Treasury's IRS awarded $51.3M for IT systems design, with General Dynamics IT as the prime contractor

Contract Overview

Contract Amount: $51,260,142 ($51.3M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2010-06-03

End Date: 2012-07-31

Contract Duration: 789 days

Daily Burn Rate: $65.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS INCENTIVE

Sector: IT

Official Description: CSC FOR MEF R6.2 (A9CR4) AND R7 (A9CM3)

Place of Performance

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

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $51.3 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: CSC FOR MEF R6.2 (A9CR4) AND R7 (A9CM3) Key points: 1. The contract was awarded under a full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Incentive, which can incentivize cost control but also carries inherent risks. 3. The duration of the contract is approximately 789 days, indicating a medium-term project. 4. The award was made to General Dynamics Information Technology, Inc., a large established IT services provider. 5. The North American Industry Classification System (NAICS) code 541512 points to computer systems design services. 6. The contract was awarded as 'Other' (ST: MD), which may require further clarification on its specific nature.

Value Assessment

Rating: fair

The contract value of $51.3 million for computer systems design services over approximately two years appears within a reasonable range for large-scale IT projects. However, without specific details on the scope of work and deliverables, a precise value-for-money assessment is challenging. The Cost Plus Incentive Fee (CPIF) contract type introduces variability in the final cost, making direct comparisons difficult without understanding the incentive structure and performance outcomes. Benchmarking against similar IRS IT modernization efforts or other federal agencies' system design contracts would provide better context.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through a full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bidders suggests a moderate level of competition for this specific award. While two bidders is better than a sole-source award, a higher number of bidders typically leads to more robust price discovery and potentially lower costs for the government. The specific details of the solicitation and evaluation criteria would further illuminate the effectiveness of the competition.

Taxpayer Impact: A full and open competition, even with two bidders, generally provides a better opportunity for taxpayers to receive competitive pricing compared to sole-source or limited competitions.

Public Impact

The primary beneficiaries are the Internal Revenue Service (IRS) and its employees, who will utilize the improved computer systems. The services delivered are computer systems design, crucial for modernizing and maintaining IRS IT infrastructure. The geographic impact is primarily within the IRS's operational footprint, likely supporting national tax administration. Workforce implications may include the need for specialized IT personnel within the IRS and the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Incentive Fee contracts can lead to cost overruns if not managed tightly.
The duration of the contract (789 days) may not align with rapidly evolving technology needs.
The 'Other' award type (ST: MD) requires further investigation to understand the specific services and risks.
Limited competition (2 bidders) might not have yielded the lowest possible price.

Positive Signals

Awarded through full and open competition, indicating a structured procurement process.
The contractor, General Dynamics Information Technology, Inc., is a large, experienced IT services provider.
The contract aims to improve critical IRS IT systems, which supports essential government functions.

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 consistently investing in modernizing their infrastructure and developing new systems to improve efficiency and service delivery. Comparable spending benchmarks for IT system design contracts can vary significantly based on complexity, scope, and duration. However, contracts in the tens of millions of dollars are common for significant system overhauls or development projects within large federal agencies like the IRS.

Small Business Impact

This contract was not set aside for small businesses (SS: false, SB: false). As a result, the prime contract was awarded to a large business. There is no explicit information provided regarding subcontracting plans or goals for small businesses. This means that opportunities for small businesses to participate in this contract would likely be through subcontracting opportunities offered by General Dynamics Information Technology, Inc., rather than through a direct set-aside.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the IRS. The Cost Plus Incentive Fee structure necessitates close monitoring of costs and performance to ensure the government receives value. Transparency is generally facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected.

Related Government Programs

IRS IT Modernization Programs
Federal Civilian IT Services Contracts
Computer Systems Design and Related Services
Cost-Plus Contract Vehicles

Risk Flags

Cost Plus Incentive Fee contract type requires careful monitoring to manage potential cost overruns.
Limited competition (2 bidders) may not have resulted in the most cost-effective outcome for taxpayers.
The specific nature of 'ST: MD' is unclear and warrants further investigation for potential implications.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $51.3 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. CSC FOR MEF R6.2 (A9CR4) AND R7 (A9CM3)

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 $51.3 million.

What is the period of performance?

Start: 2010-06-03. End: 2012-07-31.

What specific computer systems were designed or improved under this contract?

The provided data does not specify the exact computer systems that were the subject of this contract. The NAICS code 541512 indicates 'Computer Systems Design Services,' which is a broad category. These services could encompass the design of new systems, the modification or integration of existing systems, or the development of software and hardware solutions. To understand the specific systems, one would need to consult the contract's statement of work (SOW) or related documentation. This information is crucial for assessing the contract's impact and value.

How did the two bidders compare in terms of technical approach and price?

The available data indicates that the contract was awarded under a full and open competition with two bidders. However, it does not provide details on the comparison of their technical proposals or pricing structures. In a typical procurement process, the government evaluates both technical merit and cost. The selection of General Dynamics Information Technology, Inc. suggests their proposal was deemed the most advantageous, considering both factors according to the criteria outlined in the solicitation. Without access to the source selection decision document, the specifics of the comparison remain unknown.

What were the key performance metrics and incentive targets for the Cost Plus Incentive Fee (CPIF) structure?

The data identifies the contract type as 'COST PLUS INCENTIVE' (PT: COST PLUS INCENTIVE), but it does not detail the specific performance metrics or incentive targets. In a CPIF contract, the contractor is reimbursed for allowable costs plus an incentive fee, which is adjusted based on performance against pre-defined targets (e.g., cost, schedule, performance). Understanding these targets is essential for evaluating whether the contractor was appropriately incentivized to achieve optimal outcomes for the IRS and for assessing the final cost effectiveness of the contract.

What is the significance of the 'ST: MD' designation?

The 'ST: MD' designation likely refers to the contract's status or type within the procurement system, possibly indicating 'Maryland' as a location or a specific contract vehicle/category. However, without a definitive key for these abbreviations, its precise meaning is unclear. If 'MD' refers to Maryland, it might indicate the primary place of performance or the location of the contracting activity. If it refers to a contract type, it could signify a specific type of service or procurement method. Clarification from the issuing agency or procurement database is needed.

What is the historical spending trend for similar IT system design services at the IRS?

The provided data focuses on a single contract award. To understand historical spending trends for similar IT system design services at the IRS, a broader analysis of past contracts would be necessary. This would involve examining contract databases for awards under NAICS code 541512 and related IT service categories over several fiscal years. Such an analysis would reveal patterns in spending levels, types of services procured, dominant contractors, and average contract values, providing context for the $51.3 million award.

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: $55,364,407

Exercised Options: $55,176,287

Current Obligation: $51,260,142

Parent Contract

Parent Award PIID: TIRNO99D00001

IDV Type: IDC

Timeline