DoD's $18.5M contract for engineering services awarded to General Dynamics IT shows fair value, but limited competition

Contract Overview

Contract Amount: $18,548,915 ($18.5M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2009-09-23

End Date: 2014-08-02

Contract Duration: 1,774 days

Daily Burn Rate: $10.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ENGINEERING SERVICES FOR MACHINERY CONTROL, INFORMATION, AND AUTOMATION SYSTEMS

Place of Performance

Location: PHILADELPHIA, PHILADELPHIA County, PENNSYLVANIA, 19112

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $18.5 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: ENGINEERING SERVICES FOR MACHINERY CONTROL, INFORMATION, AND AUTOMATION SYSTEMS Key points: 1. Contract awarded for engineering services related to machinery control, information, and automation systems. 2. General Dynamics Information Technology, Inc. secured the contract. 3. The contract was awarded under full and open competition. 4. The contract duration was 1774 days, spanning from September 2009 to August 2014. 5. The contract type was Cost Plus Fixed Fee (CPFF). 6. The contract was a delivery order, indicating it was part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 7. The contract was not set aside for small businesses.

Value Assessment

Rating: fair

The contract's value of approximately $18.5 million over nearly five years for specialized engineering services appears reasonable given the scope. However, without specific performance metrics or detailed cost breakdowns, a definitive value-for-money assessment is challenging. Benchmarking against similar complex engineering support contracts for defense systems would provide a clearer picture of whether the pricing was competitive. The CPFF structure can sometimes lead to cost overruns if not managed tightly, but it also allows for flexibility in complex projects.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. However, the data indicates only one award was made (no: 1), which could imply that while the competition was open, the number of qualified bidders or the specific nature of the requirement may have limited the active participants. This level of competition is generally positive for price discovery, but the single award warrants further investigation into the bidding landscape.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing inherent in full and open competition. However, the fact that only one award was made suggests that the government may not have received the full benefit of a highly competitive market, potentially leading to less aggressive pricing than if multiple strong bids were received.

Public Impact

The Department of the Navy benefits from specialized engineering services for critical machinery control, information, and automation systems. These services likely support the operational readiness and modernization of naval assets. The contract supports the defense industrial base, particularly in advanced engineering and IT solutions. The contract's duration suggests a sustained need for these specialized technical skills within the Navy's operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can incentivize contractor to increase costs to increase fee if not properly managed.
Limited information on specific performance metrics makes it difficult to fully assess value for money.
The single award under 'full and open competition' raises questions about the breadth of actual market participation.

Positive Signals

Awarded under 'full and open competition', indicating an opportunity for broad market participation.
The contract addresses critical engineering needs for defense systems.
Long contract duration suggests a stable and predictable need for these services.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), a critical component of the defense industrial base. This sector provides specialized technical expertise for the design, development, and integration of complex systems. Spending in this area is often driven by defense modernization efforts, R&D, and sustainment of existing platforms. Comparable spending benchmarks would typically involve analyzing other large-scale engineering support contracts awarded by the Department of Defense or other federal agencies for similar complex systems.

Small Business Impact

The data indicates this contract was not set aside for small businesses (sb: false). There is no explicit information regarding subcontracting plans or performance. Without specific subcontracting goals or reporting, it is difficult to assess the impact on the small business ecosystem. Typically, large prime contracts like this offer opportunities for small businesses to participate as subcontractors, but this would depend on the prime contractor's strategy and the specific requirements of the work.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy contracting officers and program managers. As a Cost Plus Fixed Fee contract, rigorous financial oversight and auditing would be expected to ensure costs are reasonable and the fixed fee is earned. Transparency is generally facilitated through contract award databases like FPDS, but detailed performance and cost data are often proprietary. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Engineering Services
Machinery Control Systems
Information Technology Support
Naval Systems Engineering
Automation Systems Development

Risk Flags

Potential for cost overruns due to CPFF structure
Limited insight into competitive landscape despite 'full and open' designation
Lack of detailed performance metrics for value assessment

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.5 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. ENGINEERING SERVICES FOR MACHINERY CONTROL, INFORMATION, AND AUTOMATION SYSTEMS

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 Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $18.5 million.

