State Dept. Awards $1.5B Logistics Contract to General Dynamics, Ending in 2029
Contract Overview
Contract Amount: $1,506,866,336 ($1.5B)
Contractor: General Dynamics Information Technology, Inc.
Awarding Agency: Department of State
Start Date: 2019-06-19
End Date: 2029-08-07
Contract Duration: 3,702 days
Daily Burn Rate: $407.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Other
Official Description: GLOBAL SECURITY ENGINEERING&SUPPLY CHAIN SERVICES.
Place of Performance
Location: SPRINGFIELD, FAIRFAX County, VIRGINIA, 22150
State: Virginia Government Spending
Plain-Language Summary
Department of State obligated $1.51 billion to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: GLOBAL SECURITY ENGINEERING&SUPPLY CHAIN SERVICES. Key points: 1. Significant contract value of $1.5 billion over 10 years. 2. General Dynamics Information Technology, Inc. is the sole awardee. 3. Potential risks associated with long-term, sole-source contracts. 4. Services fall under logistics and supply chain consulting.
Value Assessment
Rating: fair
The contract's cost-plus incentive fee structure allows for flexibility but requires careful monitoring to ensure cost-effectiveness. Benchmarking against similar large-scale logistics contracts is difficult without detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the definitive contract award type and long duration may limit future competitive opportunities.
Taxpayer Impact: Taxpayer funds are committed to a long-term service contract, necessitating robust oversight to ensure value for money and prevent cost overruns.
Public Impact
Ensures continuity of essential global security and supply chain operations for the Department of State. Supports critical infrastructure and logistical needs in potentially volatile regions. Potential for job creation within General Dynamics and its subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (10 years) increases risk of price escalation and vendor lock-in.
- Cost-plus incentive fee can lead to higher costs if not managed tightly.
- Lack of small business participation noted.
Positive Signals
- Awarded through full and open competition, indicating initial market engagement.
- Contract supports critical national security and diplomatic functions.
- Definitive contract provides a stable framework for service delivery.
Sector Analysis
This contract falls within the professional services sector, specifically logistics and supply chain consulting. Spending benchmarks for such extensive, long-term government contracts are highly variable, depending on scope and duration.
Small Business Impact
The data indicates that small business participation was not a factor in this award (sb: false). This suggests a missed opportunity to leverage small business capabilities and promote economic diversity within this significant contract.
Oversight & Accountability
The long-term nature of this definitive contract necessitates strong oversight from the Department of State to ensure performance standards are met and costs remain controlled. Regular performance reviews and audits will be crucial for accountability.
Related Government Programs
- Process, Physical Distribution, and Logistics Consulting Services
- Department of State Contracting
- Department of State Programs
Risk Flags
- Long-term commitment (10 years) may lead to price inflexibility.
- Cost-plus contracts can incentivize higher spending if not rigorously managed.
- Sole awardee limits competitive pressure throughout the contract life.
- Lack of small business participation noted.
Tags
process-physical-distribution-and-logist, department-of-state, va, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of State awarded $1.51 billion to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. GLOBAL SECURITY ENGINEERING&SUPPLY CHAIN 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 State (Department of State).
What is the total obligated amount?
The obligated amount is $1.51 billion.
What is the period of performance?
Start: 2019-06-19. End: 2029-08-07.
What specific performance metrics are in place to ensure the 'incentive fee' component drives efficiency and cost savings for the taxpayer?
The contract's cost-plus incentive fee (CPIF) structure is designed to reward the contractor for meeting or exceeding performance targets while controlling costs. Specific metrics would typically include delivery timelines, quality of service, operational efficiency, and adherence to budget. The Department of State's oversight team would monitor these KPIs, and the incentive fee would be adjusted based on performance against pre-defined benchmarks, ensuring alignment between contractor profit and government savings.
Given the 10-year duration, what mechanisms exist to re-evaluate the contract's necessity and pricing to prevent potential overpayment or outdated service models?
Long-term contracts often include clauses for periodic reviews, typically annually or at specific milestones, to assess performance, market changes, and continued necessity. The Department of State should have provisions for contract modifications or termination for convenience if the services become obsolete or significantly overpriced compared to evolving market conditions. Regular market research and competitive analysis throughout the contract lifecycle are essential to ensure ongoing value and prevent vendor lock-in.
How does this contract contribute to the Department of State's overall mission effectiveness and operational resilience in global security and supply chain management?
This contract is crucial for maintaining the operational readiness and effectiveness of the Department of State's global security and supply chain functions. It ensures the reliable provision of essential logistics and consulting services, which are vital for supporting diplomatic missions, personnel safety, and the secure movement of critical assets worldwide. The long-term nature of the award suggests a strategic commitment to bolstering these capabilities, enhancing the department's ability to operate effectively in complex and often challenging international environments.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Process, Physical Distribution, and Logistics Consulting Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: SAQMMA17R0168
Offers Received: 3
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: General Dynamics Corp
Address: 3211 JERMANTOWN RD, FAIRFAX, VA, 22030
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $2,447,737,875
Exercised Options: $2,447,737,875
Current Obligation: $1,506,866,336
Subaward Activity
Number of Subawards: 3032
Total Subaward Amount: $2,247,245,296
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2019-06-19
Current End Date: 2029-08-07
Potential End Date: 2029-08-07 00:00:00
Last Modified: 2026-03-26
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