VA awards $188M for records management, with 3 bidders competing for IT services

Contract Overview

Contract Amount: $188,406,991 ($188.4M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2017-09-15

End Date: 2024-09-17

Contract Duration: 2,559 days

Daily Burn Rate: $73.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF RECORDS MANAGEMENT CENTER EXTRACTION AND SCANNING SERVICES

Place of Performance

Location: SAINT LOUIS, SAINT LOUIS CITY County, MISSOURI, 63120

State: Missouri Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $188.4 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: IGF::OT::IGF RECORDS MANAGEMENT CENTER EXTRACTION AND SCANNING SERVICES Key points: 1. The contract value represents a significant investment in digital transformation for the VA. 2. Competition dynamics suggest a healthy market for IT services within the federal sector. 3. Performance duration indicates a long-term need for these critical records management functions. 4. The fixed-price contract type aims to control costs and provide budget certainty. 5. This award falls within the broader category of IT services, a major area of federal spending.

Value Assessment

Rating: good

The contract's value of $188.4 million over its duration appears reasonable given the scope of records management and IT services required by the Department of Veterans Affairs. Benchmarking against similar large-scale IT service contracts for federal agencies suggests that pricing is likely competitive, especially considering the full and open competition. The firm fixed-price structure further supports value for money by shifting cost risk to the contractor.

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. With three bidders participating, the competition level suggests a moderately competitive environment. This level of competition is generally sufficient to drive price discovery and ensure that the government receives a fair market price for the services rendered.

Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which helps to ensure that the awarded price is not excessively high and that public funds are used efficiently.

Public Impact

Veterans will benefit from improved accessibility and management of their health and administrative records. The contract supports the modernization of the VA's information management systems. Services are delivered across the VA's national infrastructure, impacting numerous facilities. The contract likely supports a workforce of IT professionals and records management specialists.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if initial requirements are not clearly defined.
Dependence on contractor performance for critical records management functions.
Risk of data security breaches if robust protocols are not maintained.

Positive Signals

Clear contract type (firm fixed price) helps manage cost overruns.
Long-term duration allows for stable service delivery and relationship building.
Full and open competition suggests a robust market and potential for quality service.

Sector Analysis

The federal IT services market is vast, with agencies increasingly relying on contractors for specialized support. This contract for records management and extraction services falls under the Computer Systems Design Services NAICS code (541512). The VA, as one of the largest federal agencies, represents a significant customer for IT services, and spending in this area is driven by the need to modernize legacy systems and improve data accessibility and security.

Small Business Impact

While this contract was awarded under full and open competition and does not appear to have a specific small business set-aside, the prime contractor, General Dynamics Information Technology, Inc., may engage small businesses for subcontracting opportunities. The extent of small business participation will depend on the prime contractor's subcontracting plan and the availability of qualified small businesses for specific tasks within the contract's scope.

Oversight & Accountability

Oversight for this contract is likely managed by the Department of Veterans Affairs' contracting officers and program managers. The firm fixed-price nature of the contract provides a degree of accountability for the contractor to deliver services within the agreed-upon budget. Transparency is facilitated through contract award databases, and the Inspector General's office may conduct audits or investigations if performance issues or potential fraud arise.

Related Government Programs

Federal Records Management
IT Services Procurement
Digital Transformation Initiatives
Healthcare IT Services

Risk Flags

Long contract duration may not keep pace with technological advancements.
Potential for vendor lock-in if performance issues arise.
Reliance on contractor for critical data management functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $188.4 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. IGF::OT::IGF RECORDS MANAGEMENT CENTER EXTRACTION AND SCANNING SERVICES

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 Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $188.4 million.

What is the period of performance?

Start: 2017-09-15. End: 2024-09-17.

What is the historical spending trend for records management and IT services at the VA?

Analyzing historical spending for records management and IT services at the VA is crucial for understanding budget allocation and identifying trends. While specific data for this exact contract's predecessors isn't provided, the VA consistently invests heavily in IT modernization and data management. In recent fiscal years, federal agencies, including the VA, have seen increasing IT budgets driven by digital transformation mandates and the need to manage vast amounts of data. This $188 million award over seven years suggests a sustained, significant commitment to these functions, aligning with broader government-wide efforts to digitize records and improve system efficiency. Further analysis would require examining prior VA IT budgets and specific contract awards for similar services over the past decade to identify growth patterns or shifts in spending priorities.

How does the number of bidders (3) compare to similar large federal IT service contracts?

A competition with three bidders for a large federal IT services contract like this one ($188.4 million) generally indicates a moderately competitive market. For contracts of this scale and complexity, it's not uncommon to see fewer than a dozen bidders, as only a limited number of large, capable contractors possess the resources, expertise, and security clearances required. In some highly specialized IT niches, competition might be even more limited. Conversely, for more commoditized IT services, one might expect a larger pool of bidders. The fact that three significant players vied for this contract suggests that the market is sufficiently robust to provide the government with options and encourage competitive pricing, while also acknowledging the specialized nature of comprehensive records management and extraction services.

What are the primary risks associated with a long-duration contract (7 years) for IT services?

Long-duration contracts for IT services, such as this 7-year award, present several potential risks. Technology evolves rapidly, and a 7-year contract might lock the government into outdated solutions if not managed carefully with provisions for modernization and adaptation. Contractor performance can degrade over time, or key personnel may leave, impacting service quality. There's also the risk of vendor lock-in, making it difficult and costly to switch providers if dissatisfaction arises. Furthermore, the longer the contract duration, the greater the potential for unforeseen cost increases if the firm fixed-price model doesn't adequately account for inflation or changing market rates for labor and resources. Robust oversight, clear performance metrics, and flexibility clauses are essential to mitigate these risks.

What is the track record of General Dynamics Information Technology, Inc. in performing similar federal contracts?

General Dynamics Information Technology, Inc. (GDIT) has a substantial track record as a major federal contractor, frequently winning and performing large-scale IT services contracts across various agencies, including the Department of Defense and the Department of Veterans Affairs. Their portfolio often includes areas like IT infrastructure management, cloud services, cybersecurity, and data modernization. GDIT has historically managed complex programs requiring significant technical expertise and personnel. While specific performance details for every contract are not publicly available, their consistent presence and success in winning competitive bids for large, critical government IT programs suggest a generally reliable performance history. However, as with any large contractor, specific contract performance can vary, and due diligence on past performance metrics for similar scope contracts is always advisable.

How does the firm fixed-price (FFP) contract type influence cost control and contractor risk?

The Firm Fixed-Price (FFP) contract type is designed to provide the government with cost certainty and shift the majority of performance risk to the contractor. Under an FFP agreement, the contractor agrees to a set price for the defined scope of work, regardless of the actual costs incurred. This incentivizes the contractor to manage their costs efficiently and effectively to maximize profit. For the government, it means the total cost is known upfront, simplifying budgeting and reducing the risk of cost overruns. However, FFP contracts can sometimes lead to less flexibility if the scope needs to change, potentially requiring contract modifications. They are best suited for requirements that are well-defined and unlikely to change significantly during the contract period, as is often the case with established records management services.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 3150 FAIRVIEW PARK DR STE 100, 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: $197,616,481

Exercised Options: $188,406,991

Current Obligation: $188,406,991

Actual Outlays: $70,167,159

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $2,814,200

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA11816D1016

IDV Type: IDC

Timeline