Treasury's $30.5M IT contract for systems integration awarded to General Dynamics without competition

Contract Overview

Contract Amount: $30,587,140 ($30.6M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2004-05-27

End Date: 2013-04-20

Contract Duration: 3,250 days

Daily Burn Rate: $9.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COMBINATION (TWO OR MORE)

Sector: IT

Official Description: PRIME SYSTEMS INTEGRATION SERVICES CONTR

Place of Performance

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

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $30.6 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: PRIME SYSTEMS INTEGRATION SERVICES CONTR Key points: 1. The contract value of $30.5 million over its duration suggests a significant investment in IT infrastructure. 2. Awarded to a single vendor, this contract bypasses competitive dynamics, potentially impacting price discovery. 3. The 'NOT COMPETED' status raises questions about the justification for not seeking multiple bids. 4. The contract's long duration (over 9 years) indicates a need for sustained IT support. 5. The IT sector, particularly systems integration, is critical for government operations. 6. The absence of small business set-aside flags suggests a focus on large prime contractors.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without comparable sole-source awards for similar IT systems integration services. The lack of competition means there's no direct price comparison to assess if the $30.5 million represents a fair market price. Given the duration and the nature of systems integration, the cost per year appears substantial, but without a competitive process, its value-for-money proposition is difficult to ascertain. Further analysis would require understanding the specific deliverables and market rates for such specialized services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, General Dynamics Information Technology, Inc., was considered. The justification for not competing this requirement is not provided in the data. Sole-source awards typically occur when a unique capability is required, or in emergency situations. The lack of competition limits the government's ability to explore alternative solutions and potentially secure lower prices through a bidding process.

Taxpayer Impact: Taxpayers may not have received the best possible price due to the absence of a competitive bidding process. This could mean that the government paid more than it would have if multiple vendors had vied for the contract.

Public Impact

The Internal Revenue Service (IRS) is the primary beneficiary, receiving critical IT systems integration services. This contract supports the modernization and maintenance of essential government IT infrastructure. The services delivered likely impact the efficiency of tax processing and taxpayer services. The geographic impact is primarily within the United States, supporting federal agency operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source award raises concerns about the justification and potential for better pricing.
Long contract duration without re-competition could reduce vendor incentive for innovation.
Absence of small business participation may limit opportunities for smaller IT firms.

Positive Signals

Award to a large, established IT contractor like General Dynamics suggests potential for reliable service delivery.
The contract's focus on systems integration addresses a core IT need for the IRS.
The long duration implies a stable, ongoing requirement for these services.

Sector Analysis

This contract falls within the Information Technology sector, specifically Computer Systems Design Services. The IT services market is highly competitive, with numerous large and small firms offering a wide range of solutions. Government IT spending is a significant portion of the federal budget, with agencies constantly seeking to upgrade and maintain their systems. Comparable spending benchmarks for large-scale IT integration projects can vary widely based on scope, complexity, and duration, but a $30.5 million award over nearly a decade indicates a substantial and ongoing requirement.

Small Business Impact

This contract does not appear to have included a small business set-aside, as indicated by 'sb: false'. The prime contractor is a large business. There is no information provided regarding subcontracting plans or actual subcontracting to small businesses. The absence of a set-aside means that opportunities for small businesses to directly compete for this work were likely limited, potentially impacting the small business IT ecosystem's ability to secure prime contracts of this magnitude.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the contracting officer's representative (COR) at the IRS, who monitors performance and ensures compliance with contract terms. Accountability rests with General Dynamics Information Technology, Inc. to deliver the specified systems integration services. Transparency is limited due to the sole-source nature and lack of publicly available detailed performance reports. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IT Services
Systems Integration
Computer Systems Design Services
Federal IT Procurement
IRS IT Modernization

Risk Flags

Sole-source award without clear justification
Potential for inflated pricing due to lack of competition
Long contract duration may reduce innovation incentives
Limited transparency on performance and value

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $30.6 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. PRIME SYSTEMS INTEGRATION SERVICES CONTR

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 $30.6 million.

What is the period of performance?

Start: 2004-05-27. End: 2013-04-20.

What specific systems integration services were provided under this contract?

The contract data indicates the service category as 'Computer Systems Design Services' (NAICS 541512) and the product service code as 'PRIME SYSTEMS INTEGRATION SERVICES CONTR'. While specific details are not provided, this generally encompasses the design, development, implementation, and maintenance of complex IT systems. For the IRS, this could involve integrating various software applications, hardware components, and network infrastructure to support functions like tax processing, taxpayer account management, and data security. The services likely aimed to ensure seamless operation and interoperability between different IT components within the agency.

What was the justification for awarding this contract on a sole-source basis?

The provided data explicitly states the contract was 'NOT COMPETED' and awarded on a 'sole-source' basis. Federal regulations (like the FAR) permit sole-source awards under specific circumstances, such as when only one responsible source can provide the required supplies or services, or when a public exigency requires immediate contract award. Without further documentation from the awarding agency (Department of the Treasury/IRS), the precise justification remains unknown. However, such justifications are typically required to be documented and approved internally before the award is made.

How does the contract's duration of over 9 years (May 2004 - April 2013) compare to typical IT systems integration contracts?

A contract duration of over nine years for IT systems integration is quite long, though not unprecedented, especially for large-scale, mission-critical systems. Many government IT contracts are awarded with base periods and multiple option periods, allowing for extensions. However, such extended durations without periodic re-competition can raise concerns about potential cost inefficiencies and reduced incentives for innovation. Modern IT procurement often favors shorter contract cycles to allow for technology refreshes and market adjustments. The length here suggests a very stable, long-term need for the specific integration services provided by General Dynamics.

What is the typical market rate for IT systems integration services of this scale?

Determining a precise 'market rate' for IT systems integration services of this scale ($30.5M over 9+ years) is complex due to the highly variable nature of such projects. Factors influencing cost include the specific technologies involved, the complexity of the systems being integrated, the level of security required, the geographic location of services, and the contractor's overhead and profit margins. However, hourly rates for skilled systems integration professionals can range from $100 to over $300 per hour, depending on expertise. For a contract of this magnitude, the government would typically benchmark proposed costs against historical data, independent cost estimates, and potentially other similar contract awards, though direct comparisons are difficult for sole-source awards.

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

The primary risks associated with a sole-source IT contract of this size and duration include: 1) Higher Costs: Without competition, the contractor may not be incentivized to offer the lowest possible price. 2) Lack of Innovation: The incumbent contractor might become complacent, leading to slower adoption of new technologies or more efficient methods. 3) Vendor Lock-in: The agency may become overly reliant on the specific solutions and expertise of the sole provider, making future transitions difficult and costly. 4) Performance Issues: If the contractor's performance degrades, the agency has limited leverage to seek alternative providers without a lengthy and complex re-competition process.

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: NOT COMPETED

Offers Received: 1

Pricing Type: COMBINATION (TWO OR MORE) (2)

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: $61,817,889

Exercised Options: $61,817,889

Current Obligation: $30,587,140

Parent Contract

Parent Award PIID: TIRNO99D00001

IDV Type: IDC

Timeline