What is the period of performance?

Start: 2009-09-23. End: 2014-08-02.

What was the specific nature of the 'engineering services for machinery control, information, and automation systems' provided under this contract?

The contract focused on providing specialized engineering expertise for the design, development, integration, and sustainment of complex machinery control, information, and automation systems within the Department of the Navy. This likely encompassed a range of activities such as system architecture design, software development, hardware integration, testing, validation, and lifecycle support for various naval platforms or shore-based facilities. The 'machinery control' aspect suggests involvement with the operational systems of ships or other naval equipment, while 'information and automation systems' points towards the integration of IT and automated processes to enhance efficiency, safety, and performance.

How does the $18.5 million contract value compare to similar engineering services contracts awarded by the Department of Defense?

The $18.5 million value for nearly five years of specialized engineering services is a significant but not extraordinary amount for a Department of Defense contract of this nature. Benchmarking requires comparing it to contracts with similar scope, duration, and technical complexity. For instance, contracts for developing or sustaining complex weapon systems, IT infrastructure, or specialized naval engineering support often range from tens to hundreds of millions of dollars. While $18.5M is substantial, it falls within a common tier for specific, long-term engineering support tasks. A more precise comparison would involve analyzing contracts with identical NAICS codes (541330) and similar service descriptions awarded within the same timeframe to ensure relevant cost comparisons.

What are the potential risks associated with a Cost Plus Fixed Fee (CPFF) contract for these types of engineering services?

The primary risk with a CPFF contract is the potential for cost overruns. While the contractor's fee is fixed, their total reimbursement is based on allowable costs incurred. If costs escalate beyond initial projections due to unforeseen technical challenges, scope creep, or inefficient management, the government bears the financial burden. This structure can sometimes disincentivize cost control by the contractor, as higher costs directly lead to higher reimbursements, although the fixed fee itself doesn't increase. Effective oversight, detailed cost tracking, and robust negotiation are crucial to mitigate these risks and ensure fair pricing.

Given the 'full and open competition' award, why was there only one award made?

The 'full and open competition' designation means the solicitation was publicly advertised, allowing any responsible source to submit an offer. However, the fact that only one award was made (no: 1) suggests several possibilities. The requirement might have been highly specialized, attracting only one bidder with the unique qualifications or capabilities needed. Alternatively, the solicitation might have been structured in a way that, despite being open, favored a specific approach or technology, leading to a single best-value offer. It could also indicate that while multiple bids were received, only one met all the mandatory requirements or presented the most advantageous proposal according to the evaluation criteria.

What is the track record of General Dynamics Information Technology, Inc. in performing similar large-scale engineering and IT contracts for the federal government?

General Dynamics Information Technology, Inc. (GDIT), a subsidiary of General Dynamics, has a long and extensive track record of performing large-scale IT and engineering services contracts for various U.S. federal agencies, including the Department of Defense. They are a major federal contractor known for providing a wide range of services, from IT infrastructure management and cybersecurity to complex systems engineering and support for defense programs. Their history includes numerous prime contract awards across different branches of the military and civilian agencies. While specific performance details for every contract are not publicly available, GDIT's sustained presence and significant contract awards indicate a generally established capability and experience in handling complex government requirements.

What does the contract's duration of 1774 days (approx. 4.8 years) imply about the nature of the services and the agency's needs?

A contract duration of nearly five years for specialized engineering services strongly implies a long-term, sustained need for these capabilities within the Department of the Navy. It suggests that the services are not for a short-term project but rather for ongoing support, sustainment, modernization, or development of critical systems. This extended period allows for deeper integration of the contractor's expertise into the agency's operations, potentially leading to greater efficiency and institutional knowledge. It also indicates a level of stability and predictability in the agency's requirements for machinery control, information, and automation systems, likely tied to the lifecycle of the platforms or systems being supported.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0002409R3260

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

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: $18,590,941

Exercised Options: $18,590,941

Current Obligation: $18,548,915

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4012

IDV Type: IDC

Timeline