DoD's $124.5M IT contract for logistics systems management awarded to CGI Federal Inc. shows long duration and cost-plus structure

Contract Overview

Contract Amount: $124,492,064 ($124.5M)

Contractor: CGI Federal Inc.

Awarding Agency: Department of Defense

Start Date: 2009-10-26

End Date: 2020-08-20

Contract Duration: 3,951 days

Daily Burn Rate: $31.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: THIS CONTRACT SUPPORTS A REQUIREMENT FOR INTEGRATED MATERIAL MANAGEMENT OPERATIONS SERVICES TO SUPPORT THE AWRDS, WMMS, WMMS-DOL SYSTEMS AND RFID MAINTENANCE SUPPORT.

Plain-Language Summary

Department of Defense obligated $124.5 million to CGI FEDERAL INC. for work described as: THIS CONTRACT SUPPORTS A REQUIREMENT FOR INTEGRATED MATERIAL MANAGEMENT OPERATIONS SERVICES TO SUPPORT THE AWRDS, WMMS, WMMS-DOL SYSTEMS AND RFID MAINTENANCE SUPPORT. Key points: 1. Contract duration of nearly 11 years suggests a long-term need for these IT services. 2. The Cost Plus Fixed Fee (CPFF) pricing structure may incentivize cost overruns. 3. Awarded via full and open competition, indicating a potentially competitive bidding process. 4. The contract supports critical logistics and material management systems for the Army. 5. Focus on IT infrastructure and system maintenance aligns with common defense spending patterns. 6. The absence of small business set-asides warrants further investigation into subcontracting opportunities.

Value Assessment

Rating: fair

The contract's total value of $124.5 million over nearly 11 years averages approximately $11.3 million annually. Benchmarking this against similar IT services contracts for logistics systems management is challenging without more specific service details. However, the CPFF structure, while common for complex IT projects, carries inherent risks of cost escalation compared to fixed-price contracts. The long duration suggests a stable, albeit potentially expensive, relationship.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The fact that it was competed indicates a deliberate effort to solicit proposals from the market. However, the number of bidders is not specified, which limits the assessment of the intensity of the competition. A robust competition typically leads to better pricing and terms for the government.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best value through market forces. However, the long-term nature and CPFF structure of this contract could still lead to significant expenditures over its lifespan.

Public Impact

The Department of the Army benefits from the continued operation and maintenance of its critical Integrated Material Management Operations Services, AWRDS, WMMS, and WMMS-DOL systems. Personnel involved in logistics, supply chain management, and inventory control within the Army will utilize the supported systems. The contract ensures the continued functionality of RFID maintenance support, crucial for tracking and managing assets. The primary beneficiaries are the military personnel and civilian employees relying on efficient material management for operational readiness. Geographic impact is likely widespread across Army installations that utilize these logistics systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Fixed Fee (CPFF) contract type can lead to higher costs if not managed diligently, as contractor incentives may lean towards spending to cover fixed fees.
The extended contract duration of nearly 11 years raises questions about potential vendor lock-in and the agility of the IT infrastructure.
Lack of specific details on performance metrics makes it difficult to assess the true value and effectiveness of the services provided.
The absence of explicit small business participation goals or set-asides may limit opportunities for smaller innovative firms in this large contract.

Positive Signals

Awarded through full and open competition, suggesting a potentially robust market evaluation and competitive pricing.
The contract supports essential logistics and material management systems, indicating a critical need and stable requirement.
The long duration implies a successful, ongoing relationship and consistent service delivery by CGI Federal Inc.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on Computer Facilities Management Services. The market for IT services supporting defense logistics is substantial, driven by the need for efficient supply chain management and operational readiness. Comparable spending benchmarks would typically involve other large-scale IT system maintenance and support contracts within federal agencies, particularly within the Department of Defense, which consistently represents a significant portion of government IT expenditures.

