract have been intended for?

A contract duration of 198 days (approximately 6.5 months) for a $46.3 million award suggests a highly focused and potentially time-sensitive project. This could represent a specific phase of a larger IT initiative, such as a feasibility study, requirements gathering, architectural design, or the development of a critical component of a larger system. It might also have been a bridge contract to maintain essential services or capabilities while a more comprehensive, long-term solution was being planned or competed. Alternatively, it could have been for a rapid deployment of a specific IT solution or a pilot program. The Cost Plus Incentive Fee structure could be employed to incentivize quick and efficient delivery within this compressed timeframe.

How does the 'full and open competition' with only two bidders impact the government's leverage in price negotiation?

While 'full and open competition' is the preferred method, having only two bidders significantly limits the government's leverage in price negotiation. With a larger pool of bidders, the government can benefit from a wider range of pricing proposals and potentially play bidders against each other to secure a more competitive price. When only two bidders participate, the government is essentially negotiating with the best offer from those two. If both bidders have similar cost structures or are large, established companies, there might be less downward pressure on price compared to a scenario with five or more competitive bids. This situation underscores the importance of ensuring that the solicitation process effectively attracts a broad range of qualified bidders.

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: $46,320,920

Exercised Options: $46,320,920

Current Obligation: $46,320,920

Parent Contract

Parent Award PIID: TIRNO99D00001

IDV Type: IDC

Timeline