Small Business Impact

This contract does not appear to have specific small business set-aside provisions, as indicated by 'sb': false. While CGI Federal Inc. is a large business, the absence of explicit subcontracting plans or goals within the provided data makes it difficult to assess the impact on the small business ecosystem. Large federal contracts often include subcontracting requirements to ensure small businesses participate, but this information is not detailed here. Further review of the contract's subcontracting clauses would be necessary.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures would be defined by the contract's terms, including performance standards, reporting requirements, and payment schedules. Transparency is generally facilitated through contract award databases like FPDS, where basic information is publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Department of Defense Logistics IT Support
Army Enterprise Resource Planning (ERP) Systems
Defense Supply Chain Management Systems
IT Infrastructure Modernization Programs
RFID Asset Tracking Systems

Risk Flags

Cost Plus Fixed Fee (CPFF) pricing structure may lead to cost overruns.
Long contract duration (nearly 11 years) could indicate potential vendor lock-in or lack of agility.
Lack of specific performance metrics in summary data hinders value assessment.
Absence of explicit small business participation goals requires further investigation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $124.5 million to CGI FEDERAL INC.. THIS CONTRACT SUPPORTS A REQUIREMENT FOR INTEGRATED MATERIAL MANAGEMENT OPERATIONS SERVICES TO SUPPORT THE AWRDS, WMMS, WMMS-DOL SYSTEMS AND RFID MAINTENANCE SUPPORT.

Who is the contractor on this award?

The obligated recipient is CGI FEDERAL INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $124.5 million.

What is the period of performance?

Start: 2009-10-26. End: 2020-08-20.

What is the historical spending trend for Integrated Material Management Operations Services and related systems within the Department of the Army?

Analyzing historical spending requires accessing detailed contract data over multiple fiscal years. Based on this single award of $124.5 million spanning from 2009 to 2020, the average annual spend was approximately $11.3 million. To understand the trend, one would need to examine prior contracts for similar services, identify any increases or decreases in funding, and correlate these with system upgrades, changes in operational requirements, or broader DoD IT spending initiatives. Without access to a comprehensive contract history, it's difficult to establish a definitive trend, but the long duration suggests a consistent, significant investment in these logistics IT capabilities.

How does the Cost Plus Fixed Fee (CPFF) structure of this contract compare to industry best practices for IT services, and what are the associated risks?

The CPFF structure is often used for research and development or complex IT projects where the scope is not fully defined at the outset, allowing for flexibility. However, it places the cost risk on the government, as the contractor is reimbursed for all allowable costs plus a fixed fee representing profit. Industry best practices often favor fixed-price contracts (like FFP or FP-EPA) when requirements are well-defined, as they provide greater cost certainty and incentivize contractor efficiency. The primary risk with CPFF is the potential for cost overruns, as the contractor has less incentive to control expenses once the fixed fee is established. Effective oversight, detailed cost tracking, and robust negotiation are crucial to mitigate these risks.

What specific performance metrics were included in the contract, and how was CGI Federal Inc.'s performance evaluated?

The provided data does not include specific performance metrics or evaluation details for this contract. Typically, contracts of this nature would include a Performance Work Statement (PWS) outlining deliverables and service level agreements (SLAs), such as system uptime, response times for issue resolution, and data accuracy. Contractor performance would then be assessed against these metrics, often through Contractor Performance Assessment Reporting System (CPARS) or similar mechanisms. Without access to the full contract documentation or CPARS reports, it is impossible to definitively state how CGI Federal Inc.'s performance was evaluated or if it met expectations.

What is CGI Federal Inc.'s track record with similar large-scale IT support contracts within the Department of Defense or other federal agencies?

CGI Federal Inc. is a significant government contractor with a substantial portfolio of IT services contracts across various federal agencies, including the Department of Defense. They have a history of managing large, complex IT infrastructure and application support programs. To assess their track record specifically for logistics IT systems, one would need to review their past performance on similar contracts, looking at factors like contract awards, past performance ratings (e.g., CPARS), any contract disputes or terminations, and their demonstrated capabilities in areas like system integration, maintenance, and modernization. Their continued success in winning large contracts suggests a generally positive track record, but specific performance on comparable logistics systems would require deeper investigation.

Were there any significant contract modifications or change orders issued during the contract's lifespan, and what was their impact on cost and schedule?

The provided summary data does not detail contract modifications or change orders. Large, long-duration contracts like this often undergo modifications to adjust scope, pricing, or timelines due to evolving requirements or unforeseen circumstances. Analyzing these modifications would involve reviewing contract amendment records. Significant changes could impact the total contract value, extend the period of performance, or alter the services delivered. Understanding the nature and frequency of modifications is crucial for a complete picture of the contract's evolution and its ultimate cost to the government.

Industry Classification

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

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W52P1J09R0080

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: CGI Inc (UEI: 248513116)

Address: 12601 FAIR LAKES CIR, FAIRFAX, VA, 22033

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

Financial Breakdown

Contract Ceiling: $124,492,064

Exercised Options: $124,492,064

Current Obligation: $124,492,064

Contract Characteristics

Consolidated Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline